Analytical review of the week No. 115 of 09/05/2021.
\ANALYTICAL REVIEW OF THE MOST IMPORTANT DOMESTIC, FOREIGN POLITICAL AND ECONOMIC EVENTS OF THE WEEK
SUMMARY AND KEY TRENDS.
SUMMARY AND KEY TRENDS.
Summing up the results of the outgoing week, we note the following:
First, there is a continuing confrontation between the Office of the President and external players for control over the judicial system and the main assets of the country. As part of this trend, the Venice Commission published its conclusion on the draft law to reset the High Council of Justice, in which it insists that international experts should be given a decisive role in the process of selecting future members of the SCJ and checking the integrity of its current composition. In turn, the members of the committee for the selection of supervisory boards announced the termination of their work in Ukraine until "until there is clarity about the action plan for the reform of corporate governance." These actions are characterized simply: blackmailing the Ukrainian authorities by foreign “voters of the supervisory councils” and lobbying a model of judicial reform that is beneficial to the West.
Secondly, the NSDC's sudden interest in the topic of the validity of tariffs for utilities, as well as the structure of ownership of companies supplying natural gas to the population, is caused both by the government's desire to promote itself on the topic of tariffs that is painful for society, and by probing the ground for the redistribution of assets in the provision of services. gas supply.
Thirdly, the visit of US Secretary of State Anthony Blinken and his Deputy Victoria Nuland to Kiev this week was clearly intended to get acquainted with the political and economic situation in Ukraine on the ground in order to work out the most effective theses for future negotiations between Joe Biden and Vladimir Putin. At the same time, the visit of the State Department delegation to Kiev once again revealed a number of contradictions that exist between the American side and the current Ukrainian government. In particular, the Americans demand the speediest implementation of judicial reform according to their patterns, real, and not nominal, de-oligarchization, and the preservation of the influence of the West's proteges on the largest Ukrainian state corporations. The Ukrainian side, in turn, sabotages these demands and fulfills them "in its own way."
Fourthly, there has been a tendency for the fragmentation of the world economic space into pan-regions with their own payment systems, reserve currencies, etc. ... Economic fragmentation follows the military-political one and creates the preconditions for its new manifestations (Macron's statements that NATO has suffered a “brain death”, discussions on the creation of the EU armed forces, etc.). The collective West is increasingly split along the North America-EU line. The role of NATO and the dollar in world politics will gradually diminish.
Fifth, the raw material model of the Ukrainian economy allows owners of means of production in the metallurgical and agro-industrial sectors to continue to enrich themselves, mainly due to the positive situation in the global raw materials market (ore, grain), as evidenced by data from the latest national Forbes list. At the same time, Ukraine is becoming a hostage to its raw material economy model. The hryvnia exchange rate will gradually fall in the long term (as evidenced by the forecasts of the National Bank), due to the lack of growth in the production of products with high added value, the outflow of the able-bodied population abroad, as well as the decline in interest in Ukraine as a transit country for Russian gas after the commissioning of Nord Stream - 2 ”.
This week, the confrontation continued between the Office of the President and external players over control of the judiciary and the main assets of the country. As part of this trend, the Venice Commission published its conclusion on a bill to reset the Supreme The Office of Justice, in which he insists that international experts should be given a decisive role in the process of selecting future members of the SCJ and checking the integrity of the current composition. In turn, members of the committee for the selection of supervisory boards announced the termination of work in Ukraine until "until there is clarity about the action plan for the reform of corporate governance." These actions are characterized simply: blackmailing the Ukrainian authorities and lobbying a model of judicial reform that is beneficial to the West.
Also this week, the NSDC was interested in the structure of the owners of gas sales and energy companies. In this way, the President's Office decided to promote itself on the “tariff” topic, under the pretext of revising the increase in tariffs, a redistribution of assets in the field of public utilities will take place.
1. The NSDC became interested in the impact of the increase in utility tariffs on national economic security.
This week, Secretary of the National Security and Defense Council of Ukraine A. Danilov instructed Prime Minister D. Shmyhal to analyze and collect in a single material information on the structure of owners of energy and energy supply companies, operators of electricity distribution systems, as well as gas supply and gas sales companies. The NSDC asks for "history of the transfer of ownership of these companies to private ownership." D. Shmyhal was also instructed to prepare materials for the National Security and Defense Council on raising utility tariffs in Ukraine and improving state regulation in the gas, electricity and heat markets. This is due to the fact that in the near future the NSDC plans to consider "the issues of the deterioration of the economic situation in Ukraine due to the increase in utility tariffs."
Since January 1, 2021, almost all utility tariffs for the population have increased significantly in Ukraine. In this regard, in several areas, people came out to protests. Since January 18, the government has fixed the gas price at UAH 6.99. per cubic meter, and the regulator has reduced the maximum tariff for gas distribution. We also introduced annual gas supply contracts. Nevertheless, despite the large indebtedness of the population, the government simultaneously reduced access to subsidies.
Due to the low income of citizens, the increase in tariffs is an especially painful topic for the population of Ukraine and therefore seriously reduces the ratings of the authorities. From this point of view, the initiative to hold a meeting of the NSDC on tariffs is, first of all, PR. Probably, at Bankova it was considered that the demonstration of the visibility of a "strong hand" with the help of the NSDC has a positive effect on the rating of V. Zelensky and decided to play on the painful "tariff" topic in order to consolidate the result.
The increase in utility tariffs since 2014 was a government policy, since they include a "hidden tax", the funds from which go, among other things, to partially cover the budget deficit and repay IMF loans. Taking this into account, it is expected that in the future, tariffs for all types of utilities will continue to grow, regardless of what kind of “ebullient activity” the NSDC is deploying in this regard.
In the context of the requested materials on the ownership structure and the history of the transfer of ownership of companies providing utilities, as well as taking into account the practice of using such a tool as the NSDC this year, it can be assumed that the purpose of the upcoming meeting will not be making decisions in the interests of the population. but a banal redistribution of assets in the provision of gas supply services. The National Security Council was interested in the structure of the owners of gas sales and energy companies. After the imposition of sanctions against Viktor Medvedchuk and a number of companies, it can be expected that Dmitry Firtash, who is a monopoly on the Ukrainian gas market, may fall under the NSDC sanctions next, after which his assets will be redistributed in favor of financial and industrial groups close to the current government.
2. Urgent opinion of the Venice Commission on the bill of V. Zelensky on the High Council of Justice.
On May 5, the Venice Commission published its conclusion on Vladimir Zelensky's bill No. 5068 on resetting the High Council of Justice (SCJ) and checking the integrity of SCJ members. The Commission notes that international experts should be given a decisive role in the process of selecting future members of the SCJ and checking the integrity of its current composition. The Venice Commission stressed that the law should set out the criteria for professional ethics. In addition, the mandate of international experts should be valid for 6 years. The commission provided 11 recommendations, in particular, it is proposed to create an Ethical Council, whose members will establish whether a candidate for the position of a member of the SCJ meets the criteria of professional ethics.
The Ethics Council will include 3 people from among judges or retired judges, determined by the Council of Judges of Ukraine, and 3 people who will be elected by international organizations. In conclusion, it is recommended that the Ethics Council provide conclusions on the inconsistency of the position in NAPC and NABU for further action. In general terms, the Venice Commission "regrets the lack of a holistic approach to the reform of the judicial system in Ukraine."
Recall that in February-March of this year, the SCJ became one of the fields of confrontation between Western partners and the Ukrainian government for influence on the country's judicial system. On March 9-11, the XVIII Congress of the Council of Judges of Ukraine took place, which appoints four members of the SCJ [https://hromadske.ua/ru/posts/suezd-sudej-naznachil-treh-chlenov-vsp-mez... -delat-etogo-do-sudebnoj-reformy]. While the international community called for the postponement of appointments to the High Council of Justice and the Constitutional Court pending judicial reform.
It is obvious that the position of the Venice Commission on this issue is lobbying precisely for the Western version of judicial reform, according to which external players, under the guise of “transparent processes for the selection of judges,” expect to get direct access to the selection of judges and control over their work. The international community, in fact, is trying to make the Ukrainian courts independent from the authorities, but dependent on themselves. In turn, the Office of the President is trying to minimize external influence and establish its control over the judicial system in the country.
3. Experts of the committee of appointments to supervisory councils stop working in Ukraine.
This week, members of the committee for the selection of supervisory boards in a letter to Prime Minister Denis Shmygal, Minister of Economy Igor Petrashko and Minister of Finance Sergei Marchenko announced the termination of work in Ukraine. The letter states that the members of the Nominating Committee will cease their participation until there is clarity about an action plan for corporate governance reform and a clear commitment by the government, as a shareholder in state-owned enterprises, to respect and rely on corporate governance institutions.
It is reported that for the functioning of management mechanisms at state enterprises, it is necessary to complement the independence of supervisory boards with a transparent and stable accountability mechanism [https://www.epravda.com.ua/rus/news/2021/05/2/673572/].
As we wrote earlier, on April 28, the government dismissed Andriy Kobolev from the post of head of the board of NJSC Naftogaz of Ukraine and appointed Yuriy Vitrenko to this position. On April 30, the Supervisory Board of NJSC Naftogaz of Ukraine announced its full resignation [https://rus.lb.ua/economics/2021/04/30/483762_nablyudatelniy_sovet_nafto.... In this regard, the European Union, the European Bank for Reconstruction and Development, the European Investment Bank, the World Bank and the International Finance Corporation have expressed their concerns [https://www.epravda.com.ua/rus/news/2021/04/30/ 673553 /]. And the G7 ambassadors warned against political interference in the management of Naftogaz [https://www.eurointegration.com.ua/news/2021/04/29/7122706/].
Also, last week the government considered changes to the decree on the functioning of supervisory councils at state-owned companies. These changes are proposed to strengthen the role of the head of the board and reduce the role of the supervisory boards.
This systemic approach may mean a national turn in the management of large state-owned companies by V. Zelensky. The office of the president is redistributing the management of state corporations, and is trying to minimize the influence of external players in this area. In turn, the United States wants to reserve the right to control the processes in state monopolies in Ukraine through supervisory councils. During the visit of US Secretary of State Anthony Blinken to Ukraine, the need for corporate governance reform was announced [https://strana.ua/articles/analysis/331965-chto-oznachaet-vizit-i-protok... analiz-politolohov.html].
It is likely that further discussion on this issue with Western partners will continue. It is possible that the new composition of the supervisory boards will not differ much from the old one.
4. Sociology. Presidential and parliamentary ratings.
Two case studies were published this week from the Razumkov Center and Kievsky International Institute of Sociology (KIIS). According to both studies, representatives of the government team lead the parliamentary and presidential ratings.
According to the results of the KIIS study: V. Zelensky continues to lead in the presidential rating - he is supported by 31.4% of respondents. In comparison with the poll conducted by KIIS at the end of February 2021, the president's rating increased by 6% (then lo 25.3%). This is followed by:
P. Poroshenko - 18.1%, since the end of February the rating has grown by 3.4%.
Yulia Tymoshenko - 11.9%, the rating has not changed.
I. Smeshko - 10.4% (+ 2%).
Yuri Boyko - 9.6% (-5%).
The leader in the parliamentary rating is "Servant of the People" - 21.3%. In comparison with the survey conducted by KIIS at the end of February 2021, the rating has not changed.
"European Solidarity" - 17.7%, since the end of February the rating has increased by 2.7%.
"HLE" - 12.2%, since the end of February the rating has dropped by almost 6%.
"Fatherland" - 10.2%, decreased by 4%.
At the same time, in the study to compare the dynamics of ratings, KIIS does not refer to its latest research conducted at the end of February 2021 [https://www.kiis.com.ua/?lang=ukr&cat=reports&id=1016&page=1], but takes an earlier version - early February [https://www.kiis.com.ua/?lang=ukr&cat=reports&id=1007&page=3]. Probably, this was done with the aim of demonstrating a more striking growth dynamics of the government's ratings. In dynamics, we made a comparison with the latest research by KIIS, according to which the Servant of the People rating no longer demonstrates growth, in contrast to the study at the beginning of February.
The research of the Razumkov Center shows that despite the leading positions, both the party and presidential ratings of the authorities are no longer showing growth.
V. Zelensky is in the lead in the presidential rating. 28.3% of respondents are ready to vote for him. Compared to the survey conducted in early March 2021 [https://razumkov.org.ua/napriamky/sotsiologichni-doslidzhennia/otsinka-s... oriientatsii-gromadian-berezen-2021r], the president's rating did not change significantly (it was - 27.4%; + 1.9%).
P. Poroshenko - 18.1% (-1.6% did not change significantly).
Yuri Boyko -14.5% (in March 17%; -2.5%).
Y. Tymoshenko - 10.5% (did not change significantly).
In case of electoral rivalry in the second round:
• in a pair V. Zelensky and P. Poroshenko wins V. Zelensky with a score of 60.5% and 39.5%, respectively.
• in a pair V. Zelensky and Y. Boyko wins V. Zelensky with a score of 70.9% and 29.1%, respectively.
The leader in the party rating is "Servant of the People" - 28.2% of respondents, compared to the poll conducted in early March (it was 26.5%), the party's rating does not show significant growth (+ 1.8% - within the margin of error).
"European Solidarity" -18.3% (in March 20.1%; -1.8%).
“Opposition Platform - For Life” - 15% (18% in March; -3%).
VO "Batkivshchyna" - 10.8%, (in March 9.4%; + 1.4%).
According to the results of the poll, it can be seen that the growth of the ratings of the power team has almost stopped. Since the beginning of March, the growth of the ratings of both the president and the party is within the margin of error - up to 2%. Due to the loss of information resources, the ratings of Yu. Boyko and HLP show a significant decrease.
By concentrating control over the main information flows and continuing to demonstrate a "strong hand" with the help of the NSDC, V. Zelensky manages to maintain a leading position in the rating. But if the authorities do not begin to implement the basic needs of society, the rating may soon sink. For example, in the fall, when the issue of high tariffs is updated again.
The visit of US Secretary of State Anthony Blinken and his Deputy Victoria Nuland to Kiev this week was clearly intended to get acquainted with the political and economic situation in Ukraine on the spot in order to work out the most effective theses for future negotiations between Joe Biden and Vladimir Putin. At the same time, the visit of the State Department delegation to Kiev once again revealed a number of contradictions that exist between the American side and the current Ukrainian government. In particular, the Americans demand the speediest implementation of judicial reform according to their patterns, real, and not nominal, de-oligarchization, and the preservation of the influence of the West's proteges on the largest Ukrainian state corporations. The Ukrainian side, in turn, is sabotaging all this.
1. The visit of the US Secretary of State Anthony Blinken and his Deputy Victoria Nuland to Ukraine.
On May 6, US Secretary of State Anthony Blinken and his Deputy Victoria Nuland visited Kiev. American officials held meetings with Ukrainian President Volodymyr Zelensky, heads of parliamentary factions, as well as Prime Minister Denis Shmygal [https://strana.ua/news/331916-vstrecha-blinkena-i-zelenskoho-nachalas-v-... ].
The aforementioned visit of the United States Secretary of State and his deputy to Kiev was characterized by tight deadlines (about half of the working day was allocated for meetings), a high pace, and a desire to reach the maximum circle of Ukrainian officials (this is why there were meetings not only with the president, but also with the prime minister and also by the heads of parliamentary factions).
The official results of Blinken's and Nuland's meetings with the Ukrainian leadership of various levels can be briefly described as follows:
First, the United States insists on the early implementation of judicial reform in Ukraine according to the Western scenario, supported by the G7 ambassadors [https://strana.ua/news/331935-zakonchilsja-sovmestnyj-brifinh-vladimira-zelenskoho-i-entoni-blinkena.html].
Secondly, another important requirement of the Americans is de-oligarchization [https://strana.ua/news/331931-blinken-rasskazal-o-meshajushchikh-ukraine.... Washington insists on the maximum possible reduction of the influence of the oligarchs on the domestic and foreign policy of Ukraine. The overseas partners in Kiev prefer to fulfill this requirement "selectively", and, as in the case of the judicial reform, reinterpreting it in their own way. In particular, after clearing out the people of Igor Kolomoisky a few months ago, the largest state-owned company "Centerenergo '' was recently appointed there new management cadres associated with Rinat Akhmetov.
Thirdly, the issue of managing the largest state corporations was also raised during the visit of Blinken and Nuland to Kiev. Moreover, we are talking not only about Naftogaz [https://strana.ua/news/331935-zakonchilsja-sovmestnyj-brifinh-vladimira-..., which recently changed the head and members of the supervisory board ...
In Ukraine, at the moment, a reform of the management of large state corporations is underway, the key goal of which is to replace people affiliated with the West in leadership positions and on supervisory boards with people affiliated with the Office of the President and the oligarch Rinat Akhmetov. In addition to Naftogaz, similar processes are taking place at Ukrzaliznytsia and other large state-owned companies.
Fourthly, the Americans do not care about image issues that are important for the Ukrainian authorities. This concerns the issue of granting Ukraine MAP on NATO membership, the "Crimean Platform", Biden's invitation to Kiev on Independence Day [https://strana.ua/news/331930-zelenskij-prihlasil-bajdena-na-30-letie-dnja- nezavisimosti-ukrainy.html], Zelensky's statements on the need to involve the United States in the Normandy format, etc.
Regarding all this, during the last visit, American officials gave an unequivocal answer: they are not interested. In particular, information that at a meeting with representatives of parliamentary factions Victoria Nuland advised “not to pedal the topic of joining NATO” even leaked to the Ukrainian press [https://strana.ua/news/331897-poroshenko-rasskazal-chto- blinken-uzhe-vstretilsja-s-deputatami-rady.html].
As for the Normandy format, the United States' reluctance to join it is explained quite simply: formal participation in one or another negotiation format presupposes at least partial sharing of responsibility for their outcome. Today, the United States can slow down the negotiation process by using its influence on Ukraine, and at the same time does not bear absolutely any responsibility either for the fact that the negotiations are at an impasse, or for their outcome, if it ever comes.
Fifthly, the only proposal of the Ukrainian side that may interest the United States is a proposal prepared in the President's Office to sign a kind of "deepened bilateral alliance".
True, Kiev and Washington see him differently. The Ukrainian authorities expect that this document will imply some kind of allied obligations on the part of the United States in the military-political sphere, which will help put pressure on Russia and strengthen the negotiating position of Kiev, while the American side considers such a document primarily as a provision the right to be an exclusive and uncontested supplier of weapons for the Ukrainian army and power structures. Moreover, not on a grant basis, which is constantly asked for in Kiev, but on market conditions.
Thus, the main results of the visit of Anthony Blinken and Victoria Nuland to Kiev for US-Ukrainian relations are reduced to the above five points.
As we wrote above, the visit of Blinken and Nuland to Kiev was characterized by a series of short meetings with the widest possible circle of persons involved in political decision-making, namely: heads of parliamentary factions, the head of the Verkhovna Rada, the prime minister, the president, and representatives of the loyal US civil society.
Such a program of the visit is the best fit in order to learn "firsthand" as much information as possible about the political and economic situation in the country, which may be needed before the talks between US President Joe Biden and Russian President Vladimir Putin.
There is no doubt that in the course of these negotiations, Ukraine will also be discussed, as one of the most important theaters of the US-Russian confrontation in Eastern Europe. In this regard, the Americans may need information about the current state of affairs in Ukraine to understand what tactics to choose regarding it in negotiations with Putin.
The fact that it was precisely obtaining objective information about the political and economic situation in Ukraine that was the purpose of the visit of the American delegation to Kiev is also indicated by the fact that nothing fundamentally new about the interests of the United States or about American-Ukrainian relations and their individual aspects during it is not about judged and voiced was not. All aspects of American interests in Ukraine, described in the first section of this material, were known earlier, for several months. They were brought to the attention of the Ukrainian authorities several times through various channels, from joint statements by ambassadors of the G7 countries to the activities of pro-American NGOs and lobbyists in the country. Consequently, the visit of Blinken and Nuland to Kiev in order to voice them once again was completely unnecessary. This could make sense if the Americans were going to issue a tough ultimatum to the Ukrainian side to fulfill their demands. However, according to our information, nothing of the kind happened.
The version that the visit of Blinken and Nuland was an "inspection trip" on the eve of important negotiations is also confirmed by the fact that a few days earlier, on May 3, the 73rd Naval Special Forces Center of the Armed Forces of Ukraine named after Koshevoy Ataman Anton Golovaty was visited by the commander of the US Special Operations Forces in Europe, General Major David Tabor. The official purpose of the visit of the American general is called "to assess the level of military cooperation, training and interaction between the naval units of the special operations forces of Ukraine and the United States." However, his true goal was probably to assess the state of the Ukrainian armed forces using the example of their most combat-ready units.
By the way, Blinken's statements at a joint briefing with Zelensky that “the Russian threat to Ukraine remains strong” is nothing more than a reminder that the US-Russian confrontation (the new “Cold War”) is only gaining momentum. Ukrainian public observers saw in these statements only "ritual" words of support, although in fact they are much deeper and can determine the role of Ukraine as the main American irritant "close to Russia" for years, or even decades to come.
Thus, a very clear picture emerges: on the eve of Biden's talks with Putin, the Americans want to thoroughly study the state of affairs in Ukraine in the military, political and economic spheres.
2. Statements of Angela Merkel at the Congress "For a Future-Oriented Transatlantic Partnership".
German Chancellor Angela Merkel said this week, speaking at the Congress “For a Future-Oriented Transatlantic Partnership,” that the changing distribution of power in the world was influenced, among other things, by Russia's behavior, as well as the economic and political strengthening of China.
Merkel called Russia's behavior "partly very aggressive" and noted that the United States remains Europe's most important partner. Quote:
"Only together with the United States can we effectively participate in globalization, we are much stronger if we share common positions [https://aif.ru/politics/world/merkel_nazvala_povedenie_rf_odnoy_iz_prichin_izmeneniya_balansa_sil_v_mire]".
Among other challenges facing transatlantic partners, Merkel named the coronavirus pandemic and climate protection issues.
In the above news, it is noteworthy that the German Chancellor, in fact, is in solidarity with the American rhetoric that China and Russia are "the main threats to democracy and freedom in the world." In a situation where a new Cold War flares up between Washington, on the one hand, and Beijing and Moscow, on the other, such statements by the German Chancellor are extremely revealing. In fact, they mean that in spite of Nord Stream 2 and other economic interests of Germany in cooperation with Russia, Berlin is solidifying in geopolitical confrontation with the United States.
Thus, Germany renounces the role of the "assembly center" of the European "pole" of international politics, to one degree or another, independent of the United States. In this regard, it can be predicted that the further the more, the political leadership within the EU will pass to France.
3. Protests in Colombia over rejection of the tax reform, which increases taxes.
Over the past two weeks, protests have been taking place in Colombia against the government-initiated tax reform, the essence of which is to raise taxes for ordinary citizens [https://edition.cnn.com/2021/05/05/americas/colombia-tax-reform- protests-analysis-intl / index.html].
At least 31 protesters died, 1220 were injured and 87 went missing during the week of protests [https://rg.ru/2021/05/06/bolee-30-chelovek-pogibli-za-nedeliu-protestov-... .html]. This is reported in a report by the Colombian Institute for Development and Peace Studies, which includes data from human rights organizations and the office of the Ombudsman.
Protests in Colombia against tax increases have been going on for the second week, despite President Ivan Duque's refusal to expand the application of VAT on gasoline, utilities and the income tax base. In addition to canceling the tax reform, workers and students are demanding a review of sanitary emergencies and health care reform, the disbandment of riot police, and the demilitarization of cities and the punishment of those responsible for killing protesters.
American press covers protest in Colombia, it is said in an extremely negative way, which is not surprising given the pro-American ruling regime in the country. It is noteworthy that CNN directly writes that “poor countries, such as Colombia, in the conditions of the coronavirus crisis, should raise taxes, since they do not have the opportunity to print“ helicopter money ”, as the US and the EU do [https: // edition. cnn.com/2021/05/05/americas/colombia-tax-reform-protests-analysis-intl/index.html] ".
Thus, in times of crisis, liberal economic thought offers developing countries nothing else but higher taxes and further impoverishment of the already poor population.
The situation in Colombia, in this regard, is indicative, as it can become a prototype of similar protests in other countries of the world (not only in Latin America. The more the world's population suffers from the economic crisis provoked by the pandemic, the more often such protests will occur.
4. Britain and France quarreled over fishing near the island in the English Channel.
On May 6, Britain sent two patrol ships to Jersey in the English Channel after France threatened to cut off power there [https://edition.cnn.com/2021/05/06/uk/britain-france-war-ships -jersey-cmd-intl-gbr / index.html]. Paris is unhappy with the change in fishing conditions in the region after Brexit - the island's authorities have significantly reduced the number of fishing permits unilaterally. The last Anglo-French military conflict took place in the 1940s.
As the British government said in a statement:
“The Prime Minister spoke with Jersey Chief Minister John Le Fondre and Ian Gorst, Head of the Island's External Relations Department, about the prospect of the blockade [of the island's capital] Saint Helier. The Prime Minister and Chief Minister pointed to the urgent need to ease tensions and establish dialogue [https://www.gov.uk/government/news/pm-call-with-chief-minister-of-jersey... fondre-and-minister-of-external-affairs-ian-gorst-5-may-2021] ".
Any blockade on Jersey is illegal, Johnson said. The ships are sent to the region to monitor the situation.
French Minister of Maritime Affairs Annique Girardin said earlier that the supply of electricity to Jersey via the submarine cable could be stopped after the refusal of the island authorities to issue fishing permits to French fishermen. New rules for fishing in the Channel Islands were introduced behind the scenes, the minister was indignant, without any explanation.
After Britain left the European Union, only 41 French trawlers were licensed.
Jersey authorities explained that post-Brexit permits are issued in accordance with the EU-UK trade and cooperation agreement. According to the document, a beacon must be installed on all ships, which would confirm that this trawler has already fished near the islands from 2012 to 2016. Typically, such a device is installed on large fishing vessels, rather than small trawlers, which now have no access to Jersey waters.
The described news demonstrates that the process of Britain's economic separation from the European Union after Brexit is far from smooth. Old disputes about fishing, and more, are reviving. In the future, we should expect new incidents of this kind.
The raw material model of the Ukrainian economy allows owners of means of production in the metallurgical and agro-industrial areas to continue to enrich themselves, mainly due to the positive situation in the global raw materials market (ore, grain), as evidenced by the data of the fresh national Forbes list. At the same time, Ukraine is becoming a hostage to its raw material economy model.
The hryvnia exchange rate will gradually fall in the long term, due to the lack of growth in production of products with high added value, the outflow of the working-age population abroad, as well as an even greater decline in interest in Ukraine as a transit country for Russian gas after the commissioning of Nord Stream 2.
At the same time, there is a tendency in the world for the fragmentation of the global economic space into pan-regions with their own payment systems, reserve currencies, and so on. Economic fragmentation follows military-political fragmentation and creates preconditions for its new manifestations (Macron's statements that NATO has suffered a “brain death”, discussions on the creation of the EU armed forces, and so on). The collective West is increasingly split along the North America-EU line. The role of NATO and the dollar in world politics will gradually diminish.
1. The Ukrainian Forbes list has been published.
Forbes Ukraine magazine published a list of the 100 richest people in Ukraine in its May 2021 issue [Forbes published an annual ranking of the 100 richest Ukrainians - Ukrainian news - LIGA.net]. According to Forbes, the assets of the 100 richest Ukrainians grew by 42% over the year.
Among them: R. Akhmetova - 2.7 times - up to 7.6 billion dollars, V. Pinchuk - 1.9 times, Zhevago - more than 2 times, Kolomoisky and Bogolyubov for two + 1.2 billion dollars , Geregi + 400 million dollars, P. Poroshenko + 200 million US dollars [https://www.epravda.com.ua/news/2021/05/6/673628/].
The richest representatives of the national big capital played into the hands of the growth in quotations of key export goods - oil, steel, wheat and corn.
In the spring of 2021, the rise in commodity prices only accelerated, creating a good reserve for increasing the wealth of the participants in the national hundred in 2022. All Top 3 richest Ukrainian oligarchs are employed in metallurgy - Akhmetov, Pinchuk, and Zhevago. The structure of Kolomoisky's enterprises includes Stakhanovsky, Zaporozhye and Nikopol ferroalloy plants. Alexander and Galina Geregi, in addition to owning the Epicenter hypermarket chain, are also employed in the agro-industrial complex like Yuri Kosyuk. Vadim Novinsky and Alexander Yaroslavsky are also employed in metallurgy.
Thus, all the Top 10 richest citizens of Ukraine by the end of 2020 are employed either in metallurgy or in the agro-industrial complex - the two main export directions of the Ukrainian economy.
It is also worth noting that the first number of the Ukrainian Forbes list, Rinat Akhmetov, was helped to increase his fortune 2.7 times in a year by the alliance with the President's Office, with the help of which he was able to redistribute control over a number of profitable assets in his favor, as well as to ensure himself the maximum loyalty of the state apparatus.
2. The National Bank has prepared two scenarios for the development of the Ukrainian economy until 2023 inclusive. What exchange rate of the hryvnia is predicted by the NBU?
This week, from its own sources in the National Bank of Ukraine, the "Strana" edition obtained and published an internal decision of the NBU No. 177-rsh regarding macroeconomic forecasts for Ukraine for 2021-2023 [The dollar rose in price due to vaccine purchases (strana.ua)] …
The NBU has developed a baseline and pessimistic forecast. Even according to the basic (optimistic) forecast, the hryvnia exchange rate is projected at 29.2 hryvnia per dollar in 2022 and 29.1 in 2023. According to the pessimistic forecast, the hryvnia could reach the level of 35.4 hryvnia per dollar in 2022 and 38.1 in 2023.
These forecasts of the NBU for the hryvnia exchange rate are developed as a result of “testing” market conditions in 2021-2022, as prescribed by the Basel Committee on Banking Supervision. Individual banks are also tested, and based on the test results, the NBU decides whether these banks need additional capitalization.
In general, the fall in the exchange rate of the national currency is a natural consequence of the deterioration of the economic situation due to the pandemic and a number of other factors.
3. European banks intend to launch a payment system - a competitor to Visa and MasterCard.
This week, it became known that as part of the European Payments Initiative, more than 30 banks are working on the launch of a competitor of payment systems Visa and MasterCard, PayPal and Apple. The head of the European Payments Initiative (EPI) Joachim Schmalz is concerned about the oligopoly of American payment systems PayPal, Mastercard, Visa, Google and Apple. Major European banks Deutsche Bank, BNP Paribas, ING, UniCredit and Santander, as well as the European Commission and the ECB also support the initiative. The new payment system may appear as early as 2022.
Unlike the EU, China and Russia have long established their own payment systems UnionPay and Mir, respectively. Moreover, the head of the Russian Foreign Ministry Sergei Lavrov said in March 2021 that the Russian Federation and the PRC need to reduce the use of international (in the context of the statement - Western) payment systems [Lavrov considered it necessary for Russia to move away from the use of the dollar (interfax.ru)].
The EU's decision to develop its own payment system once again reveals the difference in economic interests between Europe and the United States. It is also worth noting the different attitudes of the EU and the United States towards cooperation with Iran, within the framework of which the European Union bypasses US sanctions by trading with Tehran.
Unlike the idea of creating a European common army, the idea of creating a payment system has a much better chance of being realized, and, in the long term, may contribute to the partial or complete subjectivization of the European Union in the international arena and its exit from the zone of exclusive political influence of the United States.
The world continues to divide into pan-regions with its own payment systems, energy complexes ("Nord Stream - 2"), closed Internet spaces, etc. etc. Globalization is coming to an end before our eyes.
4. Losses of Ukrtransgaz for the 1st quarter of 2021.
Ukrtransgaz received a loss in the first quarter despite an increase in income [Ukrtransgaz in the first quarter received a loss despite an increase in income | Economic truth (epravda.com.ua)].
In the first quarter of 2021, the company received a net income of UAH 1.3 billion, but ended the period with a net loss of UAH 30 million. UTG's income exceeded the income of the corresponding period last year by 23%. At the same time, the company was unable to cross the break-even level and received UAH 30 million. net loss. For comparison, in the first quarter last year the company received a loss of UAH 16.3 billion. "The main income of Ukrtransgaz from the implementation of the key activity - storage of natural gas. Net income in this area in the first quarter of 2021 amounted to UAH 1.1 billion, which is 9% higher than last year. At the end of 2020, the company received a net loss of UAH 2.6 billion. against UAH 23.6 billion. in 2019. Naftogaz Group in 2020 received a loss of 19 billion hryvnia as a result of low demand and prices for gas, in 2019 the company received 2.6 billion hryvnia.
The main reasons for the unprofitableness of Ukrtransgaz are low demand for natural gas storage services. In turn, the drop in demand occurred both due to a drop in industrial production in Ukraine itself and in the light of the completion of the construction of Nord Stream 2, which will significantly diversify gas supplies to Europe to the detriment of the Ukrainian GTS. The government's plans to fill the Brotherhood gas pipeline with hydrogen instead of natural gas indicate that Ukrtransgaz will not be able to become a profitable enterprise in the future, given the lack of prerequisites for the growth of industrial production in Ukraine.