January 14, 2015

January 5-11, 2015 Ukraine: Main topics the week - Further escalation of the conflict in Eastern Ukraine

5-11 January 2015 Weekly ighlights by "Digests and Analytics - Ukraine" News Agency

The government is looking for additional money in the West. Elections of the Anti-Corruption Bureau Head is underway. Further escalation of the conflict in Eastern Ukraine. Ukraine is fencing off the occupied Donbass. The terrorist attacks in Paris may represent an attempt to play an Islamic card by Russia in Europe. Peace talks to find a solution to Donbass conflict nearing collapse.

Elections of the head of the Anticorruption Bureau

The Committee to elect the head of the Anti-Corruption Bureau, began selection of the candidates. The Committee consists of  representatives nominated by the Cabinet of Ministers, the President and the Verkhovna Rada.  The leader of the Crimean Tatar Medzhdlis Chubarov is elected as a chairman of the Committee, and his first deputy - a well-known human rights activist Zakharov. President Poroshenko addressed the first session of the Committee.
The members of the Committee set legal requirements to the future head of the Bureau: age up to 65 years old, a law degree, transparent tax return, non-participation in political parties. A candidate may be a foreign national, who in case of selection would be required to take the Ukrainian citizenship. Despite the announced independence of the Bureau from the government, the Bureau has no jurisdiction to open any corruption cases against the highest leaders of the country, the Attorney General, the Chief Justice, and the head of the National Bank. Moreover, the procedures on how to bring any perpetrators of law to justice are not yet established.  As President noted, the current law does not fully comply with international norms and will be modified based on the recommendations of the Committee.

The disappointing year-end results for Ukraine. Ukraine's leadership is looking for money in the West

By the year end, the state budget has missed 8% of revenues, which accounted for more than 36 billion USD. The hryvnia exchange rate against the dollar has fallen by half. To Service the public debt in 2014, Ukraine has spent 121 billion USD. President Poroshenko signed into law the increase in the ceiling of public debt by 161 billion USD - to 968 billion USD. The Minister of Economic Development and Trade Abromavicius said that Ukraine needs $15 billion to stabilize its financial system.
According to the State Statistics Service data, the annual inflation in Ukraine amounted to almost 25%. In December, it increased from 1.9 to 3%.
The Ukraine's leadership is trying to convince foreign financial institutions and governments in its ability to  guarantees loan repayments. The President and the Prime Minister held talks and meetings with the heads of state and governments of EU countries to discuss issues of macro-financial assistance.
Prime Minister Yatsenyuk said that new credits will be directed towards servicing foreign debt rather than paying salaries or financing the state budget. He noted that the government has started reforms in the country and is ready to start repaying its debts.
Germany provided  financial guarantees for € 500 million loan to aid in the restoration of Donbass, the European Union - to € 1,8 billion. Most Western experts, as well as their governments, are not confident about the efforts by the the Ukrainian government to reform the country  - and whether these are real and not just an imitation.
The agreement to reach a consensus on additonal import charges imposed by Ukraine on EU countries has not been achieved and further negotiations to continue.
The IMF mission intends to continue its work in Ukraine till the end of January to decide on allocation of the next tranche of a stabilization loan and the possibility of increasing the amount of financial support.
Billionaire Soros called on international financial institutions to provide immediate support to Ukraine, because the country may not have sufficient resources to deal with continous external aggression.

War in Donbass

There are daily intensifying battles in the conflict zone in Donbass. Every day Ukrainian soldiers and civilians are being killed. Observers report the regrouping and concentration of Russian forces near Donetsk, Volnovakha, Debaltsevo, and in the areas along the highway "Bahmutka", and near Luhanskaya village.
Russia continues to move its troops and equipment to Ukraine through the state border. Military experts report on improvement in communication between the Russian Army and terrorist armed groups of the Donbass "republics” as well as their logistical support through supplies of Russian  fuel, spare parts and ammunition. Situation has deteriorated since another "convoy" from Russia crossed into Donbass. The Minister of Defence Poltorak said that Ukrainian army is fighting against 7.5 thousand Russian military in Donbass. Experts indicate that this figure is likely to be at least twice higher, and not including hundreds of tanks and armored vehicles, and up to a thousand of artillery cannons and MLRS units.
On the territories of self-proclaimed DNR and LNR “republics” Russian forces are trying to establish control over local militias and Cossacks, which results in frequent violent confrontations and shootings, however these infights did not reduce the intensity of the attacks on the Ukrainian positions.
The "Right Sector" is calling on initiation of the active guerrilla war and sabotage activities in the occupied territories.
The number of officially registered migrants from the combat zone reached 838 thousand. Their problems are further exacerbated as a consequence of the dire state of the economy, rising unemployment and increase in housing prices.

Ukraine is fencing off from the occupied Donbass

The NSDC has identified seven travel corridors with access to the area controlled by the militants in the Donbass, where Ukraine will install border checkpoints, customs and police control. Special permits issued by SBU will be required in order to cross these border points, however no details document design and procedures are announced. Three of the seven crossings were temporarily closed to transport because of the increased attacks by militants on the positions of the Ukrainian army on January 11. The Transportation Safety Inspection reported that starting January 6 all intercity bus passenger services to be halted in connection with the threat to human life. Earlier similar termination of services was introduced at the crossing checkpoint into Crimea. However, in reality, the bus shuttle service continues.

Building the Ukrainian army

The corruption in supplying the army is still enormous. According to the Presidential Adviser Biryukov, up to a quarter of the defense budget is stolen. During the presentation of the new military equipment by the President to the units of the Ukrainian army on the ground in Zhitomir, one of the military units refused to accept broken and unworkable equipment. Nevertheless, the president announced the full readiness of the army.
Volunteer Mrs. Stelmach is appointed as the Director of the Procurement Department of the Ministry of Defense.  Large-scale layoffs are expected to occur soon at the Defense Ministry and at the General Staffs.
The Army is expected to become up to 104 thousand strong in 2015.  Three waves of mobilizations are planned, of which 50 thousand compulsory draftees are to be called and additional 54 thousands are to be drafted in case of the worsening situation.  According to Biryukov, the army urgently needs introduciton of the contract service, to exclude incompetence and other problems associated with looting and drunkenness among servicemen, which is reported to occur in the combat zone.
The head of the Kharkiv regional administration said that the Interior Ministry layed off about 500 employees, who refused to go to the frontline.
Ukraine is receiving uniforms and weapons from Lithuania. Non-lethal aid from Canada is being unloaded in the port of Odessa. Two transport planes with military equipment are to fly from Canada in the near future.

Terrorist attacks in Paris

The terrorist attack in Paris carried out by Islamic extremists claiming to belong to "Al Qaeda" killed two policemen and 10 employees of the satirical magazine Charlie Hebdo, which printed cartoons of the Prophet Mohammed on January,7. The terrorists and several hostages were killed during the police operation aimed to free hostages. The anti-Islamic sentiment sharply increased in France and in Europe in connection with the attack in Paris. The level of terrorist threat is regarded as high by the police.
According to the police up to 3.5 million people took part in solidarity marches across France on January 11, among them - the leaders and foreign ministers of different countries.
During the event, President Poroshenko held brief talks with German Chancellor Merkel and French President Hollande. He also met with leaders of the European countries and the Secretary General of NATO.
Experts point to a possible connection between the terrorist attacks and Russia, which might be trying to play an "Islamic card" in order to destabilize Europe. These events strengthen the position of the pro-Russian party "National Front", led by the prominent French nationalist Mrs. Le Pen.

International support for Ukraine

The EU is trying to resolve the conflict in eastern Ukraine through negotiations within the Minsk agreements. The talks between the Ministers of Foreign Affairs of Ukraine, Russia, France and Germany to prepare for the meeting in Astana (Kazakhstan) did not lead to a meaningful result because of the position taken by Russia, which insists that the Ukrainian policy needs to return under Russian control, and, in particular, Ukraine must carry out the constitutional reform beneficial to Russia. German leaders believe that the meeting in Astana would make sense only if there is a real chance of a breakthrough in the negotiations. The US will not take part in the meeting in Astana, but will support efforts aimed at the overcoming of the crisis.
French President Hollande indicated a possible easing of the sanctions against Russia in the case of achieving peace in the Donbass. German Chancellor Merkel in a video appeal called on Europe to be united against such violations of international law as Russia's invasion of Ukraine and the annexation of Crimea. In her opinion, the partial easing of sanctions against Russia can not take place. The US administration has said that in case of progress in resolving the crisis in eastern Ukraine, some sanctions against Russia can be lifted, however they can not be completely removed until real results are achieved in the implementation of the Minsk accord. The representative of the administration of US President Ernst described relations with Russia as "complex" and warned that failure to implement Minsk agreements will lead to tougher sanctions.
The Republican Party known for its anti-Russian stance won a majority in both houses of Congress. The Chairman of the Senate Committee on Defence McCain demanded the immediate return of Crimea to Ukraine and the withdrawal of Russia from the Eastern Ukraine as a pretext to consider the non-alignment of Ukraine with NATO.
NATO is increasing its military presence in Eastern Europe and plans to restructure forces. The Alliance partially replaced US troops at military bases with the local forсes. The US moved their forces further away from the border with Russia and Belarus and significantly strengthened the borders.

Freeing Ukrainian pilot Ms.Savchenko

The Ukrainian military pilot Ms. Savchenko continues her hunger strike in prison in Russia to demand recognition as a prisoner of war. Russian authorities transferred her to solitary confinement "for violation of the regime". Washington is demanding her immediate release as well as the release of other Ukrainian citizens illegally detained in prisons in Russia.
The leader of the party "Fatherland" Tymoshenko asked Savchenko to interrupt the hunger strike, as this may cause irreversible damage to her health.
The Ukrainian consul, who managed to get a meeting with Savchenko, said that she was very thin. The Savchenko’s advocate urged the world community to undertake a global campaign in her support on January 25 - the opening day of the PACE session, where she is an official  member of the Ukrainian delegation.

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