Ukrainian media review on February 18, 2015

WAR AND CRISES SETTLEMENT

Authorities talk about the “smooth” withdrawal of Ukrainian Armed Forces from Debaltseve while social media flooded by critical posts of the opinion leaders addressed to the President of Ukraine.  By President Poroshenko is being harshly criticized and accused of lying and covering up unprofessional executives of Ministry of Defense and the General Staff. In the contrast with that, some opinions in social media consider “Debaltseve” to be a part of the Ukrainian authorities’ strategy: to achieve victory, Ukraine should gain support from West; “Debaltseve operation” should provide strong evidence of how pointless any negotiations with Putin are and how dangerous he is for the entire Western civilization.

The EU should impose tougher sanctions against Russia, said Ukraine’s representative to the EU Konstantin Eliseev in his interview to German Die Welt. “Sanctions are the only way to bring Russia to the negotiating table and to discuss a peaceful solution to the conflict”, – he claimed. If the hostility continues and Minsk agreements are violated, the EU is ready to introduce further action, according the EU High Representative for the Common Foreign and Security Policy Federica Mogherini statement.  Mogherini’s rather broad statement was the only reaction of EU leaders to the situation around Debaltseve.

The EU will resume antitrust investigation against “Gazprom”, The Wall Street Journal reported with reference to the European Commissioner for Competition Margrethe Vestager.

President Poroshenko during the telephone conversation with the US Vice President Joseph Biden urged the US to implement its earlier statements about making additional funds available to strengthen Ukrainian defenses system.

NATO Secretary General, Jens Stoltenberg, appealed to Russia with call to stop assistance to separatists in eastern Ukraine.

Ukrainisn Cabinet of Ministers proposed the President an annual target program of cooperation between Ukraine and NATO in 2015. According to Prime-Minister Yatseniuk, the program has 5 main blocks, which will be implemented in the framework of cooperation between Ukraine and NATO. These are: modernization of communication systems and information exchange within the Armed Forces of Ukraine, retraining and resettlement of Ukrainian soldiers, program of physical rehabilitation (includes injured Ukrainian warriors prosthetics), logistics and standards and, finally, cyber defense.  In his statement Prime Minister did not specify the timing of such a program implementation.

Security Council has approved an appeal to the UN and the European Union on the deployment of peacekeeping and security mission on the territory of Ukraine. In addition, the National Security Council has approved the adoption of amendments to the law on the military situation legal regime.  President Poroshenko proposed to create a War Cabinet at the National Security and Defense Council.  According to the President, the War Cabinet should ensure effective coordination of security and defense.

 

REFORMS

Ukraine has confirmed gas tariffs increase by 280% and the heating tariffs by 66%, reported the National Bank of Ukraine Head Valeriya Gontareva. Also Gontareva added that the increase in tariffs will be sharp and because of that the inflation by the end of 2015 will constitute 25-26%.

Without additional financial aid Ukraine can resist until May, the latest – until October, Capital Times investment company Managing Partner Eric Naiman stated. According to him, the amount of additional financial assistance will depend on the situation in the country. The expert also expressed the view that reforms are vital to the Ukrainian government. First of all, according to Naiman, it is necessary to reform the energy sector. Government should be more serious about energy prices increase.

GOVERNMENTAL ACTIVITIES

Government projects of changes to the State Budget for 2015 has nothing to do with the actual economic situation, says economist of the International Centre for Policy Studies (ICPS) Angela Bochi.  She cites the following fact: changes include the growth of profitable part of the budget to 498 billion, which is 134 billion more than in 2014 year. “Nevertheless, reaching such unprecedented revenue growth is unrealistic even with inflation of 26%,” – emphasizes economist.  However, the increase of the tax burden, which is included in plan of increasing of budget revenues, may lead to further shadowing of economy and minimization of business.  “With the decline in real GDP to 5.5%, an inflation rate of 26.5%, and increase in the discount rate to 19.5%, budget can not be implemented in accordance with the plan,” – claims Bochi.  According to the expert, the only way out of a difficult economic situation and the high level of budget deficit is the revision of public spending, which may help to reduce the fiscal pressure and optimize the activities of the government.  “However, the government is not ready for such changes yet” – stated Bochi.

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