Tuesday, March 31, 2009

Big day under the big top tomorrow

On Tuesday an important packet of anti-crisis proposals will be voted on in the VR. These may well open the door to the second tranche of IMF funds required to prevent the Ukrainian economy 'going down the tubes'.

Even though there has been much talk of PoR blocking parliament by their spokesmen, the chances of a successful voting outcome are fair, despite the unpredictability of Ukraine's politicos.

'Segodnya' claims PoR will permit voting to take place, and the 17 pro-Yushchenko 'yedynotsentrysty' controlled by presidential secretariat head Viktor Baloha will also, most likely, vote to support the motions. Excise duties and other taxes, particularly on small businesses will be increased. BYuT have had to promise to support Yushchenko's Oleh Shamshur, Ukraine's ambassador in Washington, for the Minister of Foreign Affairs post as a quid pro quo.

Maybe deputies are realizing how deep in the doodoo the country really is.

p.s. President Yushchenko has decided at a late hour to drop by the VR tomorrow too. I hope he doesn't not mess things up.

Sunday, March 29, 2009

Lytyvn alleges Ternopil vote rigged

Check out Friday's 'Svoboda na Interi' TV broadcast.

In an assured performance, VR speaker Volodymyr Lytvyn alleges that the recent oblast rada election results in Ternopil were 'manufactured' [zrobleni]. [About 17 minutes into the clip.] He calls the machinations 'a fact'. Furthermore, he is disturbed that the appropriate authorities have not uttered a word of protest or 'raised the alarm', but, all of a sudden, many are now keen on early presidential elections, having gotten away with their election fraud in Ternopil.

He points out the the dilemma faced by PoR, who organised not entirely successful anti-government demonstrations on Friday: "We have people, who rule over almost half of the country, who are striking. Against whom are they striking?" In his words, it is those same owners of the large enterprises who cannot organise work for their employees and cannot provide for the sociological needs of their workers.

He makes a powerfully expressed appeal to PoR not to block the working of VR next week, and suggests they propose a parliamentary motion in favour of early parliamentary and presidential elections. If this was the start of his presidential campaign, it was pretty impressive.

Friday, March 27, 2009

PoR's Spring offensive

Party of Regions' official site carries this:

"On March 27 one hundred days allotted by the Party of Regions to the authorities to improve the situation in the country elapse. The authorities displayed their failure to fight against the crisis. And the people tell these authorities: “Your time has passed – it is time to answer!”

On March 27 at 12 a.m. come to Independence Square in Kyiv. Say your ‘no’ to these authorities!"

Apart from demos, PoR it seems, are now quite keen on early parliamentary elections too.

"Businessmen from PoR who, last Autumn did not insist on early elections, have now changed their point of view. They have become convinced that for each day under the present authorities the Ukrainian economy is losing more than it would as a result early elections in the Autumn", claims one political scientist quoted in an article in 'Segodnya'.
"Clear[er] plans will be formed depending on the extent of support for Friday's protest actions, and also on reciprocal actions undertaken by Tymoshenko", says another politolog.

One of BYuT's leaders, Mykola Tomenko, also sees a direct link between Friday's protests and early elections - he has even named June 7th as the concrete date for elections. According to his information the President's secretariat has been greatly encouraged by the success of Viktor Baloha's 'United Center' party in the recent Ternopil local elections, and they are preparing for general elections on this date. Oleh Tyahnybok, leader of the 'Svoboda' party who stormed to victory in the Ternopil local elections has spoke of June general elections to 'Segodnya' too.

'Segodnya' speculates that BYuT could accept previously unacceptable conditions and propose the creation of a parliamentary coalition with PoR in the current VR in order to eliminate the possibility of such early elections. Whether there are enough PoR deputies ready to agree to this is unclear.

I wonder if the man in the street has much stomach for such demonstrations in Ukraine at the moment?

Wednesday, March 25, 2009

BBC on Ukraine

Check out a rather surreal BBC2 'Newsnight' video speculating on how close Ukraine is to financial meltdown here

Another thing for European banks to worry about.

The video should be accessible for 7 days.

Thursday, March 19, 2009

Will BYuT swallow bitter Terno-pill?

"Kyiv Post's" report on recent local elections held in the western Ukrainian city of Ternopil has major omissions.

A different view point provided here.

Most stunning of all is a posting on BYuT's official 'Batkivshchyna' site, which accuses head of the presidential secretariat, Viktor Baloha, in no uncertain terms, of rigging the election. [quite ironic really]

Some portions from the article:

"A dangerous farce by administrative means with brutal legal and Constitutional violations took place in the Ternopil oblast on 15th of March. Administration officials led by Baloha want to represent this farce as free elections..Numerous falsifications took place during voting..Yes, the true number of people who voted did not exceed 30%, but an hour before the end of voting 20% of voting slips were cast.."

"What happened in Ternopil permits us to confirm with alarm, that yesterday a trial run of a total system of voting falsification took place which could also be employed during the presidential elections, and in all subsequent elections.."

"BYuT did not take part in this show under the name of Ternopil elections and does not recognise its results. We warned in advance about this and we thank our supporters - the greater portion of residents in this oblast - who did not take take part in this dirty business. We will challenge the results of this election in court.."

Tymoshenko and Yushchenko will have something to talk about during their flight home from Brussels tonight...

Tuesday, March 17, 2009

Frankenstein rises?

An article in the normally serious daily 'Obozrevatel', entitled "Frankenstein comes to life - coalition of three almost a reality", claims that talks between BYuT, Party of Regions, and Lytvyn's Bloc [BL] on the formation of a major new parliamentary coalition are now well advanced.

The parties are agreed on neutral status for Ukraine, retention of the status quo on Russian and the Black Sea fleet, membership of the CIS and membership of the GUAM bloc [Georgia, Ukraine, Azerbaijan, Modova].

Government posts are to be 'divvied up' as follows: three first vice-premier's to PoR, the entire economic block to PoR, and social and humanitarian ministries to BYuT. Customs and tax administration to PoR, anti-monopoly committee, Treasury and and National Reserve to BYuT. According to the new agreement, BL are to be granted control over the Ministry of Transport, the National Bank, State Property Fund and several minor departments.

Most significantly, 'Oboz' claims the parties have practically agreed on a new constitutional reform program for Ukraine. Having changed the Constitution, they want to transform Ukraine into parliamentary republic. Under their agreement, the new President will be chosen by the Verkhovna Rada, and this is to occur once president Yushchenko has been impeached. The VR will then select Viktor Yanukovych as president whilst Yulia Tymoshenko will remains Prime minister and Volodymyr Lytvyn remains in the VR speaker's chair.

A moratorium on all-Ukrainian elections will be declared until 2015; i.e. the present parliament will prolong its existence for a further 3 years beyond the present constitutional norm.

The article does state that there is still a lack of trust between the parties, but claims: "the level of readiness of agreement between the three parties is about 85%". Volodymyr Lytvyn seems to be the main driving force for these most significant proposals.

A PoR-BYuT deal has been a possibility after last summer's plotting on the high seas and voting in the VR.

Tonight, on TV, PoR 'mouthpiece' Hanna Herman confirmed that her party supports the impeachment of president Yushchenko, and said, "We have a lot of deputies who consider that in BYuT there are very many interesting people, pragmatic, with whom we could work, with whom it is easier to work with that with Our Ukraine."

And 'Segodnya' reports SBU chief Valentyn Nalyvaychenko's attitude to PM Tymoshenko and her party has become markedly sweeter after the party's somewhat unexpected support in the VR to confirm his appointment as state security head. Maybe he realises in which the direction the wind is beginning to blow..

Thursday, March 12, 2009

RUE's gas was sold to Naftohaz after all..

Glavred publish what they claim is a copy of a contract, dated 6th February 2009, signed by both Gazprom and Naftohaz Ukrainy officials, which declares that Gazprom has transferred ownership of 11BnCM of gas in Ukraine's underground reservoirs to Naftohaz for $1.7Bn.

Looks like the president and his SBU guys made a mistake.

All that Firtash possibly has left now is kompromat..

Firtash in trouble

Once it became clear that prime ministers Putin and Tymoshenko had decided to cut RosUkrEnerho out of their two countries' gas business to settle the most recent gas spat, Dmitro Firtash and Ivan Fursin, who own half of RUE were finished. [The other half of RUE is owned by Gazprom.]

On 29th January this year arrest warrants had allegedly been issued by the investigative committee of the RF prosecutor's office. According to investigators the two businessmen were taking refuge in Ukraine and were refusing to appear as witnesses in a case concerning Semyon Mogilevich.

Whatever the validity of their claim to their portion of RUE's gas stored in Ukraine, they have been 'hung out to dry' [abandoned when in trouble] by their RUE partners.

One respected Ukrainian investigative journalist says: "Everything is leading to Firtash being caught by the Russian FSB security services and locked up: and all of his assets, which the Ukrainian SBU security services are defending, will be confiscated [to benefit] the Russian budget."

The raid on Naftohaz's offices last week was a blunder. Yushchenko's control over the SBU has now been weakened.

Wednesday, March 11, 2009

Putin takes Naftohaz's side in gas dispute

Last week the offices of Naftohaz Ukrainy were raided by Ukraine's security services [SBU]. They were accompanied by masked and armed Alpha special services troops - normally used only in anti-terrorist operations.

The raid was part of an evidence gathering operation in a dispute between RosUkrEnerho and Naftohaz over the ownership of 11 Bn.c.m. of natural gas stored in Ukraine. Observers consider the tug-of-war over this gas to be a battle between president Yushchenko and PM Yulia Tymoshenko.

The Swiss-registered gas middleman RUE is 50%-owned by Russia's Gazprom and 50%-owned by two Ukrainian businessmen - Firtash and Fursin.

Today President Putin of Russia said attempts by Ukraine's power structures to renege on the original gas agreement with RF discredit Ukraine and make it necessary to think about the alternative routes of gas supply into Europe.

Speaking of the raid he said: "It is clear that this discredits the [Ukrainian] state and makes it necessary to think about alternative ways of delivering gas to Europe...People in masks with automatic weapons attempted to remove contracts at the state energy company [offices]. This only discredits the country and makes people think."

Bearing in mind Putin's alleged closeness Gazprom, who are 50% owners of RUE, and his active participation in settling the last gas dispute between Russia and Ukraine, these statements knock the legs away from under president Yushchenko, the SBU, and in particular Firtash and Fursin. If the latter two feel cheated then they should take their partners in RUE, Gazprom, to court for cutting them out of the gas agreements, not Naftohaz.

Last Friday, on television [see previous blogs] president Yushchenko and his cronies had wailed about how the commandeering of private property, i.e. gas, by the state could be the first step on the slippery slope to fascism, drawing parallels with 1917, and the rise of Adolf Hitler in Germany. Was anyone listening to this nonsense?

Monday, March 09, 2009

Khoroshkovsky threatens to send special forces to storm KabMin

In a TV interview today, the deputy of the head of the security service of Ukraine [SBU], Valery Khoroshkovsky, said he does not exclude the possibility of special alpha force units appearing in the office of the first Vice-Premier of the Ukraine Olexander Turchynov [who is one of Yulia Tymoshenko's most trusted colleagues].

Khoroshkovsky claimed Turchynov is in possession of documents concerning the ownership 11 Bn CM of RosUkrEnerho gas that had been stored in Ukraine but which is currently being consumed by state gas company Naftohaz Ukrainy.

When speaking about the recent raid at Nafthaz Ukrainy offices by security service personnel and their failure to obtain these documents, he said: "If we do not obtain these documents, let no-one be surprised, if special "alpha" forces appear in the office of the first vice-premier".

"The immaculately groomed, bouffant-haired ever-smiling Khoroshkovsky [a.k.a Mentadent after a well-known European brand of toothpaste] gave a forthright, confident and rather threatening performance in Friday's TV show [see previous blog]. The president also stoutly defended RUE's ownership rights.

RUE has been at the root of the Yushchenko-Tymoshenko conflict since September 2005, when Yushchenko dismissed the-then PM Tymoshenko because the-then head of SBU Turchynov was treading on 'too many toes' in his investigation into corrupt gas business practices. Turchynov had claimed at that time that Yushchenko himself had ordered him to back off.

Khoroshkovsky, in his TV interview, also declared: "Everyone understands, and Tymoshenko knows this, that it is impossible to break me. A year ago she tried to break me, and finally sacked me [from the customs service]."

Outrageously, Khoroshkovsky is alleged to have "tight business links with RosUkrEnergo’s owners [Dmytro] Firtash and [Yuriy] Bojko, Party of Regions bankers," so there is a most blatant conflict of interest here. He is also one of Ukraine's wealthiest businessmen.

Because of the deeply entrenched positions of the participants in this saga, matters could turn ugly very quickly..someone is going to find themselves on their a***.

Sunday, March 08, 2009

Biassed debate on TV

Watch another marathon 'Svoboda na Interi' TV programme from Friday night, supposedly on the economic crisis, with president Yushchenko and his people in attendance, on-line here .

Only token PoR people present, and no-one to put the government's side of any argument at all...completely biassed.. lots of indignant, lofty protests about how the property rights of Dmytro Firtash and RUE are being cynically trampled upon by the government.

Watching millionaires and billionaires, who made 'wodges of wonga' [bundles of cash..British..informal] by dubious means arguing about these matters on TV will not cut much ice with millions of poorer Ukrainians living on the poverty line.

Meanwhile, those who claim to be directing their efforts into mitigating the effects of the global economic crisis on the common man are deemed to be 'populists'.

Thursday, March 05, 2009

Naftohaz and customs service officials receive awards

After the shakedown at Naftohaz yesterday [see yesterday's blog], the president's press secretary announced that the president fully supports the action of the SBU who have opened and are investigating a criminal case against leading persons in Naftohaz Ukrainy and the customs service. The head of state is personally controlling the progress of the investigation, she added.

Today Yulia Tymoshenko's official website reveals that several Naftohaz Ukrainy and State Customs Service employees have be awarded certificates of merit by the PM: "for their major contribution in guaranteeing the protection of national interests".

During the presentation ceremony she said: "We are granting these awards to those who gathered [sufficient] courage and did everything necessary for the benefit of the state, disregarding criminal pressure, repressions and criminal commands, and ensured Ukraine be provided with natural gas at a very moderate price, releasing it from bonded storage, and delivering this gas to the people. [and not to RUE..LEvko]"

The posting on Tymoshenko's website includes a photo of the award ceremony.

It is not unreasonable to conclude yesterday's SBU raid was pay-back for BYuT's assistance in ousting the president's Minister of Foreign Affairs, Volodymyr Ohryzko, in parliament earlier this week, and just a further round in the war of attrition between the president and PM.

According to Ukrainska Pravda, Monday's joint letter of intent to the IMF, signed by both president and PM Tymoshenko, concludes: "Today we confirm our readiness to act together decisively for the renewal of trust. The work ahead of us will not be easy, but we believe that joint actions will assist us to overcome the crisis. We call upon the opposition to join us."

The opposition? To act as referees in the dog fight? Don't drag them into this, for heaven's sake. What jokers the pres and pm are..

Wednesday, March 04, 2009

BYuT's reaction to Naftohaz shakedown

BYuT's official website have posted the following today, which I've loosely translated below:

Prime minister of Ukraine Yulia Tymoshenko, speaking to the journalists during a working visit to France today, said she was convinced, that the goings-on at Naftohaz, [more on this here] are solely about the removal of 11 Bn cubic meters of natural gas belonging to Ukraine by RosUkrEnerho.

"If anyone thinks that it is a fight between personalities, [I can tell them] it is [merely] a banal fight by a corrupt group for money which do not belonged to them - and no fight of personalities is taking place here", she said.

Tymoshenko is convinced that the SBU [security service of Ukraine] could not act so brutally or cynically without direct signals from the President of Ukraine. In her words, it is clear that this is a battle over [the ownership of] 11 Bn cubic meters of gas which today belong to Ukraine: "The shadowy RUE corporation wants to get hold of these 11Bn cubic metres, but the government will not permit this, and I, as PM, will give a painful slap across the wrists to those who have their eyes on state property."

p.s. An excellent write-up about what the Naftohaz shakedown is really about here

Political uncertainty grows with Ohryzko's dismissal

According to her official website, "Yulia Tymoshenko consider Volodymyr Ohryzko deserved to be dismissed from his position as Minister of Foreign Affairs."

"As a minister, Ohryzko didn't particularly suit me. This is a person who was unprofessional, a person who systematically concerned himself with provocations against the government," she declared.

"But at the same time, taking into account the attitude of the fraction, in which all 155 wanted to vote for Ohryzko's dismissal, we turned to the fraction [asking them] not to vote," she added.

In the event, 49 BYuT deputies "could not control their emotions" and voted with 174 PoR and 27 Communist deputies to 'dump' Ohryzko.

NUNS, who are BYuT's partners in the current parliamentary coalition, are mightily p*$$ed.

Is this another false start for a PR-BYuT coalition, or not?

Tuesday, March 03, 2009

Dima on Ukrainian gas probs

Russian president Dmitry [Dima] Medvedev is currently in Spain on an official visit - an interview with him was published in the Spanish media yesterday. Below are portions relating to Ukraine:

PILAR BONET: Ukraine and Russia waged another “gas war” in January, and many Western observers note heavy financial losses incurred by Russia, as well as certain loss of credibility. You wrote about it, too, and Gazprom mentioned it. I got first-hand information, although I cannot quote it from the closed source, that high-ranking Russian officials were opposed to cutting gas supplies to Ukraine. Next time when you face this problem, what will you do? In January, when you negotiate new prices, will you cut supplies too, or will you rather file a claim to the International Court of Arbitration in Stockholm, applicable to such cases, as you are perfectly aware of as a lawyer?

DMITRY MEDVEDEV: First, we did not cut supplies, we just faced a situation when Ukraine did not renew its agreements with us. We had no legal basis for supplying gas; therefore, we had to make tough decisions, which we did not want to make and would like to avoid in the future.

As a result of complicated, even dramatic discussions with our Ukrainian partners, we reached an agreement, signed on January 19, in accordance with which Ukraine is now purchasing Russian gas at market prices and is supposed to make payments on time. The next payment, which I guess is about 400million dollars, is due soon.

In case of non-payment, stricter provisions of this agreement will apply: Ukraine will be receiving further supplies on a pre-paid basis. While now we are supplying gas on credit, on trust, yet at market prices, next we will have to switch to pre-paid supplies. Naturally, these consequences will follow in case of the untimely payment by Ukraine. Of course, we hate turning back to the previous scenario, this is surely not our choice, but I can tell you frankly that we will have to act correspondingly if they refuse to pay.

Recently I met here with my colleague, Mr Barroso, who was accompanied by many European commissioners on his trip. I told him one simple thing: if we are to bring security to everybody, to European customers, and to guarantee a decent level of cooperation between us, let us help the Ukrainians. In fact, they are in dire straits now.

According to some analysts, the Ukrainian economy now is on the brink of collapse. If we see that they are unable to pay, let us make a financial pool and give them money. I believe this is an option for everybody. There is a system of European financial institutions, we may be involved in this too, and we are prepared to contribute some money in order to normalize supplies, but let us do this in a civilized manner. We came up with the proposal to set a consortium, that is, to buy some amounts of gas; this proposal is still valid, so let us do it if we see that Ukraine is unable to pay. However, the deadline has not expired yet, and I believe our Ukrainian partners are willing and able to resolve this issues.

As for the Russian officials you have mentioned, those who were against this strategy, tell me who they are, and they will be fired.

Meanwhile, Ukraine/Russia gas problems could flare up again in the next few days because of the non payment of gas bills mentioned by Medvedev.

p.s. The editor of the "Donetsk Mafia" book, Borys Penchuk has been sentenced, by a regional court in Donetsk, to an eight year 'stretch' in prison, and has been stripped of all of his assets. He had been charged with 'extortion' and 'falsly reporting the perpetration of a crime'.

His book is an anthology of articles, many gleaned from the internet, describing the circumstances surrounding the violent deaths of many dozens of eastern Ukraine's businessmen, and the rise to power of some of Ukraine's oligarchs who now control major portions of Ukraine's industrial and commercial sector.

Two of them, Rinat Akhmetov and Borys Kolesnikov, allegedly attended president Yushchenko's 55th birthday party at his retreat in the Carpathian mountains recently. Wonder what pressies they brought?