HomeAnalyticsWeekly Highlights: 22-28.09.2014

Weekly Highlights: 22-28.09.2014

The third gas war between Russia and Ukraine is in full swing. Donetsk International Airport – “Brest Fortress” of Ukraine. National Bank and the government managed to to keep the hryvnia exchange rate via administrative measures. Extraordinary elections to the Verkhovna Rada are on the home stretch.

War in Ukraine

●      Militants do not obey declared by the Minsk memorandum ceasefire. Earlier this week, the intensity of the shelling and attacks on the positions of the Ukrainian army slowed, then rose sharply. Terrorists are continuously storming Donetsk airport, checkpoints under Debalcevo, Granite, Mariupol, Staromihaylovkoy, Shastya, Avdiyivka.
●      As a result of the shelling of residential areas of Donetsk, Avdiyivka, Mariupol, Makiyivka, Schastya and other towns several dozen civilians were killed and injured.
●      On the territory of the breakaway “republics” DNR and LNR, armed fights for spheres of influence constantly emerge between militant groups. Populationis is offered handouts in the form of remnants of “humanitarian aid” from Russia and products seized from local businessmen.
●      Security Service and Interior Ministry massively detain sabotage and terrorist groups both along the confrontation line, and in the central part of Ukraine.
●      Intensive construction of fortifications in the framework of “The Wall” on the border with Russia is continuing. First part of it is planned to be ready before September 30. Ukrainian army, local authorities and volunteers are building fortifications on the directions of the possible strikes of the Russian army and the terrorists of the LNR and DNR.
●      International experts have reported about militants mining territory in the area of MH-17 aircraft fall. Malaysia demands from the UN a dispatch of a peacekeeping force to ensure the investigation and investigators access to the scene of the accident.
●      Prisoner exchange continued with the DNR militants. Total in a week about a thousand Ukrainian military were set free.

Politics

●      President Poroshenko issued a decree enacting the decision of the National Security Council from August 24, which provides for transfer of the switch to operate in conditions of “special” (military) mode, and revision of non-aligned status. Parts of the document remain a state secret.
●      The official website of the President published a program of reforms in Ukraine “Strategy 2020”, which he presented at the first post-election press conference, where he said that he wanted to go down in history as a reformist president and is committed to creating an enabling environment for reform and accession to the EU. Among the planned 60 major reforms he believes the judicial reform is the key. Law on the special status of the Donbass territories does not imply the federalization of the country. Ukraine could stop the Russian threat with weapons of its own production. It only needs systems of communications and intelligence from the world community.
●      The Wall Street Journal and Reuters reported the facts of pressure on the leadership of the European Commission and the President Poroshenko from Putin and Minister of Economy of the Russian Federation Ulyukaeva with the purpose of reviewing the Association Agreement between the EU and Ukraine. However, neither Ukraine nor the EU is not going to abandon the ratified document.
●      CEC continued to register candidates for the special election of the Verkhovna Rada. 29 party lists have been registered. There are about 5,000 candidates running for 438 seats in the parliament.
●      According to one of the sponsors of the law “On the cleansing of power,” it would not apply to the president, MPs, prosecutors and police.

Economy

●      At the natural gas talks in Berlin between the EU, Russia and Ukraine, Ukrainian side did not agree to the terms of resuming gas supplies previously agreed without its participation by Commissioner Oettinger and Energy Minister Novak. Prime Minister Yatsenyuk stressed that Ukraine will not withdraw lawsuit against Gazprom from the Stockholm arbitration.
●      After the visit by Gazprom’s management, Hungary has cut off natural gas supplies to Ukraine. Energy Minister Novak threatened that Russia will stop gas supplies to Europe in the case of re-export it to Ukraine. However, Norway’s Energy Minister promised that the EU can expect an increase in gas imports in the event of disruption of supplies by Gazprom.
●      Enterprises debt to Naftogaz has reached 40 billion UAN. Hole in the natural gas balance may result in interruptions in heating homes in the autumn-winter period. That is why the government wants to make the biggest consumers save natural gas and can allow them to independently enter into contracts for the supply.
●      The intervention of the president, prime minister and head of the NBU, which held a meeting with the leadership of the 50 largest banks, as well as administrative measures on the currency market have reduced the rates on the interbank market and increased the official hryvnia exchange rate by 10%. As a result, by the end of the week rates have been established at the level of 12.90 UAH / $ 16.40 UAH / € and 3,37 UAH / 10 RUB.
●      Prime Minister Yatsenyuk said that Ukraine is not threatened with a default, and it can meet its financial obligations, including guarantees to Russia. At the same time agreed with the IMF lending program may be revised.
●      Ukraine on the results of 8 months has reduced steel production by more than a third, and dropped out of the top ten world producers.
●      To reduce dependence on Russian nuclear fuel, following the supply contract with the company Westinghouse, a contract is getting prepared with the French company Areva for the disposal of spent fuel assemblies.
●      A meeting between Prime Minister Yatsenuk and USA Secretary of Trade Pritzker was devoted to attracting American investments, reforms in Ukraine and the protection of intellectual property.

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