05/11/2014 Ukraine: Daily Highlights - Ukraine will not finance the regions, controlled by DPR and LPR terrorists

05/11/2014 Daily Highlights from “Digests & Analytics Ukraine” News Agency

Ukraine will not finance the regions, controlled by DPR and LPR terrorists, but power and natural gas supplies will not be cut. Foreign exchange rate of Ukrainian hryvnya sharply decreased.

Ukraine

• Prime Minister Yatsenyuk declared that the Government doesn’t plan to shut off supplies of electric power and natural gas to the territories seized by pro-Russian terrorists of DPR and LPR as such move could lead to a humanitarian catastrophe.
• The Government is launching a process of creating public TV and radio.
• 600 terminals capable of producing biometric passports will be purchased within the framework of  implementation of visa-free regime with the EU.
• Internal Affairs Ministry opened more than 400 criminal proceedings on evidence of breaching of election laws during the early parliamentary elections.
  Central Elections Commission is still unable to publish the results of the snap parliamentary elections.
• People in the Presidential Administration believe, there is a need for urgent introduction of amendments to the law on “authorities purification”due to the fact that, on the one hand, honest public servants are falling under its scope, and on the other hand, some corrupt officials can avoid lustration.
• PricewaterhouseCoopers agreed to audit more than one hundred enterprises of Ukrainian Defense Ministry free of charge.
• Fuel and Energy Ministry announced that it will not purchase coal from coal mines that are located on controlled by DPR and LPR terrorists territories. Coal mining declined by 2/3 in Donetsk region as a result of combat activities.
• National Bank established the following exchange rates as of 5 of November: 13.50 UAH/USD (+54cop), 16.89 UAH/EUR (+71cop), 3.22 UAH/10 RUB (+13cop). The USD rate reached 14 UAH by the end of the trading session. Banks are allowed to establish the cash exchange rate within a 5% deviation.

Kyiv

• Kyivenergo, which belongs to oligarch Akhmetov, insists that electricity tariffs for public should be increased.

War in Ukraine

• NSDC left the cease-fire regime in Donbass in force.
• Another strike on Donetsk airport was repelled. The intensity of the shelling of the Ukrainian army positions has increased dramatically. Two Ukrainian military were killed during the day.
• Residential areas and infrastructure objects are once again being shelled in Donetsk and Avdiivka. Two civilians killed and four wounded as a result of a shell hitting a school in Donetsk.
• Russia deploys a second echelon of the invading army in the areas near the Ukrainian border. Sightings of rail deliveries of weapons and ammunition from Russian Federation to the territory of Donbass have been reported.
• OSCE declared that no progress has been achieved so far in the negotiations between representatives from military General Staffs of Russia and Ukraine, and with participation of DPR and LPR “republics”, which were mediated by the mission. Ukrainian Defense Ministry denies bilateral negotiations with terrorists. OSCE observers evidenced increased transfer of coal from Donbass mines to Russia by militants.
  OSCE monitoring mission will continue to control the combat zone despite their drones being constantly attacked by militants.
• Ukrainian Government established the amount of compensation to be paid to the families of law enforcement agencies and military killed during the combat actions at 609 thousands UAH.

International

• Republicans won the majority in the US Senate and Congress in the mid-term elections. Senator John McCain, supportive to Ukraine, could become the Head of Defense Committee.
• The EU formally announced it does not recognize the "elections" in the DPR and LPR, and laid the responsibility for their conduct and violation of the Minsk protocol on Russia.
• German Government approved the association agreement between the EU and Ukraine.
• A single banking regulator, which is setup on the base of ECB, has been created in the EU. It is aimed to control activities of major banks in cooperation with national watchdogs.
• Chairman of the Joint Chiefs of Staff General Martin E. Dempsey admits that US troops could be back to Europe as a response to the threat of Russian aggression.
• Russian President Putin was recognized as the most influential person by Forbes.
• Russian President Putin at a meeting of the Commission on Military-Technical Cooperation, said that there is a civil war in Ukraine and civilian towns are under mortar and rocket fire.
• According to poll data from the “Public Opinion” group, majority of Russians don’t want to see DPR and LPR to be integrated into Russian Federation, and more than half of the polled believe that Russia shouldn’t intervene into Ukrainian internal affairs.
• Russia refused to participate in the next nuclear security summit, which is planned for 2016 in the US.

Trends

• The part of the budget filled with taxes and fees peaked in the history of Ukraine. This shows increasing pressure on business and the inevitable extinction of the business activity, together with budget revenues.