Inside Ukraine 43
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Inside Ukraine February 20, 2015 №43 Content The Government Policy . 1 Minsk-2: what next? . 1 Lack of interaction between MPs and President in judicial reform . 2 Economic Situation . 5 IMF assistance will help avoid default . 5 Budget 2015 — version 2 .0 . 6 Oil and gas sector: IMF requirements, reserves and reality . 7 Political competition . 9 The President tries to increase his influence in regions . 9 New challenges for “Opposition bloc” . 10 Inside Ukraine 43 The Government Policy Insisting on a three-day delay of cease-fire dur- strengthen sanctions against Russia for its blatant ing the Minsk talks, Russia believed that this time violation of the Minsk agreement. will be enough for militants to win Debaltseve, but Kyiv is expected to provide a clear strategy on Ukrainian soldiers held the town. February 15, how Ukraine will act after Minsk-2 is violated. The 2015, brought less intensive shelling along most of introduction of martial law, the possibility of which the frontline, with the exception of Mariupol and was mentioned by Ukrainian President Petro Po- Debaltseve. Near this town, a considerable forma- roshenko, will not change the situation drastically. tion of Ukrainian troops faced a critical situation, Ukrainian society should get used to the idea that which ultimately resulted in their withdrawal from this is a long-term conflict. Under these circum- the beachhead. stances, it is necessary to promote the army, increase Moscow sought to repeat the events of late Au- domestic military production, fight corruption in gust 2014, when Ukrainian troops were encircled by procurement and improve HR policy at the Ministry Russians near Ilovaisk, a military parade devoted to of Defense. At the same time, an increase in military the Independence Day was held in Kyiv and Ukrai- expenditure should not be an obstacle for economic nian military command denied the critical situation growth and the necessary reforms. on the frontline. This time, the encirclement in De- An inability to agree on key documents in terms of baltseve coincided with the official commemoration judicial reform shows a lack of cooperation between of the Maidan shooting anniversary. The only way to the presidential administration and MPs. The disre- avoid this scenario was to arrange a safe withdrawal gard of expert criticism and the desire to adopt the of Ukrainian soldiers from the encirclement and im- subsequent laws in a rush after months spent in vain mediately appeal to the international community to in negotiations undermines popular trust in reforms. Minsk-2: what next? The agreement signed last week in Minsk will bring postpone and then to derail the implementation of neither peace, nor a cease-fire. The de-escalation of the peace agreements. Meanwhile, such actions will the situation is not in the Kremlin’s best interest. The consolidate Western support around Ukraine. constant delay of measures within the peace plan (a The passage of time plays against Russia as low complete ceasefire in three days after the document prices for oil, Western sanctions and the need for was signed, the establish- The Kremlin resources to fuel the Donbas conflict create serious ment of Ukraine’s control is not interested financial pressures. Fully understanding all of these over its borders only by in the de-escalation implications, Putin will try to speed up the game the end of 2015) proves in Donbas in order to reach his goals: the federalization and Moscow’s endeavor first to neutral status of Ukraine. Therefore, the relative lull Inside Ukraine 43 1 The Government Policy will end faster and the cease-fire regime will be vio- on how the lower intensity of fire will be used and lated more frequently than it was after the similar what steps Kyiv will take after Russia and separat- agreement in September 2014. ists continue the offensive. Though Minsk-2 will not bring a about a com- On February 14, 2015, Petro Poroshenko stated: plete cease-fire, a decrease in shelling intensity will “If there is no peace, martial law will be introduced allow Ukraine to regroup Decrease in throughout the country, not only in Donetsk and its forces. In the mean- shelling intensity Luhansk”. At the same time, the country’s defense time, it is necessary to should be used to capacity should be improved even without the in- avoid large human losses, increase Ukraine’s troduction of martial law. First of all, this includes conduct qualitative mo- defense capacity . the eradication of corruption at the Ministry of De- bilization and provide fense and its General Staff, an increased quality of the army with modern weapons (both through mobilization, which will focus on military special- work with international partners and the use of do- ists and motivated individuals, and the promotion mestic production facilities and the promotion of of military service throughout Ukraine. technology development). Militarization may give a push to the economy Several factors prove the impossibility of the sec- under crisis, especially taking into account the ond Minsk arrangements. First of all, the document number of military enterprises in Ukraine and contains many vague formulations, which will allow jobs they can provide. According to the Minis- both parties to loosely interpret the provisions to try of Defense, in 2015, Defense may be their advantage. Second, the OSCE will be respon- a third of the ministry improved even sible for monitoring the cease-fire regime, but last budget (UAH 14 bln.) without martial law autumn the organization did not fulfill this func- will be spent on the de- tion and Ukrainian society talks more and more velopment of armaments. Meanwhile, an increase about the increasing Russian influence on this orga- in military expenditure requires a tougher control nization. Third, pro-Russian separatists will refuse on their use and the eradication of corruption in to be the first to withdraw their artillery from the procurement. frontline, whereas unilateral actions of Ukraine in Taking into account that the conflict may be- this regard will again lead to an increase of the ter- come long-term and last several years, Ukrainian ritory controlled by the militants. Fourth, the Minsk society must learn how to live under war condi- agreements do not mention Crimea, which cannot tions. Israel would be a good illustration of a coun- be ignored by Ukraine. Finally, the package of mea- try with a high level of civil security and constant sures to implement the Minsk agreements does not prevention of terrorist attacks. include clear obligations for Russia, which insists on Further, during mobilization in Israel, soldiers its role as a mediator, not a party in the conflict. are grouped according to their skills and interests. The fragility of the Minsk agreements will re- As a result, citizens who did military service together quire the Ukrainian gov- Fragility of Minsk often start jointbusiness and launch start-ups, espe- ernment to immediately agreements cially in the IT sector. The military is not only a fac- develop a back-up plan requires plan B tor of socialization, but it also develops a sense of pa- — a long-term strategy from Ukraine triotism and national identity among Israeli youth. Lack of interaction between MPs and President in judicial reform The drawn-out simultaneous consideration of lobbying of the draft law by the presidential admin- two draft bills on judicial reform ended last week, istration, the disregard of expert criticism in the fi- when the presidential nal text and the lack of time to study it thoroughly variant was finally adopt- Judicial reform cast serious doubts whether the President is serious ed. However, the strong got two draft bills in his attempts to make the judicial branch inde- at once . 2 Inside Ukraine 43 The Government Policy pendent and change the system. tion was not registered as an alternative, although Throughout the last year, the President and it was submitted later Manipulations Prime-Minister several times emphasized the high and had the same subject of parliamentary priority of judicial reform, given that without it, it of regulation. They claim committee is impossible to reform law enforcement agencies, that the Verkhovna Rada and apparatus fight corruption efficiently and create a systems of apparatus is responsible with two draft laws checks-and-balances in the President-PM-Parlia- for such manipulations. ment triangle. The year of 2014 showed that the lack After civic activists started to criticize bill No. of changes in judicial power makes it impossible to 1656 for its expansion in presidential influence on punish those guilty in crimes against the Maidan judicial power, on January 13, 2015, a compromise or the embezzlement of funds by previous and cur- was achieved through the simultaneous adoption of rent government and ATO failures, which resulted both documents in the first reading. It was expect- in numerous casualties on the Ukrainian side. ed that by the time the Verkhovna Rada considers The officials’ promises, correct in their merit, both bills for the second time, the authors of the have remained empty declarations. The only out- presidential bill will manage to address the major come of judicial reform was the adoption of the law points of criticism and incorporate the recommen- “On restoring trust to judicial branch of power” in dations of MPs. However, on February 12, 2014, the April 2014, but it did not bring any results due to the Verkhovna Rada was fast to adopt the presidential resistance of judges and the lack of interest among text with only minor corrections. politicians in increasing court independence. At the same time, “Samopomich” and the Radi- Though there was a year to elaborate respective cal Party, which are coalition members, took a rig- draft laws, the presidential document was registered id stance not to support the presidential bill.