UKRAINE WATCH
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OCTOBER 2015
. October 2nd Paris meeting of Normandy Four and possible Donbas reintegration . Fragile Government coalition in crisis, facing pressure from oligarchs and opposition . Reform of natural gas market . Local elections and their impact on political players . Prosecutor General's Office as conflicts generator
Meeting of Normandy Four: The October 2nd Paris meeting of Normandy Four was held in different atmosphere then the previous one in Minsk in February 2015. The relative calm on the battlefield created an opportunity for further advancement on the diplomatic front. All parties reaffirmed that the path of the Minsk agreements is the only way towards the resolution of the conflict. Further steps were agreed to stabilize the situation in eastern Ukraine, creating a space for peace process to run into the next year. France and Germany, not willing to accept a frozen conflict scenario, are pushing both sides towards political process which should deliver a lasting political settlement. So far, pro-Russian rebels postponed (not cancelled) controversial local elections. Peter Shuklinov reports on details of the Paris talks, referring to the sources within the Ukrainian delegation. Ukraine and separatists seconded by Russia are interpreting the steps agreed in Paris freely, but further development and success of the framework agreed in Paris will be decided in subsequent talks within the Trilateral Contact Group, leaving the wide range of scenarios open. In an effort to outplay the adversary, Ukraine and Russia are both exposed to traps and huge risks with uncertain outcomes. In parallel, both sides have limited space for maneuvering. Ukrainian public is extremely anxious about the progress of the political process, with radicals presenting every diplomatic activity as a betrayal of the nation. On the other side, the Presidential Administration (commonly referred to as Bankova [Street]) neglected communication with public and factions in Verkhovna Rada, Ukraine's parliament, for a long time, creating space for bloody clashes in Kyiv on August 31st. The Presidential Administration now takes a more attentive approach, explaining its tactic accommodated to new realities. Ukrainian representative in the Trilateral Contact Group Iryna Herashchenko wrote an op-ed for Ukrainska Pravda in which she explains country´s position in the Paris talks. Another valuable insight into Kyiv’s tactic is offered by Roman Bezsmertnyi, the country´s representative in the political subgroup of the Trilateral Contact Group who participated in the Paris talks.
Reintegration of Donbas or status quo: President Poroshenko turned to the nation saying that it is necessary to hold elections in occupied territories and asked Verkhovna Rada to support this process, confirming that reintegration of Donbas is the scenario Ukraine is expected to accommodate now. Liga.net tries to find out conditions under which the Presidential Administration and parliamentary
factions are ready to support local elections in Donbas. Short of votes to pass necessary laws, Bankova may try to bargain with Rada factions, using the carrot and stick approach once again. If Ukraine is forced to reintegrate Donbass on Moscow´s terms, stability of the already fragile government coalition is in question. The consequent weakening of the central state power fits with Kremlin goals. Novaya Gazeta reports that Oleksandr Yefremov clan may play an important role in the process of Donbas reintegration, since leadership of Luhansk separatists is closely associated with his name. Rinat Akhmetov and former Donetsk elites associated with the Party of Regions are rumored to play their part in Donetsk. Meantime rebels in Luhanks were preoccupied with a different problem. Under the cover of the fight against corruption, local siloviki engaged themselves in the power struggle against Igor Plotnitsky, trying to gain control over financial flows from murky coal supply schemes to Ukraine reportedly involving the LNR´s leadership and Ukrainian siloviki.
Government coalition hibernating, facing pressure from opposition and oligarchs: While Petro Poroshenko Bloc and Yatsenyuk People's Front discuss long awaited reshuffle of the government, the coalition factions in Verkhovna Rada stand idle, waiting for results of local elections, not even able to gather enough votes to accept resignation of its own ministers. Batkivschyna refused to nominate own candidates for ministerial posts, avoiding the burden of responsibility and keeping the status of the internal opposition within government, which creates an opportunity to increase its electoral rating. Western partners are unhappy with the slow pace of reforms, coalition infighting and high level corruption scandals surrounding the President and Prime Minister inner circle. December will mark one year since Verkhovna Rada approved Yatseniuk cabinet, providing him with a year long immunity against dismissal. Hence deputies will be soon able to call no confidence vote. The “patriotic” part of the parliamentary opposition may create a platform against President Poroshenko, preparing itself for possible early elections. Former SBU head Valentyn Nalyvaichenko, presenting himself as anti-corruption activist, accused the ruling power of covering high level corruption, denying his rumored links with Yanukovych's former chief of staff, Sergei Levochkin. Nalyvaichenko opened another front against the President, accusing his close ally Ihor Kononenko of money laundering. The criminal case against forcibly exiled oligarch Dmytro Firtash initiated by Interior Minister Arsen Avakov few months ago is on its way to be silently closed and his chances for return to Ukraine are growing. Former business partner of Petro Poroshenko Konstantin Grigorishin unleashed public attack against Arseniy Yatseniuk and his government, but also against Boris Lozhkin, the head of Presidential Administration. RBK Ukraine claims that Grigorishin made his fortune by taking over Pavlo Lazernko murky business empire.
Developments on energy market: The law on the natural gas market entered into force in October 2015, with no secondary legislation passed. Regional gas distribution networks, most of which were controlled by Dmytro Firtash, were returned to Naftogaz. The Ministry of Energy and Coal Industry was deprived of company ownership with Naftogaz transferred under the control of the government. EBRD and Ukraine signed a USD$ 300 million loan agreement to finance gas purchases on EU market for the upcoming winter. The loan is tied to a corporate governance reform of Naftogaz and was questioned by Energy Minister Volodymyr Demchyshyn, whose ministry was reluctant to give up political control of Naftogaz. The Ministry of Economic Development will be responsible for implementation of the reform plan, which may turn Naftogaz into transparent and effective company, but also carries many risks if government promises will fall short of realizations.
Local elections: After presidential and parliamentary elections, the local elections were another step towards process of democratic consolidation and legitimization of power after Maidan revolution. The vote was seen as the test of survival of fragile ruling coalition which is constantly challenged by opposition and oligarchs, who were treating local polls as prelude on early elections. The elections were held across the country with exception of eastern areas controlled by separatists, some government-held territory close to the contact line and Crimea. About 1.2 million internally displaced persons could not to cast their vote due to the obsolete electoral legislation. The pooling was disrupted and postponed
in Mariupol and Krasnoarmiysk. The situation was complicated in Odesa. The mayoral runoffs will be held in several regional centres, including Kyiv. Dnepropetrovsk has turned into a “hot” spot, getting ready for clash of Oleksandr Vilkul (Opposition Bloc) with Borys Filatov (UKROP). Hennadiy Korban, the leader of the UKROP party and close associate of Filatov and oligarch Ihor Kolomoyskiy, was arrested shortly after election with President Poroshenko being accused of putting political pressure on his political opponents and applying double standard justice. Novoe Vremya summarized main conclusions, which may be drawn based on the vote. Maksim Kamenev and Tatiana Nikolayenko analyzed possible impact of local elections outcomes for nationwide political players. Kamenev also reports that dissatisfaction with Prime Minister Yatseniuk is growing in Poroshenko team and question of government reshuffle and possible Yatseniuk dismissal is discussed again. Presidential team tries to find out how to rid of Prime Minister without causing the downfall of government and early elections. Yatseniuk is not giving up, counting on the support of the West and good relationship with some oligarchs.
Shokin under pressure: The conflict within Prosecutor General's Office (PGO) intensified in last weeks, with tensions growing between group of young reformers (Sakvarelidze – Kasko) and old guard represented by Prosecutor General Viktor Shokin. The PGO failed to deliver justice in numerous high profile cases and Shokin is accused of covering the corruption within his own office. By hindering anticorruption reforms and reform of his agency, he put in jeopardy fulfilment of visa liberalization action plan, causing the conflict with Ukrainian Ministry of Foreign Affairs and with EU delegation in Kyiv. Public pressure for Shokin dismissal is backed by the Western partners. The group of deputies collects signatures for his dismissal in Verkhovna Rada. Sooner or later, President Poroshenko will have to address the situation, but the main intrigue is whether his successor can make qualitative difference.
Visegrad and Ukraine: Joint Declaration of Visegrad Group Ministers on Gas Transit Through Ukraine OSW: The blockade of Crimea OSW: Zakarpattia – together, but separated OSW: The meeting of the ‘Normandy four: an extension of the status quo in the Donbas CEID: NATO Enlargement: Will Warsaw Deliver? PISM: Local Elections: A Test for Ukraine OSW: The migration of Ukrainians in times of crisis CEPI, PISM, PSSI, CEID: Crisis in Ukraine and the V4’s Defence and Military Adaption Balázs Jarábik for V4 Revue: Ukraine`s fall: Rocking the boat Wyborcza: Власти Украины не могут больше отмахиваться от реформ войной в Донбассе Zerkalo Nedeli: Польские пятилетние визы: обещанное стало реальным, но проблемы остались Zerkalo Nedeli: "Переступить порог собственной памяти". Два взгляда на польско-украинские отношения в контексте тяжелых и трагических страниц прошлого Zerkalo Nedeli: Словакия. Российский оазис в центре Европы Алена Гетьманчук: Как мы теряем проукраинскую Польшу Hungarian Ministry of Foreign Affairs: Agreement must be reached between transatlantic community and Russia within shortest possible time
Edited by Gabriela Mikušová, CEPI’s Associate Fellow.