HomeAnalyticsWeekly Highlights: 24 - 30/11/2014

Weekly Highlights: 24 – 30/11/2014

The Ukrainian Parliament has started its work; the Speaker and the Prime Minister have been elected. NATO does not object to the Ukraine’s accession to the Alliance. The USA and the EU are interested in the reforms in Ukraine. World oil prices dropped to a five-year low. Fierce battles for the Donetsk airport are continuing.

The start of work of the new Ukrainian Parliament

The Cabinet of Ministers, headed by the Prime Minister Yatsenyuk, resigned before the opening of the first session of the new Parliament.
President Poroshenko, in his speech to the Parliament, proposed to allow foreigners to hold positions of ministers and their first deputies in the Cabinet of Ministers.  The rejection of non-aligned status and immediate radical reform of the judicial system have been declared. Groisman, from the “Petro Poroshenko’s Blok”, was elected as the Speaker of Parliament, and Yatseniuk was appointed as the Prime Minister at the first session of the newly elected Ukrainian Parliament. Lutsenko, deputy from the “Petro Poroshenko’s Blok” and former minister of internal affairs, was elected as the Coordinator of the parliamentary coalition.
The plans of the parliamentary coalition for the first session include the adoption of the military doctrine, the increase in defence spending, the rejection of non-aligned status, the rejection of the election by the majority system, tax cuts and creation of anti-corruption special services.

Integration into the EU and NATO

 European parliaments have been consistently ratifying the Association Agreements with Ukraine. Ministry of Foreign Affairs expects to complete the ratification process by the end of this year.
The law on choosing a course to join NATO was registered in the Ukrainian Parliament. The government is gradually implementing the Association Agreement and moves towards the abolishment of the EU visa requirements by the end of spring 2015.
Mr Stoltenberg, the NATO Secretary General, confirmed that the Alliance is open to the new members, if they meet the criteria, and called Russia’s requirement to guarantee non-entrance of Ukraine into NATO to be the attempt against its sovereignty. At the same time, the German Foreign Minister Steinmeier said that he could not see any way of the Ukraine’s accession to the EU and NATO in the foreseeable future.

Anniversary of the beginning of Euromaidan

The monument to the Belarusian citizen Zhiznevsky, who was killed at Maidan, was opened in Kiev on Grushevskogo Street. On anniversary of beating up students by “Berkut” at Maidan, activists held a “Night of Remembrance” which culminated in a prayer service at St. Michael’s Cathedral.

State of the economy

Europe and the United States put pressure on the Ukrainian authorities to launch reforms as soon as possible.
President Poroshenko proposed to introduce foreigners in the government, by providing them with citizenship.
National Bank gradually reduced the official rate of hryvnia against major currencies. Trading volumes remain really low; experts severely criticise the monetary policy of the NBU, which has provided more than 1.4 billion USD to refinance eight major banks to maintain liquidity. Analysts predict unstable behaviour of market in the conditions of unclear exchange rate policy of the National Bank and the lack of positive signals from the IMF. Cash market remains in the shadows.
NBU sold 14 tons of gold, thereby increasing the share of dollar in the gold and forex reserves.
The European Bank for Reconstruction and Development will help Ukraine to reform the Deposit Guarantee Fund.
Prime Minister Yatsenyuk said that despite the release of more than 100 billion hryvnias to Naftogaz and the increased tariffs for businesses and the public, it was not possible to pay out company’s deficit due to the devaluation of hryvnia.
From the beginning of the year, Ukraine has received $8.6 billion and holds a budget deficit at 4% mark.  Exports of production to the EU have increased by 12%.
The IMF mission will continue to work in Ukraine after the formation of the Cabinet of Ministers.
The oil fell record low in the international markets, after the OPEC countries decided not to reduce its production.
WTO adopted the agreement on trade facilitation that can increase world trade by $ 1 trillion a year.

Beginning of a new “cold war” between the West and Russia

Mr Jagland, Secretary General of the Council of Europe, allows for the possibility of a new Cold War between the West and Russia. To avoid it, it is necessary to resolve the conflict between Russia and Ukraine.
The US Deputy Defence Secretary Mr Work believes that the greatest challenges to the global security in the upcoming years will come from Russia and China, which have nuclear weapons and are permanent members of the UN Security Council. NATO Secretary General Stoltenberg said that NATO countries do not want a new round of the Cold War, but Russia does not give any chance for successful resolution of the Ukrainian crisis.

The visit of the Lithuanian president Grybauskaitė

The Lithuanian President Grybauskaitė said that the priority issue for Ukraine is the eradication of corruption. She believes that the EU is obliged to provide Ukraine with all possible assistance, including military. Lithuania is ready to supply weapons and train soldiers.

Investigation of the flight MH-17 accident

The train with the collected debris and the remains of the passenger from MH-17 flight, shot down by the pro-Russian rebels under Torez in July, arrived in Kharkov, accompanied by the Dutch experts and police, the OSCE observers and rebels from DNR. Collected evidence was transported to the Netherlands, prosecutors of which announced that all the important for the investigation wreckage had been collected.
The German citizen filed a complaint to the European Court of Human Rights against Ukraine that failed to ensure the safety of flights over its territory.

The problem of the population of the occupied territories and internally displaced persons

According to the UN data, the number of refugees and displaced persons from the war zone in Donbass reached 1 million. The death toll in Donbass since the beginning of conflict is 4356 people, more than 10 thousand was injured.
The DNR “authorities” announced the creation of the “Pension Fund” and payments to pensioners in the amount of 900-1000 hryvnias. The photos of counterfeit notes, which the rebels use to pay the pensions, appeared in the Internet. In some cities, the terrorists pay salary by rations; Donetsk teachers do not get paid at all.
Authorities of the terrorist-controlled Donetsk “republic” mobilize the remaining in the city students to the construction brigades to rebuild infrastructure.
President Poroshenko once again stated that the government would pay pensions and social benefits only in the territories controlled by the Ukrainian authorities. The National Bank asked commercial banks to comply with the decision as of 6 August 2014, to terminate the service of all accounts, including card accounts, in the territory controlled by rebels in Donbas. The Ukrainian Post is shutting down its offices in these areas. The Ukrainian Railway is closing the movement of trains in the war zone and in the occupied territory of Donbass.
On 9 December, in Geneva, the UNICEF, together with other UN agencies, will present a strategic plan to respond to the crisis in Ukraine for 2014-2017.

Increase in the Russia’s military presence in Donbass

Mr Byer, the head of the US Mission to the OSCE presented to the Permanent Council of Organizations in Vienna the evidence of the systematic violations by Russia of the Minsk agreements and said that the US is ready to expand sanctions against Russia.
International observers record the movement of multiple military convoys on the territories controlled by terrorists; several times the OSCE mission vehicles were under fire from rebels. Columns of military vehicles, artillery, personnel are coming through the checkpoints on the border of Ukraine on the daily basis. Russian troops are put forward on the main directions of the planned attacks on Volnovakha, Debaltsevo, Donetsk airport, Artemivs’k, Popasnaya, Happiness, and village Lugansk.
Russia continues to supply the rebels with ammunition using the “convoys” that regularly and uncontrollably invade the territory of Ukraine.

Military actions in Donbass

The brutal battles for the Donetsk airport have been happening throughout the week, during which the Ukrainian army suffered substantial losses. The positions of the Ukrainian army are under attack all along the line of contact. The shelling of fortifications from the territory of Russia has resumed.
The rebels have been purposefully shelling villages controlled by the Ukrainian army. There are victims among the civilian population, destroyed infrastructure, in particular, Luhansk state district power plant, as a result of shelling of Popasnaya, village Lugansk, Happiness, Avdeevka, Debaltsevo, and Donetsk.
Officers of law enforcement agencies and the military forces detain subversive groups trained in camps organized by the FSB and the Russian GRU throughout Ukraine.
Russian troops conduct a sweep of the city gangs “Don Cossacks”, establishing its control over the settlements. Local militants were ordered to carefully use their armoured vehicles. The repair centres of damaged equipment have been opened in several cities. Ukraine received military assistance from Canada: devices for mine clearance, communications equipment, night vision devices, medicines and warm clothing.


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