Ukrainian media review on February 17, 2015

Russia and the self-proclaimed DPR and LPR ignored the ceasefire and observance of silence regime.  According to various sources of information, the situation around Debaltseve is extremely difficult; it is even possible to talk about the “Debaltseve entrap” occurrence.  President Poroshenko gave an order to soldiers to retreat from Debaltseve.

The actual situation in the domestic economy deteriorates.  Foreign media start to write about the possibility of default in Ukraine.  The rhetoric of the Ukrainian authorities more often includes economic arguments, which demonstrate benefits of early peace conclusion.  The Minister of economy claims that it is difficult to predict the decline in GDP in case of the continuation of military conflict.  Nevertheless, President Poroshenko is trying to intensify the reform process – National Council on Reform has identified 15 priority reforms.


Yesterday in the morning, Poroshenko urged Putin to take all measures for the complete and indisputable ceasefire, especially in Debaltseve area, and to begin withdrawal of heavy weapons under the supervision of the OSCE.  A little later, a US State Department spokesman Jen Psaki, claimed that the United States is seriously concerned about the deteriorating situation in Debaltseve, namely the refusal of Russian military to respect the ceasefire in Debaltseve and the inability of OSCE observers to begin their work in the territory of the city.  Adviser to the President of Ukraine, Head of the International Advisory Board on reforms, ex-President of Georgia Mikheil Saakashvili has commented on this situation in the following way: “Ukraine has received additional arguments to require defensive weaponry from Western partners.” The Republicans in the United States require the termination of negotiations with the Russian Federation, the disconnection of Russian Federation from the SWIFT system, and provision of weapons to Kyiv.


The government obliged state-owned companies to publish their financial statements on mandatory basis.  According to Minister of Economy Aivaras Abromavicius, financial statements of all state-owned companies will be published online and will be easily accessible for public.  On the basis of these data Ministry of Economic Development will make an annual report on state-owned companies.  The Minister noted that currently more than half of state-owned companies among the top-100 are unprofitable; only 20% have been audited, and only 15% have a supervisory board.  Abromavicius also added that the procedure of auditors` appointment for state-owned companies will be changed in order to avoid situation when large state companies are audited by unknown small firms.

National Reform Council has identified responsible persons for 15 key reforms, which will be implemented in Ukraine in short term. 

 Reknown Slovak politician and reformer Ivan Miklos appointed as an Advisor to the Minister of Finance Natalia Yaresko.  According to the information, posted on the website of the Ministry of Finance, Miklos will advise on the tax system, decentralization and reorganization of the general government finances.

State Fiscal Service will present the concept of tax system reform to the Ministry of Finance on February 20, 2015.

Minister of Finance Natalia Yaresko noted that she is not a supporter of a single and cardinal tax reform.  She also stated that the ministry is ready to hold a discussion with the business about the revision of the tax and rental rates for subsoil use in the extractive industries.


Energy Minister Volodymyr Demchyshyn informed that the Ministry of Fuel and Energy and the State Fiscal Service will introduce changes for the tax system of Shell and Chevron projects for the extraction of unconventional gas. Demchyshyn said that VAT refund debt is the basic reason these companies have suspended projects in Ukraine.  The companies have invested a lot of money with no refund.

Minister of Economic Development Aivaras Abromavicius informed that Ministry of Economic Development and Trade (MEDT) has drafted a resolution for the Cabinet of Ministers, which introduces changes into the regulation stipulating domestic oil products sales on auction.  According to Abromavicius, conditions of such sale should become more transparent. The main oil producer in Ukraine, “Ukrnafta” is owned by the “Naftogaz of Ukraine” national company that owns 50%+1 share, and the group of companies affiliated with “Privat” group, that owns about 42% of the shares. “Privat” group exercises operational control of “Ukrnafta”.  The government has repeatedly tried to force “Ukrnafta” to sell oil at the auctions.  Last auction, scheduled for February 16 was canceled because “Ukrnafta” refused to submit a request for participation.