HomeAnalyticsDaily Highlights: 26/09/2014

Daily Highlights: 26/09/2014

The EU, Russia and Ukraine are trying to find acceptable solution for the natural gas problem via negotiations. Central Elections Committee determined all parties admitted to participate in the early parliamentary elections. Russia is attempting to put pressure on Ukraine on all diplomatic and economic fronts.

Ukraine

●      Prime Minister Yatsenyuk considers withdrawal of Russian troops and re-establishment of control over the  state border as a key conditions for starting peace negotiations with Russia on Donbass with participation of the US.
●      Central Elections Committee closed the registration and conducted a draw for ordering 29 parties on the ballot.
●      As reported by the State Statistic Agency, real salaries in Ukraine in August declined by 7.1% vs. July and by 12.7% vs August of the last year.
●      Cabinet of Ministers approved a list of 1,200 legal entities and physical persons connected with Russian aggression in Ukraine, who are subject to further sanctions, as well as transferred it for approval to the NSDC.
●      NSC «Energoatom» is in process of negotiations with French Areva on nuclear fuel recycling, including fuel supplied from recently contracted Westinghouse,.
●      National Bank slightly strengthened hryvnya vs major currencies: 12.90 UAH/USD (+5 cop), 16.40 UAH/EUR (+21 cop), 3.37 UAH/10 RUB. Interbank exchange rates have stabilized.
●      Press office of the Ministry of Health informed that global registry of all wounded in the course of the Antiterrorist Operation will be created in Ukraine in order to provide rehabilitation and further assistance.

Kyiv

●      Mayor Klichko informed that in order to achieve natural gas savings the heating season in the capital, as per governmental initiative, could be delayed if the weather stays warm enough.

War in Ukraine

●      During the day, the hot spots were in Donetsk International Airport, which was  fiercely attacked by terrorists, in towns in Donetsk and Luhans’k regions, as well as Donetsk city, that have been shelled by militants with artillery and mortars. Several civilians have been killed as a result. NSDC and independent experts report deterioration of the operating environment in the combat area.
●      DPR militants refused to exchange prisoners of war, accusing Ukrainian part in violation of the exchange conditions. However, they consider the renewal of the exchange possible.
●      Press office of Ukrainian Government reported that first stage of «the Wall» project, aimed to establish fortifications along the Russian border and with planned investments of 100 mlm UAH, will be finished by the 30th of September.
●     Negotiations of Ukrainian and OSCE representatives with Russian troops are being conducted in Soledar (in Donetsk region), to define the borders of the buffer zone and withdrawal of heavy arms.

International

●      White House press secretary mentioned during a regular briefing, that despite disagreements on Ukrainian issues, US and Russia could collaborate in other areas, including war on terrorism and space exploration.
●      During a press conference in New York, Russian Foreign Minister Lavrov stressed that Ukraine renunciation of non-alliance status will be a mistake, which will challenge security in Europe, and that activation of the free trade agreement with the EU will force Russia to cancel zero custom tariffs for Ukrainian exports.
●      European Commission Press Secretary informed that President Barroso received a letter from President Putin, which insists on revising Ukrainian association agreement with the EU. However, the agreement could be only changed by request from one side and an agreement from the other. Accordingly, the text won’t change.
●      Russian Finance Ministry declared that Ukraine is not willing to pay back its loan of 3 bln. USD, taken by the government of Yanukovych. As per experts opinion, payment of the debt could be conditional to return of Crimea and compensation of all losses from Russian aggression and annexation.
●      European Energy Commissar informed about the EU readiness to finance partial loading of Ukrainian underground natural gas storage facilities as a response to Russian threats, demanding the prepayment of 2 bln. USD in order to start supplies from the 1st of October. During the gas negotiations, Russia declined Ukrainian debt payment scheme suggested by the Euro Commission. Ukrainian Energy Minister Prodan claimed that without an agreement on the current price, the question of the amount and the debt repayment scheme couldn’t be resolved. Prime Minister Yatsenyuk said that Ukraine will not withdraw its legal case against Gazprom from the Stockholm Arbitrage.

Trends

●      The Law on Lustration will enable to start reforming the process of state governance. However, categories of people from elected authorities, some of whom are directly linked with repressions of Maidan and with support of separatists and terrorists, have been protected from the lustration process. Also, the mechanism of the lustration execution hasn’t been defined.

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