Analytical review of the week No. 125 of 18/07/2021.

ANALYTICAL REVIEW OF THE MOST IMPORTANT DOMESTIC, FOREIGN POLITICAL AND ECONOMIC EVENTS OF THE WEEK

12.07.- 18.07.2021

CONTENT:

SUMMARY AND KEY TRENDS.

INTERNAL POLICY.

1. The Verkhovna Rada dismissed the Minister of Internal Affairs Arsen Avakov.

2. The Supreme Court Overturned V. Zelensky's decree on the dismissal of the Head of the Constitutional Court of Ukraine Alexander Tupitsky.

3. The Verkhovna Rada adopted the draft law “On the Supreme Council of Justice”.

4. The Verkhovna Rada supported the presidential recommendations to the bill No. 3711-d and left the decisive vote in the selection of VKKS for international experts.

5. The Constitutional Court recognized the law "On ensuring the functioning of the Ukrainian language as the state language" constitutional.

FOREIGN POLICY.

1. Vladimir Zelensky's visit to Berlin.

2. Article by Vladimir Putin "On the unity of the Russian and Ukrainian peoples."

3. The situation in Afghanistan.

4. Protests in Cuba.

ECONOMY.

1. The Rada adopted a law on the restructuring of "gas" debts on the market (bill No. 3508-d).

2. Oschadbank and the Fund for Guaranteeing Deposits of Individuals will cooperate for the sake of joining the bank to the system.

3. G7 Ambassadors welcomed the adoption of the law on reforming Ukroboronprom

4. Farmers will be able to receive loans under state guarantees for the purchase of land.

5. The OilRoint Agency together with the Federation of Oil and Gas Industry Employers held a round table on the signing of hydrocarbon production sharing agreements (PSA).

6. The IMF plans to issue $ 650 billion to member countries of the fund to overcome the crisis caused by the coronavirus epidemic.

SUMMARY AND KEY TRENDS.

Summing up the results of the outgoing week, we note that:

First, this week the course of strengthening the presidential vertical of power continued. In particular, the parliament dismissed the head of the Ministry of Internal Affairs Arsen Avakov, due to which the prospects of V. Zelensky's influence on the power bloc have significantly expanded.

Secondly, within the framework of the trend towards confrontation for control over the country's judicial system, the struggle between the Office of the President, Western partners and the judiciary has intensified. The Verkhovna Rada adopted a bill on the purification of the High Council of Justice, which introduces the council of international experts. Also, the parliament, according to the president's demand, left a decisive vote in the selection of VKKS for international experts. In turn, the judiciary actively resists both external influence and the president in this matter. The Supreme Court overturned V. Zelensky's decree on the dismissal of the head of the KSU Alexander Tupitsky. In the future, this can undermine the entire management model built by the president, in particular, a number of decisions regarding the KSU and decisions of the NSDC. The unpleasant for the president's defeat from the Supreme Court according to A. Tupitsky is informationally "interrupted" by the decision of the Constitutional Court in favor of the OP on the language law.

Thirdly, following the results of Vladimir Zelensky's visit to Berlin, it became clear that his tactics of "tough rhetoric" in relations with Germany did not work. Moreover, it spoils these relations, pushing the German leadership to statements that are more and more at odds with the position of Kiev. So, following a meeting with the Ukrainian president, Angela Merkel announced the need to implement the Steinmeier formula in Ukrainian legislation and that she intends to discuss Ukrainian interests with American President Joe Biden without the participation of Ukraine itself.

Fifth, a tendency towards renewed interest of the Russian authorities in the Ukrainian topic has become apparent. It is eloquently evidenced by Vladimir Putin's article on the unity of the Russian and Ukrainian peoples, in which, in addition to an excursion into the Russian vision of history, he draws “red lines” for the West and the Ukrainian authorities related to the “military development of the territory of Ukraine” and says that "Will not allow Ukraine to turn into anti-Russia."

Sixth, the hasty transition to market relations in the Ukrainian gas market threatens to disrupt the heating season of 2021/22 due to the 100 billion debt of gas enterprises to NJSC Naftogaz. To prevent disruption of the heating season, the parliament adopted a law on the restructuring of "gas" debts.

Seventh, the government will try to additionally fill the budget with cash from citizens, who will presumably be more willing to put money in Oschadbank on deposits after the latter is included in the system of the Deposit Guarantee Fund for individuals and increasing the deposit guarantee amount to 600 thousand hryvnia by 2023 (for the presidential elections 2024 and Zelensky's desire to be re-elected for a second term).

Eighth, corporatization of Ukroboronprom ultimately means “optimization” of costs, namely, dismissal of employees and sale of property despite the conflict in the East, under the guise of OECD corporate governance standards, which boil down to the fact that the state is a priori an ineffective property owner.

INTERNAL POLICY.

Briefly.

This week the course of strengthening the presidential vertical of power continued. In particular, the parliament dismissed the head of the Ministry of Internal Affairs Arsen Avakov, due to which the prospects have significantly expanded V. Zelensky's influence on the power block.

As part of the trend towards confrontation over control of the country's judicial system, the struggle between the Office of the President, Western partners and the judiciary has intensified. The Verkhovna Rada adopted a bill on the purification of the High Council of Justice, which introduces the council of international experts. Also, the parliament, according to the president's demand, left a decisive vote in the selection of VKKS for international experts. In turn, the judiciary actively resists both external influence and the president in this matter. The Supreme Court overturned V. Zelensky's decree on the dismissal of the head of the KSU Alexander Tupitsky. In the future, this can undermine the entire management model built by the president, in particular, a number of decisions regarding the KSU and decisions of the NSDC. The unpleasant for the president's defeat from the Supreme Court according to A. Tupitsky is informationally "interrupted" by the decision of the Constitutional Court in favor of the OP on the language law.

1. The Verkhovna Rada dismissed the Minister of Internal Affairs Arsen Avakov.

On July 15, the Verkhovna Rada considered and accepted the resignation of the Minister of Internal Affairs Arsen Avakov. For the dismissal of A. Avakov, 291 people's deputies voted. Minister of Internal Affairs Arsen Avakov wrote a letter of dismissal on the eve of Tuesday, July 13, on the same day, Vladimir Zelensky, at a meeting of the Servant of the People faction, proposed a candidate for the post of Minister of Internal Affairs - People's Deputy Denis Monastyrsky. Subsequently, D. Monastyrsky agreed to the president's proposal to head the Ministry of Internal Affairs. And already on Friday, July 16, the Verkhovna Rada voted for his appointment as minister.

D. Monastyrsky is considered a man, Deputy Minister Anton Gerashchenko. And his appointment should not cause complications with A. Avakov's group, which hopes to influence the work of the ministry after his departure. But to a greater extent D. Monastyrskiy is now guided by Bankova.

The main initiator of the resignation of the head of the Ministry of Internal Affairs is considered the head of the President's Office A. Yermak. The figure of A. Avakov did not suit the OP for a long time. For all his demonstrative loyalty, he was seen as too independent a figure. But the resignation of the head of the Ministry of Internal Affairs was postponed, as there were fears that without A. Avakov it would not be possible to maintain control over street protests and, in particular, radicals who periodically create crises for Bankova. How the new Interior Minister D. Monastyrsky will behave in such cases is not yet clear. A. Avakov's main trump card is Control over the Ministry of Internal Affairs and the National Corps.

It is not excluded that the new administration in the United States could have insisted on A. Avakov's resignation. In turn, the OP painfully perceived the fact that A. Avakov was one of the first high-ranking officials, with whom the US Deputy Assistant Secretary of State George Kent, who had been appointed Charge d'Affaires of the United States in Ukraine, publicly met. As a result, the resignation did take place, and the main decisions will now be made at Bankova.

It is expected that A. Avakov's influence in the country will remain quite serious for the time being. Most of the power structures have been infiltrated by his people, and they will probably change over time. A. Avakov has enormous political influence and compromising evidence on most politicians. He also built a serious lobby in parliament, which includes part of the For the Future group and some MPs from the Trust. The head of the Ministry of Internal Affairs also has supporters in the Servant of the People, there are connections with Batkivshchyna.

Since A. Avakov has too high an anti-rating, it is highly likely that, despite rumors, he will not launch his own project in Kharkov. The head of the Servant of the People party, People's Deputy Oleksandr Kornienko, named Arsen Avakov the best candidate for the mayor of Kharkiv. Now A. Avakov supports the candidacy of the current and. about. Mayor Igor Terekhov (Bankovaya is also betting on him in his confrontation with ex-mayor Mikhail Dobkin).

2. The Supreme Court overturned V. Zelensky's decree on the dismissal of the Head of the Constitutional Court of Ukraine Alexander Tupitsky.

On July 14, it became known that the Supreme Court declared it illegal and canceled the decree of President Volodymyr Zelensky, with which he dismissed Alexander Tupitsky from the post of head of the Constitutional Court.

Recall that on March 27, 2021, V. Zelensky canceled the decrees of ex-President Viktor Yanukovych on the appointment of A. Tupitsky and A. Kasminin as judges of the Constitutional Court. He noted that the documents were canceled as a result of "an audit of the ex-president's decrees carried out in pursuance of the NSDC decision."

From a legal point of view, this formulation was initially dubious. But it fits well with the attempt to rule the country with a "strong hand" with the help of the NSDC, which we have been observing since the beginning of February.

A. Tupitsky and A. Kasminin appealed against the presidential decree in the Supreme Court. They also appealed to the District Administrative Court of Kiev, demanding a ban on dismissing them from the post of judge of the Constitutional Court and a ban on paying them funds.

Having fired two judges of the Constitutional Court, the president hoped to informally subordinate him to himself, so that in the future he would not receive the repeal of the laws he was promoting through the mechanism of filing claims about their unconstitutionality in the Constitutional Court. But, in the current situation, the legitimacy of the decisions of this new composition of the court, as well as the appointment of new judges, is questionable. It is worth saying that after the decision of the Supreme Court, all decisions that were made by the CCU without the participation of A. Tupitsky now have dubious legitimacy, including the decision of the CCU under the law "On ensuring the functioning of the Ukrainian language as the state language."

In principle, this is an indicative court decision, which can undermine the entire management model that the president has built: the decision of the NSDC, sanctions, actions against the KSU - all this can crumble. The Supreme Court has clearly demonstrated that they are ready to cancel the presidential decrees, and there are now several lawsuits challenging the decrees of V. Zelensky, in particular, on the introduction of NSDC sanctions.

In response, the OP said that the Supreme Court, by its decision, is trying to protect the corruption system and destroy judicial reform. According to the adviser to the head of the OP, Mikhail Podolyak, A. Tupitsky is a person suspected of committing crimes against justice. And he added that the decision of the Supreme Court will be appealed. And in this case, it is possible that, under pressure, a subsequent decision on this case may be made in favor of V. Zelensky.

This week, Prosecutor General Irina Venediktova signed a summons to A. Tupitsky in the UCP with the aim of delivering a message on a new suspicion of criminal proceedings. We are talking about unauthorized interference in the operation of an automated system, which led to a falsification of information, committed again, by prior conspiracy by a group of persons. Also, A. Tupitsky was handed a summons to the Prosecutor General's Office in the framework of a criminal case that concerns the decision of the Constitutional Court of October 27, 2020, according to which Article 366-1 of the Criminal Code was declared unconstitutional, which provides for punishment for inaccurate declaration.

It is possible that now, in order to put pressure on A. Tupitsky, criminal cases against him will multiply so that he voluntarily resigns.

3. The Verkhovna Rada adopted the draft law “On the Supreme Council of Justice”.

On July 14, the Verkhovna Rada adopted in the second reading and generally initiated by the President Law No. 5068 "On Amendments to Certain Laws of Ukraine on the Procedure for Election (Appointment) to the Positions of Members of the High Council of Justice (SCJ) and the Activities of Disciplinary Inspectors of the High Council of Justice", it was supported 259 people's deputies.

In particular, the parliament supported amendment # 733, which gives the decisive vote in the formation of the SCJ to "international experts" appointed on the recommendation of Western partners. The amendment will also allow dismissing members of the SCJ without the decision of the body that elected or appointed them - the congress of judges of Ukraine, the congress of lawyers in Ukraine, the all-Ukrainian conference of prosecutors, the congress of representatives of legal higher educational institutions and scientific institutions.

According to the law, the first composition of the Ethics Council will include three persons from among judges or retired judges, determined by the Council of Judges of Ukraine, and three persons who will be elected by international organizations.

In April 2021, the High Council of Justice sharply criticized the provisions of bill No. 5068 because of the proposal for the participation of persons identified by international organizations in the election of council members. The GSP insisted that no international organization, in accordance with its charter, has the authority to form bodies that are endowed with powers of authority in relation to the state of Ukraine. The provisions of the law violate the fundamental constitutional principles of the state, in particular, sovereignty, the right of the people of Ukraine to implement it, and the indivisibility of state power. Since international organizations, as subjects of the delegation of three representatives, are not representatives of the people of Ukraine, they do not belong to the people of Ukraine, and therefore are not carriers of state power in Ukraine.

In this case, we observe that the process of judicial reform continues to be implemented precisely according to the Western model. Probably, Bankova in the judicial sphere is "losing ground" in the hope of loans and political support from the West.

4. The Verkhovna Rada supported the presidential recommendations to the bill No. 3711-d and left the decisive vote in the selection of VKKS for international experts.

On July 13, parliament adopted Law No. 3711-d on the selection of the High Qualification Commission of Judges (VKKS), taking into account the requirements of the President and the participation of international experts. Earlier on July 8, V. Zelensky vetoed the law and returned it with his proposals.

The new version provides that now the VKKS can start work if at least 11 out of 16 members are appointed to its composition (as it was in the voted edition), but at least six of them must be retired or retired judges.

At the same time, the document excluded the provision on the parity of representatives of the Council of Judges and international experts when making a decision by the competition commission.

The main requirement of the president to the law was to clarify the procedure for making a decision by the competition commission with the participation of international experts if the commission makes this decision by a majority vote, that is, 4 out of 6. V. Zelensky deleted the relevant paragraph from the text of the law, which introduced the corresponding uncertainty. In this case, the President satisfied the recommendations of the Venice Commission regarding the procedure for making a decision by the competition committee on the appointment of the composition of the VKKS. Accordingly, it is determined that in the final text of the law a decision is taken by four votes out of six if at least two representatives from international organizations voted in favor of this decision.

In this case, it is obvious that the main influence on the Ukrainian judicial system is taken over by external players. The IMF and Western partners insisted on the adoption of the law in this form with the necessary amendments. At the same time, if at Bankova, apparently, they agreed with this option or are trading on this account, then the judiciary showed more active resistance to external influence in this matter. It is likely that it was their representatives in parliament who tried to push through an amendment that was contrary to Western interests.

5. The Constitutional Court recognized the law "On ensuring the functioning of the Ukrainian language as the state language" constitutional.

This week, the Constitutional Court (CC) of Ukraine recognized the constitutional law "On ensuring the functioning of the Ukrainian language as the state language", which was adopted by the Verkhovna Rada in April 2019. The constitutional submission of 51 people's deputies with the requirement to check the constitutionality of the law on the Ukrainian language to the Constitutional Court was received on June 21, 2019. The presentation was mainly made by the deputies of the "Opposition Bloc".

According to the law, the Ukrainian language becomes compulsory in all spheres of public life, with the exception of religious rites and private communication. In particular, for public authorities and local governments, educational institutions, hospitals and the service sector.

At the same time, earlier the Venice Commission recommended revising the "language law". And first to adopt a law on national minorities, otherwise the law on languages ​​creates grounds for discrimination against them. It was also proposed to consider the possibility of canceling the mechanism of sanctions for violation of the norms of the language law.

At the same time, the language law, which was adopted in violation of the voting procedure, directly violates Article 10 of the Constitution of Ukraine, which guarantees the free development, use and protection of Russian and other languages ​​of national minorities of Ukraine; Article 24 of the Constitution of Ukraine, which prescribes a ban on privileges or restrictions, including on the basis of language. It also violates the European Charter for Regional Languages.

At the same time, we recall that earlier in 2011. The KSU made decisions of a different content - for example, by the decision of the KSU of December 13, 2011 N 17-rp / 2011 in the law "On the Judicial System and the Status of Judges", certain provisions on the use of regional or national minority languages ​​in courts were recognized as being in line with the Constitution of Ukraine , including Russian. Thus, in court proceedings, along with the state language, the use of the languages ​​of regional or national minorities was legalized. And then the Constitutional Court considered that it was correct.

Therefore, the current decision of the Constitutional Court can be considered rather political or taken under pressure. It contradicts not only the position of international organizations, the Constitution of Ukraine, but also the very decision of the Constitutional Court of December 13, 2011 N 17-rp / 2011. And it is possible that in the future the same decision will be made, but with a different sign.

Informationally, the decision of the Constitutional Court on the language law in favor of Bankova was supposed to "interrupt" another decision of the Supreme Court, which was unpleasant for the president, regarding A. Tupitsky.

Formally, despite the fact that the decision of the Constitutional Court on the law on languages ​​is final and not subject to appeal. It follows from the decision of the Supreme Court that the decision of the Constitutional Court on the language law was made at a time when some of the judges of the Constitutional Court were not physically allowed to participate in the session, and therefore the legitimacy of the decision of the Constitutional Court is questioned.

 

FOREIGN POLICY.

Briefly:

In the outgoing week, two trends emerged in foreign policy.

As a result of Vladimir Zelensky's visit to Berlin, it became clear that his tactics of "tough rhetoric" in relations with Germany did not work. Moreover, it spoils these relations, pushing the German leadership to statements that are more and more at odds with the position of Kiev. So, following a meeting with the Ukrainian president, Angela Merkel announced the need to implement the Steinmeier formula in Ukrainian legislation and that she intends to discuss Ukrainian interests with American President Joe Biden without the participation of Ukraine itself.

Also, following the results of the outgoing week, a tendency towards renewed interest of the Russian authorities in the Ukrainian topic became obvious. It is eloquently evidenced by Vladimir Putin's article on the unity of the Russian and Ukrainian peoples, in which, in addition to an excursion into the Russian vision of history, he draws “red lines” for the West and the Ukrainian authorities related to the “military development of the territory of Ukraine” and says that "Will not allow Ukraine to turn into anti-Russia."

1. Vladimir Zelensky's visit to Berlin.

On June 12, the Ukrainian president flew to Germany to discuss topical issues of bilateral relations with Angela Merkel. At the same time, Kiev did not hide the fact that the main topic of the negotiations was Nord Stream 2 and guarantees or compensation that Berlin could provide Kiev in connection with the launch of this project.

The Ukrainian authorities actively deny the fact of discussing any compensation with Germany, stating that for Zelensky, the Nord Stream 2 issue is, first of all, a security problem. Moreover, the office of the Ukrainian president even claims that the head of state flew to Berlin to stop the project, which is already 98% complete.

However, according to the German edition of Der Spiegel, Germany offered to pay compensation and Ukraine has even put forward its demands. According to the newspaper, the Ukrainian side wants to receive € 2-3 billion, as well as the opening of a credit line from the European Union for € 5 billion and guarantees to extend contact with Russia for 10 years for gas transit through its territory. How Germany can meet the latter requirement is unclear, given that this clause cannot be met without cooperation with Moscow.

However, the results of the meeting turned out to be much less encouraging for Kiev than the German press wrote the day before. At an official press conference, Federal Chancellor Angela Merkel stated the following:

First, Germany will insist in the "Normandy format" that gas transit remains in Ukraine until 2024, despite the launch of a direct gas pipeline from Russia to Europe, Nord Stream 2. Please note - only until 2024 (that is, until the end of the current contract), but not later.

Secondly, there is a lack of progress on the issue of a peaceful settlement of the conflict in Donbass. Therefore, it is necessary to implement the Steinmeier formula in Ukrainian legislation. This statement by Merkel looks like a harsh objection to the current Ukrainian leadership, which is already openly declaring that it is not going to fulfill the Minsk agreements.

Third, Germany will discuss Ukraine's issues with the United States. In recent months and years, Kiev has often demanded: - "No negotiations about Ukraine without Ukraine." And here is a statement from the German Chancellor. And even at the official press conference, that is, right in the face.

And finally, fourthly, Germany will provide Ukraine with one and a half million doses of coronavirus vaccine. Against the background of the previous paragraphs, this statement looks like a comforting handout.

In turn, the President of Ukraine told reporters that it is too early to talk about the results of the meeting with Angela Merkel. The issues that concern Ukraine, he said, will be discussed at a future meeting in the "Normandy format" with France and Russia, as well as during a meeting between Merkel and Biden.

As Vladimir Zelensky said, quote:

"I will also raise these issues and the issues of America's participation in the negotiation process at a meeting with the US President."

It's like trying to put a good face on a bad game. Considering that Moscow openly declares that they see no point in summit meetings in the "Normandy format", and the United States is not interested in participating in formal negotiations and sharing responsibility for their outcome, the above statements of Vladimir Zelensky can be regarded as pure populism.

In general, as a result of the meeting of the Ukrainian President with the German Chancellor, it became obvious that relations between the two countries are now far from the highest point of their development. It seems to us that the reason for this is Kiev's non-diplomatic rhetoric addressed to its European partners.

About a month ago, in an interview with the German newspaper Frankfurter Allgemeine, Vladimir Zelensky voiced direct reproaches against the German side. In particular, he stated that Germany could do more for Ukraine and called on Berlin to supply Kiev with weapons. In the words of the Ukrainian president, there was also criticism of the German position regarding negotiations in the "Normandy format" and a peaceful settlement in Donbass in general.

It is not surprising that after such statements, the planned negotiations between Vladimir Zelensky and German Defense Minister Annegret Kramp-Karrenbauer were canceled.

The unequivocal stake of the Office of the President and the Ministry of Foreign Affairs of Ukraine on the victory of the Green Party in the upcoming elections to the Bundestag also does not add confidence to Kiev in relations with the German leadership. To date, the likelihood that a representative of the Greens will become the new chancellor after the September elections is significantly lower than the likelihood that he will be a representative of the CDU / CSU (that is, in fact, Merkel's successor).

All of the above creates an extremely unpleasant situation for Kiev in relations with Berlin. And perhaps the most painful thing for the Ukrainian authorities in it is that the German

Which side is no longer shy about voicing things that are unacceptable for Ukraine in public. Merkel's words about the need to implement the Steinmeier Formula and the intention to discuss the Ukrainian issue in Washington without Kiev's participation are a vivid example of this.

2. Article by Vladimir Putin "On the unity of the Russian and Ukrainian peoples."

On July 12, an article by Vladimir Putin "On the unity of the Russian and Ukrainian peoples" was published on the Kremlin's official website.

The main part of the narration of the Russian president is a retelling of individual historical events, from the period of Ancient Rus to the Soviet Ukrainization of the 1920s. The main idea that runs like a red thread through this whole excursion into history is placed in the title. It consists in the fact that up to the 20th century, most of the inhabitants of the territory of modern Ukraine did not think of themselves outside the same religious, cultural and mental context with the Russian people.

At the same time, Vladimir Putin, nevertheless, recognizes a certain cultural identity for the Ukrainian people, without challenging the fact that there is a separate Ukrainian language. In support of this thesis, as well as as a “beautiful gesture”, in addition to the Russian one, the article mentioned was published on the website of the Russian president in Ukrainian as well.

It seems to us that this gesture should be perceived as a response to the methodical curtailment of the linguistic and cultural rights of the Russian and Russian-speaking population of Ukraine over the past years. Putin writes about this directly, calling the position of Russians in modern Ukraine tragic, quote:

“It would not be an exaggeration to say that the course towards violent assimilation, towards the formation of an ethnically pure Ukrainian state, aggressively disposed towards Russia, is comparable in its consequences to the use of weapons of mass destruction against us. As a result of such a gross, artificial gap between Russians and Ukrainians, the total Russian people may decrease by hundreds of thousands, or even millions. "

But the main thing in the article of the Russian president, nevertheless, is not an excursion into history and not a criticism of the cultural policy of the current Ukrainian government, but the outline, as it is now fashionable to say, "red lines".

It can be clearly seen in several summaries of the article. For example, in this one, a quote:

“All the tricks associated with the anti-Russia project are clear to us. And we will never allow our historical territories and people who are close to us living there to be used against Russia. And to those who make such an attempt, I want to say that in this way they will destroy their country. "

Considering that above in the text of the article, Putin writes about the beginning of the military development of the territory of Ukraine by NATO countries, as well as about the fact that, in the opinion of his "godfather" in the policy of Anatoly Sobchak, the republics should have seceded from the USSR with the same territories, with whom they entered there, a completely unambiguous conclusion suggests itself.

7 years after the actual withdrawal of Ukraine into the sphere of influence of the United States, the Kremlin declared the unacceptability of such a step and unequivocally hinted at the possible consequences.

The only question is who they hinted to. It is unlikely to happen in Kiev, since even before the publication of the article, and in its very text, Vladimir Putin called the Ukrainian authorities "completely dependent on the Americans." Consequently, the hint was directed at Washington.

However, it remains unclear exactly how the Kremlin intends to seek the return of Ukraine to its sphere of influence, or at least its withdrawal from the American sphere of influence.

As Vladimir Putin himself writes in his article, the forces disposed to improve relations with Russia are marginalized, suppressed and persecuted in today's Ukraine. This means that it will not be possible to “reverse the situation” from the inside.

The agreement with the United States, in which Ukraine is "exchanged" for something, also seems almost fantastic. For Washington, control over the country close to Russia is a cheap and almost reliable means of "restraining" Moscow's foreign policy plans.

Well, we suppose it makes no sense to talk about a military scenario. Despite the fact that the Ukrainian authorities periodically intimidate the local population with the idea that "Putin will attack soon," in reality, such a military adventure would cost Russia too much economically. The conquered territories with many disloyal populations would have to be restored, making them a "showcase" and seeking the favor of local residents. And all this to the detriment of its own citizens.

From our point of view, only one conclusion follows from this: if Moscow decides to take any steps to return Ukraine to its own sphere of influence, then these steps will be unexpected, asymmetric and difficult to predict. However, the option is not ruled out in which no practical action will follow Putin's article.

3. The situation in Afghanistan.

As the US winds down its operation in Afghanistan, the Taliban are stepping up their onslaught on government forces: on Monday it was revealed that they had surrounded an important center, the city of Ghazni, and entered its suburbs; meanwhile commander General Austin Miller, who was commanding the US forces in Afghanistan, symbolically surrendered his post.

The American military is leaving Afghanistan at an accelerated pace, abandoning property and equipment. A week and a half ago, they left the largest military base in Bagram in a few hours, without even warning the Afghan government forces. As a result, in a few hours, while the Afghan army was organizing the taking of the base under control, the locals managed to thoroughly plunder the goods left over from the Americans.

In the past four days, the Taliban have been attacking Kandahar from the west. Afghan security forces, including special forces, are trying to push them back. Afghanistan's Defense Ministry says it is carrying out airstrikes and ground operations against the Taliban. In general, as the ministry assures, the situation in Kandahar remains under the control of the government.

On Sunday, government forces, supported by aircraft, repulsed a Taliban attack on the city of Talukan, the center of Takhar province on the border with Tajikistan.

A few days earlier, the Taliban entered Kalai-Nau, the administrative center of Badghis province on the border with Turkmenistan, but were driven out of there.

So far, the Taliban have not taken any of the administrative centers of the Afghan provinces, but are rapidly developing an offensive around them, taking control of smaller cities, villages and entire districts.

A June report by the UN Security Council stated that the Taliban control 50-70% of Afghanistan's territory outside major cities and 57% of regional centers. At the same time, the Taliban representatives themselves claim that they control 80% of the country's territory.

The Taliban launched an offensive after the new US President Joe Biden announced in April that America would withdraw its troops from Afghanistan by September 11 this year. Given the dynamics of the American exit from the country, which many observers compare to flight, it is obvious that this process will end much earlier. The most likely date is early August.

Under these conditions, neighboring countries and major geopolitical players operating in the region are expressing concern about how the security environment will change after the Taliban comes to power. On July 8-9, a delegation from the Taliban's political wing paid a visit to Moscow. To the fears of the Russian side about the future of the Central Asian countries bordering on Afghanistan, its representatives replied that their organization had no plans to expand outside their country.

In part, these statements by the Taliban are justified. Unlike most radical Islamist organizations in the world, proselytism is alien to them. In fact, the Taliban's ideology is based not only on a religious but also on an ethnic (Pashtun) basis. For this reason, it is unlikely that after gaining power in Afghanistan, they will begin to carry out external expansion.

4. Protests in Cuba.

Earlier this week, in Cuba, for the first time in more than 60 years, thousands of protesters took to the streets in about twenty cities across the island, chanting "Freedom!" and "Down with the dictatorship!" President Miguel Diaz-Canel has called on his supporters to also take to the streets to confront the protesters.

The protests began in the city of San Antonio de los Banos, 26 km from the capital, Havana, and spread throughout the country.

The main reasons for the public discontent that has spilled into the streets are the economic crisis and the coronavirus pandemic, which has exacerbated it.

The island, which was under control in the early months of 2020, has experienced a second outbreak in recent weeks, making it one of the places with the highest reported cases by population in Latin America.

Last Sunday alone, 6,750 cases and 31 deaths were officially registered in Cuba.

The country has broken daily records for infections and deaths over the past week, overwhelming many health centers.

In an environment of virtually paralyzed tourism - one of the engines of the Cuban economy - the coronavirus has had a profound impact on the island's economic and social life. This has caused inflation to rise, power outages and shortages of food, medicine and basic supplies.

At the beginning of the year, the government proposed a new package of economic reforms, which resulted in some wage increases, but these were accompanied by rapid price increases. Economists estimate that prices could rise from 500% to 900% over the previous year over the next few months.

Since last year, the government has facilitated the creation of foreign exchange shops, which have begun to sell some food and basic necessities, but the population has little foreign exchange in its hands.

The pandemic has also led to long lines in which Cubans have to stand to buy the most common commodities such as butter, soap or chicken. Some time ago, power outages became more frequent.

Pharmacies and hospitals became short of essential medicines, and pumpkin bread was sold in many provinces due to a shortage of wheat flour.

Last month, the government decided to temporarily stop accepting cash in dollars at the country's banks, the main currency that some Cubans receive as remittances from abroad.

It is not surprising that foreign provocateurs from the United States are taking advantage of the disastrous economic situation of the Cubans, actively inciting the population of the island to anti-government protests.

In recent days, social media has been flooded with messages under the hashtags #SOSCuba and #SOSMatanzas asking for international aid and humanitarian intervention.

We understand that such information campaigns on social networks are not accidental. They are a classic piece of regime change technology used by Washington strategists around the world.

However, Cuba is one of the few countries that has managed to stop all the subversive actions of the United States since the Cuban revolution, while maintaining its own political system and independence. This gives reason to believe that even now it will not be easy for the Americans to achieve its destabilization.

ECONOMY.

Briefly:

A hasty transition to market relations in the Ukrainian gas market threatens to disrupt the heating season of 2021/22 due to the 100 billion debt of gas enterprises to NJSC Naftogaz. To prevent disruption of the heating season, the parliament adopted a law on the restructuring of "gas" debts.

The authorities will try to additionally fill the budget with real money of citizens, who will presumably be more willing to put money in Oschadbank on deposits after the latter is included in the system of the Deposit Guarantee Fund for individuals and increasing the deposit guarantee amount to 600 thousand hryvnia by 2023 (for the presidential elections in 2024 and Zelensky to be re-elected for a second term).

The corporatization of Ukroboronprom ultimately means “optimization” of costs, namely, the dismissal of employees and the sale of property despite the conflict in the East, under the guise of OECD corporate governance standards, which boil down to the fact that the state is a priori an ineffective owner of property.

1. The Rada adopted a law on the restructuring of "gas" debts on the market (bill No. 3508-d).

On July 14, the parliament approved the bill # 3508-d as a whole, which proposes a mechanism for restructuring debts arising on the accounts of teplokommunenergo, gas sales and regional gas companies - they exceed UAH 100 billion.

The law establishes the procedure for settling debts for natural gas and its transportation by enterprises. As noted in the Ministry of Regional Development, this law is vital in the context of preparations for the upcoming heating season.

"Teplokommunenergo will not be able to become full-fledged participants in the natural gas market and fulfill the terms of market agreements without settling the debt to NJSC Naftogaz of Ukraine," said Deputy Chairman of the Ministry of Regional Development Natalya Khotsyanovskaya.

Thus, the law proposes:

● to postpone the settlement date of debt settlement from July 1, 2016 to June 1, 2021;

● allow companies to restructure their debt for gas distribution and transportation with the subsequent write-off of the accrued interest;

● to verify and settle the debt on the difference in tariffs for heat energy, heating, hot water supply, etc., which was formed before or after January 1, 2016, at the expense of the state budget;

● suspend production and measures to enforce debt collection, including under agreements with Naftogaz and gas distribution network operators.

In September, the parliament will register the second bill containing changes to the state budget. In particular, the amounts checked by the state that are subject to compensation, and the sources of repayment determined under the control of the Ministry of Finance.

The reform of the gas industry in Ukraine with its transition to a fully market economy eventually led to the risk of disrupting the heating season of 2021/22 due to the total debt of gas enterprises in 100 billion hryvnia to NJSC Naftogaz.

2. Oschadbank and the Fund for Guaranteeing Deposits of Individuals will cooperate for the sake of joining the bank to the system.

On July 14, the Deposit Guarantee Fund and Oschadbank signed a memorandum of cooperation for the bank to acquire the status of a Fund participant.

The Memorandum provides for the development and implementation of joint activities that are designed to harmonize the process of Oschadbank's accession to the status of a FGVFL participant. In particular, we are talking about joint work to improve legislation in the field of guaranteeing deposits. The parties also agreed on the exchange of information, including the provision by Oschadbank of the reporting stipulated by the legislation; on mutual organizational, informational and methodological support. "By the end of the year, it is expected to adopt a law that will promote the distribution of guarantees of the Deposit Guarantee Fund in Oschadbank without additional burden on other participating banks," said Svetlana Recrut, Managing Director of FGVFL. Chairman of the Board of Oschadbank Sergei Naumov called the memorandum regarding the first card of Oschad's entry into FGVFL, which will ensure a harmonious transition to the new system.

On June 30, the parliament supported in the first reading bill No. 5542-1, which is proposed to increase the amount of guaranteeing deposits of individuals to UAH 600,000 by 2023, as well as to attach the state Oschadbank to the guarantee system. Oschadbank joining the Guarantee Fund is the first step towards the EBRD's entry into the bank's capital. The issue of FGV solvency and Oschadbank's entry into the Fund are also defined in the Memorandum with the IMF.

In addition to the IMF requirement, the inclusion of Oschadbank in the FGVFL system will also be promoted as an excuse for Ukrainians to carry money “from under the mattresses” to deposits in Oschadbank, which will help to additionally accumulate cash resources to pay off debt to the IMF.

3. G7 Ambassadors welcomed the adoption of the law on reforming Ukroboronprom

On July 14, the ambassadors of the G7 countries welcomed the adoption by the Verkhovna Rada of the law on reforming the military-industrial complex (# 3822), which provides for the corporatization of Ukroboronprom.

In particular, the ambassadors insist on improving compliance with the OECD corporate governance principles in Ukraine. In the end, these principles of corporate governance of the OECD substantiate the inefficiency of the state as the owner of property, in particular, through its politicization and diffusion of responsibility, as well as the transition to market conditions for the operation of state-owned enterprises, which ultimately will mean maximizing profits and cutting all possible "unnecessary" costs as then, for example, a bloated staff, the maintenance of obsolete property, and so on. Ultimately, the corporatization of Ukroboronprom and adherence to the principles of corporate governance of the OECD will lead to a reduction in the number of employees and the sale of property of Ukroboronprom in order to make the concern profitable, despite Ukraine being in a state of territorial crisis. The main role of “Ukroboronprom” is completely ignored - ensuring the defense capability of Ukraine, especially in the conditions of the war in Donbass. The desire to corporatize Ukroboronprom indicates that the community of developed countries does not aim to increase Ukraine's defense capability.

4. Farmers will be able to receive loans under state guarantees for the purchase of land.

On July 14, the Cabinet of Ministers at a meeting approved a draft resolution, which made the provision of loans under state guarantees to small farmers for the purchase of agricultural land.

The state "Ukreximbank" is determined by the agent of the guarantor, whose functions, in particular, include checking the correctness of the documents and payments received from the creditor banks. He started lending to businesses with government guarantees on a portfolio basis. Portfolio guarantees are obligations of the state to repay up to 80% of several loans (credit pool) of an entrepreneur to the bank if he goes bankrupt.

Thus, the state-owned Ukreximbank gains a privileged position in the market for lending to farmers on a portfolio basis, which implies the obligation of the state to reimburse up to 80% of the funds lost due to the bankruptcy of the farmer-borrower.

Ukreximbank gains additional power over private banks in terms of the authority to check the correctness of documents and calculations of private banks, which also want to provide loans to farmers. There is a risk that private banks will be squeezed out of the farmer lending market.

5. The OilPoint Agency together with the Federation of Oil and Gas Industry Employers held a round table on the signing of hydrocarbon production sharing agreements (PSA).

On July 8, OilPoint agency, together with the All-Ukrainian Industry Association “Federation of Oil and Gas Industry Employers”, the Internet publication “Ukrainskaya Pravda”, with the participation of the Association of Gas Production Companies of Ukraine, held a round table within the project “GasPoint - on Energy Challenges for Ukraine” on the topic: “Agreements on product sharing is the path to investment and energy independence of Ukraine."

Production Sharing Agreements (PSA) operated in Russia in the 90s during the Yeltsin presidency. The PSA concept bypasses Article 13 of the Constitution of Ukraine, which states that the subsoil of Ukraine belongs to the Ukrainian people, since foreign investors gain access to their production. Returning to the Russian experience of ratifying the PSA Law, Russia could count on receiving profits from oil production only after reimbursing production costs by foreign investors who paid only 10-25% of taxes from the normal level of taxation for their activities in Russia by, inter alia, overestimation of the cost of oil and gas production.

PSAs make sense only in the case of hard-to-reach deposits of mineral resources, for the development of which Ukraine really does not have enough of its own resources.

Returning to the round table on July 8, the event participants stated that the imminent launch of Nord Stream 2 is one of the reasons why Ukraine is interested in PSA.

The implementation of the PSA in Ukraine will not lead to an increase in tax payments to the budget or a decrease in gas and heating tariffs.

6. The IMF plans to issue $ 650 billion to member countries of the fund to overcome the crisis caused by the coronavirus epidemic.

On July 9, the IMF executive committee backed a proposal to distribute $ 650 billion between countries to recover from the pandemic - if approved by the IMF Council, countries will receive funds by the end of August.

The last time the Fund did such an operation was in 2009, and then, says Georgieva, the distribution of SDRs contributed to a significant recovery from the global financial crisis. "In the near future, we will actively cooperate with our members to identify options for voluntarily sending SDRs from richer countries to support the more vulnerable," she concluded. SDR allocations are distributed among IMF members in proportion to the country's quota in the IMF.

Ukraine, in proportion to its quota in the International Monetary Fund, can receive more than $2.7 billion under the new initiative of the Fund for the additional issue of special drawing rights.

As of July 17, 2021, the SDR / USD exchange rate is 0.7, that is, 1.9 billion SDRs are equivalent to 2.7 billion US dollars, although the presentation of the SDR itself does not imply the transfer of real money. The UAE claims (2.2 ÷ 0.7 = 3.14 billion), Great Britain - (19 ÷ 0.7 = 27.14 billion, and the United States claims (79 ÷ 0.7 = 112.8 billion). the fund of 650 billion will be distributed in favor of some countries at the expense of others - the success of Ukraine depends solely on the outcome of the negotiations, as Georgieva said.

Edited by:

Ruslan Bortnik,

Daniil Bogatyrev.

Authors:

Daniil Bogatyrev,

Oksana Krasovskaya,

Andrey Timchenko.

 

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