Analytical review of the week No. 127 of 08/22/2021.

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

16.08.- 22.08.2021

CONTENT:

SUMMARY AND KEY TRENDS.

INTERNAL POLICY.

1. Continuation of the “tightening the screws” trend: attempts by the OP to suppress competing elite groups and opposition media.

2. Death of the mayor of Krivoy Rog Konstantin Pavlov. Expected consequences.

3. The Grand Chamber of the Constitutional Court of Ukraine upheld the application and. O. the head of the Constitutional Court, Sergei Golovaty, on self-recusation.

4 Sociology. Presidential rating, assessment of the activities of V. Zelensky as President of Ukraine.

 

FOREIGN POLICY.

1. The Taliban have taken power in Afghanistan.

2. Visit of Angela Merkel to Moscow.

3. Angela Merkel officially named Armin Lashet as her successor.

4. The Russian Federation has included the head of the National Security and Defense Council of Ukraine Alexei Danilov and Foreign Minister Dmitry Kuleba on the sanctions list.

 

ECONOMY.

1. Ukrzaliznytsia has increased tariffs for cargo transportation, as promised by the new and. O. the head of the enterprise A. Kamishin.

2. Confrontation between the NBU Council and E. Rozhkova.

3. The IMF froze the assets of Afghanistan located in the United States.

4. The Chinese government, represented by Xi Jinping, has taken a course to reduce the influence of big business inside the country.

5. Coal shortage leads to the shutdown of power units.

6. Ukraine's real GDP grew by 5.4% in the second quarter.

 

SUMMARY AND KEY TRENDS.

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

First, relations between the Office of the President and V. Klitschko continue to escalate. The main reason for this is the presidential ambitions of the mayor of Kiev. Almost every day there are searches of utilities or structures associated with V. Klitschko. It is possible that in order to protect V. Klitschko from influencing the administrative resources and the Kiev budget, the head of the Kyiv City State Administration will be appointed.

Secondly, the president's team continued the trend towards “tightening the screws''. At its Friday meeting, the NSDC imposed sanctions against Igor Guzhva, editor-in-chief of the Strana newspaper. All media resources associated with them are ordered to be blocked. In addition, sanctions were introduced against the leaders of the Sharia Party - Olga and Anatoly Sharia, as well as deputy Andrei Derkach. This wave of sanctions should be perceived as an attempt by the authorities to clean up the information field from opposition resources, in anticipation of the protests expected in the autumn-winter period; and also as preparation for V. Zelensky's visit to the United States.

Thirdly, this week, the crisis of the Constitutional Court of Ukraine has reached a new level. President V. Zelensky in this confrontation suffers another defeat from the judiciary. The Grand Chamber of the Constitutional Court of Ukraine satisfied the application of I. O. the head of the Constitutional Court Sergei Golovaty on self-recusation, questioning all the decisions made by the court in this composition (including the decision on the compliance of the sensational "language" law with the Constitution).

Fourthly, the events of the last week in Afghanistan are remarkable not only for a single South Asian country, but for the whole world. They are eloquent evidence of the tendency to weaken the influence of the United States in the international arena. Naturally, this trend is most clearly manifested at the most distant point, where at the peak of its power the American expansion reached in the early 2000s. Following the withdrawal of troops from Afghanistan, calls are already being heard from representatives of the US Democratic Party to withdraw the military contingent from Iraq. This will inevitably be followed by a weakening of influence in other regions of the world.

Fifth, another important trend of the outgoing week, which manifested itself during the meeting of A. Merkel with V. Putin, is that after the American-German agreements concluded last month, the United States completely gave up the "Ukrainian gas issue" at the mercy of Germany and now Berlin will strive (formally or informally) to gain control over the Ukrainian gas transportation system and become a monopoly speculator of Russian blue fuel on the European market. This can be done in the format of a gas consortium or something like that. The Russian Federation also shifted responsibility to Germany for the extension of the transit agreement through Ukraine after 2024, insisting on guarantees for the consumption of additional gas volumes by European consumers. It is the discussion of this issue that is the main purpose of Angela Merkel's visit to Moscow and her subsequent visit to Kiev on August 22.

Sixth, the Ukrainian government, represented by the Minister of Infrastructure A. Kubrakov and I. O. The heads of Ukrzaliznytsia tried to find a compromise with a big national capital in the person of R. Akhmetov regarding a slower increase in freight rates for ore and grain than for other categories of cargo such as, for example, salt or sand.

Seventh, the positive conjuncture of prices for Ukrainian ore and grain contributes to the positive dynamics of real GDP growth in Ukraine compared to 2020, primarily due to active Ukrainian exports to China. This dependence of the domestic economy on China makes the public rhetoric of the Ukrainian authorities more benevolent and friendly to the leadership of the PRC.

INTERNAL POLICY.

Briefly.

This week, the President's team continued the trend of “tightening the screws” - suppressing the main political and economic competitors.

Relations between the Office of the President and V. Klitschko continue to heat up, the main reason for this is the presidential ambitions of the mayor of Kiev. Almost every day there are searches of utilities or structures associated with V. Klitschko. It is possible that in order to protect V. Klitschko from influencing the administrative resources and the Kiev budget, the head of the Kyiv City State Administration will be appointed.

At its Friday meeting, the NSDC imposed sanctions against Igor Guzhva, editor-in-chief of the Strana newspaper. All media resources associated with them are ordered to be blocked. In addition, sanctions were introduced against the leaders of the Sharia Party - Olga and Anatoly Sharia, as well as deputy Andrei Derkach. This wave of sanctions should be perceived as an attempt by the authorities to clean up the information field from opposition resources, in anticipation of the protests expected in the autumn-winter period. Also, a new round of sanctions can be perceived as a mechanism for preparing the visit of the President of Ukraine to the United States, since all the key persons involved in the new sanctions are labeled “Biden's enemies” or “pro-Russian” in the Ukrainian political field.

This week, the crisis of the Constitutional Court of Ukraine has reached a new level. President V. Zelensky in this confrontation suffers another defeat from the judiciary. The Grand Chamber of the Constitutional Court of Ukraine satisfied the application of I. O. the head of the Constitutional Court Sergei Golovaty on self-recusation, questioning all the decisions made by the court in this composition (including the decision on the compliance of the sensational "language" law with the Constitution).

 

1. Continuation of the “tightening the screws” trend: attempts by the OP to suppress competing elite groups and opposition media.

 

This week, the trend of “tightening the screws” continued - the concentration of power in the hands of the president and the suppression of the main rivals of the government.

The confrontation between V. Klitschko and the team of V. Zelensky reached a new level. The reason for the new conflict was the incident with the installation of a Soviet apartment depicting the era of the beginning of independence on the Alley of Heroes of the Heavenly Hundred in Kiev. Representatives of the National Corps broke part of the scenery from the Soviet past, having come into conflict with the police. The mayor of Kiev, Vitali Klitschko, arrived at the scene and said that "symbols of nostalgia for the Soviet Union" are inappropriate, and the Kyiv City State Administration has nothing to do with this, in addition, he added: died here ... Now we do not agree to set up some kind of "95 quarter" here. "

Relations between the Office of the President and V. Klitschko have been heating up lately. The main reason for this is the presidential ambitions of the mayor of Kiev. For his part, V. Klitschko strongly criticizes the Office of the President and fights with them for a moderately nationalist electorate. They also compete for influence over regional elites. Now behind V. Klitschko there is a part of the oligarchs dissatisfied with the policy of V. Zelensky. Potentially, certain political and economic circles can concentrate around him, which do not want to see V. Zelensky for a second term. And if the parliament or the NSDC (or the government, or the president) wants to remove the mayor, he will be able to appeal the relevant decision in court. And win because the decision will be illegal.

It is possible that in order to protect V. Klitschko from influencing the administrative apparatus and the Kiev budget, the head of the Kyiv City State Administration will be appointed. And, perhaps, the situation of the times of V. Yanukovych will be repeated, when A. Popov and L. Chernovetskiy divided powers among themselves. Thus, the Office of the President will try to cut off V. Klitschko from the resource base and management tools, as well as create competition at the regional level between its protégé and the elected mayor. The difference between the posts is that the mayor is elected by the community, and the head of the Kyiv City State Administration is appointed by the president. But not the head of the Kyiv City State Administration, whose position is now merged with the mayor's.

Almost every day there are searches of utilities or structures associated with V. Klitschko. Probably, there is also a conflict of interests of various business structures, some of which are associated with Klitschko and the current Kiev government, while others are close to the President's Office.

In particular, several searches were carried out in the case of embezzlement of budget funds by overstating the volume and cost of work during the construction of the capital's Podolsky bridge, which could cause losses of more than UAH 80 million. On August 17, investigative actions were carried out at the communal enterprise Zhitloinvestbud-UKB due to embezzlement of funds for the repair of kindergartens, as well as at the Kyivkommunservice enterprise due to the organization of criminal schemes for garbage disposal. On August 19, the prosecutor's office together with the State Fiscal Service carried out searches at the capital's communal enterprises "Informatika" and "Kievmisksvitlo". After investigative actions, about a dozen officials were suspected of committing corruption. The former deputy director of this communal enterprise and the director of the said company were suspicious of the embezzlement of 33 million for the purchase of software for the Kiev Institute of Land Relations.

 As part of the trend towards “tightening the screws” and strengthening the president's power, the “mopping-up” of personnel under the direct influence of A. Avakov continued. Artur Tovmasyan was dismissed from the post of chairman of the Kharkiv Regional Council by decision at an extraordinary session. On the eve of the SAP and NABU informed him about the suspicion of receiving UAH 1.05 million. bribes. The Head of the GUNP in the Odessa region, General of the Police of the Third Rank Oleg Bekh, and the Head of the National Police in the Kharkiv Region, Andrei Rubel, also resigned.

The decisions made on August 20 at the meeting of the National Security and Defense Council fit into the same trend. Where sanctions were imposed against the editor-in-chief of "Strana" Igor Guzhva. All media resources associated with them also came under sanctions, in particular the Strana website. The leaders of the Shariya Party Olga and Anatoly Shariy were also under sanctions.

Also, in the conduct of these sanctions and the latest actions of the Zelensky team, an "American motive" can be traced.

It is likely that sanctions against politicians, the media and People's Deputy Andrei Derkach were also introduced in connection with the upcoming visit of V. Zelensky to the United States to improve relations with D. Biden. A. Derkach is already under personal US sanctions. Associated with it are the so-called "Derkach tapes" - a recording of a telephone conversation that allegedly took place three years earlier between Ukrainian President Petro Poroshenko and Joe Biden, then US Vice President, and numerous investigations related to "Biden's corruption" in Ukraine.

By the way, as part of this strategy, Ukraine, on the eve of V. Zelensky's visit to the United States, also agreed to accept some of the Afghan refugees.

In addition, the NSDC introduced personal sanctions on the submission of the SBU against Crimean judges, generals and intelligence officers of the Russian Federation, the media registered in the annexed Crimea and the "LDNR".

 

2. Death of the mayor of Krivoy Rog Konstantin Pavlov. Expected consequences.

On August 15, the mayor of Krivoy Rog Konstantin Pavlov, a member of the Opposition Platform - For Life party, was found dead in his own country house in the village of Volnoe. The death occurred as a result of a gunshot wound. Law enforcers have opened proceedings under the article "premeditated murder". In total, the investigation is considering three versions of the death of the mayor - this is murder, suicide or careless handling of weapons.

The assassination of K. Pavlov, as expected, caused a public outcry. Everyone reacted to him, from local media and opposition representatives to the president, for whom Kryvyi Rih is his hometown. Volodymyr Zelenskyy said he would control the course of the investigation. The political consequences of the death of the mayor of Krivoy Rog Konstantin Pavlov are re-elections and a possible change in the political balance. Now the acting mayor of Krivoy Rog will be a member of the Servant of the People party, Alexander Kotlyar.

With the fact that residents voted for a candidate from another party, the balance of power in the city is changing and the political power of the president is increasing, which will actually rule the city through a secretary.

But the death of the Kryvyi Rih measure also pushes all opposition to a concerted opposition to V. Zelensky. All sorts of political scandals and accusations related to the circumstances of the death are expected. Against this background, Vadim Rabinovich, one of the leaders of the OPLZ party, has already called the version of suicide a "deliberate lie".

In such a situation with suspicions about the possible murder of the mayor, it would be wrong to leave the city under the control of the secretary for a long time. In case of re-election, "Servant of the People" will still have a chance to win the mayor's campaign. In this city, significant economic interests of several Ukrainian economic groups are concentrated, which are fiercely competing with each other. These are the spheres of activity of the oligarchs Rinat Akhmetov and Igor Kolomoisky. In Krivoy Rog there are large metallurgical enterprises PJSC "ArcelorMittal Kryvyi Rih", Severny, Yuzhny, Inguletsky and Central GOK, CJSC "Sukha Balka", OJSC "Krivoy Rog iron ore plant" and others.

 

3. The Grand Chamber of the Constitutional Court of Ukraine upheld the application and. O. the head of the Constitutional Court, Sergei Golovaty, on self-recusation.

This week, the Grand Chamber of the Constitutional Court of Ukraine upheld the statement by and. O. the head of the Constitutional Court Sergei Golovaty on self-recusation, questioning all the decisions made by the court in this composition. In this regard, the crisis of the Constitutional Court of Ukraine has reached a new level. During this time, the Constitutional Court made two decisions - on the law on the Ukrainian language and on remuneration. Thus, these two decisions were adopted by the incompetent composition of the Constitutional Court and are illegitimate.

S. Golovaty sent a statement of self-recusation at the beginning of July 2021, in connection with statements by A. Tupitsky and A. Kasminin (dismissed judges of the Constitutional Court) about the illegality of their dismissal. According to lawyer A. Tupitskogo and A. Kasminin Rostislav Kravets, S. Holovaty must submit an application for self-recusal in all cases that are pending in the Constitutional Court. In fact, Judge S. Golovaty admitted that he had exceeded his powers and did not want to be held responsible for this.

Earlier, the deputies of the Verkhovna Rada appealed to the Constitutional Court with a presentation regarding the compliance of the Constitution of three decrees of President Volodymyr Zelensky: "On the dismissal of a judge of the Constitutional Court" of December 29, 2020, "On the dismissal of a judge of the Constitutional Court" of February 26, 2021 and "On some issues of ensuring the national security of Ukraine "dated March 27, 2021.

Having dismissed A. Tupitsky and A. Kasminin, V. Zelensky hoped to informally subordinate the KSU so that in the future he would not receive the cancellation of the laws promoted by him through the mechanism of filing claims about their unconstitutionality in the KSU. 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. In addition, the decisions of the Grand Chamber of the Constitutional Court of Ukraine and the Supreme Court can undermine the entire model of governance that V. Zelensky built: the decision of the NSDC, sanctions, actions against the KSU - all this can crumble.

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

 

4 Sociology. Presidential rating, assessment of the activities of V. Zelensky as President of Ukraine.

This week, the "Razumkov Center" published the results of a sociological survey, according to which citizens' assessments of the personal qualities and activities of Volodymyr Zelensky as President of Ukraine are as follows:

The majority, 33.7%, of the respondents said that the President of Ukraine V. Zelensky evokes in them mostly negative emotions; 47.5% - of respondents believe that the personality traits (character traits, strong-willed and moral qualities) of V. Zelensky do not correspond to the post of the President of Ukraine to a greater extent; 42.2% of respondents assess the existing results of the activities of V. Zelensky as President of Ukraine mostly negatively; 13.9% - mostly positive; 39.8% note that there are both negative and positive results. Regarding the expectations from the future activities of V. Zelensky as President of Ukraine, for 39.5% of respondents, these expectations are mostly negative.

Such results indicate that despite the fact that V. Zelensky, although he is the leading politician of our political system, can no longer count on the support of the whole society as before. Against the background of unfulfilled election promises and the main demands of society, citizens mostly negatively assess the results of its activities.

There was also published a large study of the sociological group "Rating"

According to the poll, the proclamation of Ukraine's independence would again be supported by 80% of those polled. Compared to last 2020, this indicator has changed within the margin of error (-1%). Wouldn't support - 15% (+ 1%); found it difficult to answer - 5%. Since 2013 (61%) the highest level of support for Independence was observed in the year of the change of power - 2019 (82%). The indicator of support for the Independence of Ukraine in 2021 is 10% less than the result of the Referendum on December 1, 1991 - 90.32%. It is also necessary to take into account that residents of Crimea and ORDLO (about 6 million people) do not participate in the polls.

According to a study by KIIS, published this week, 70% of respondents are ready to support the Act of Independence of Ukraine. Which, accordingly, is 20% less than in 1991.

Nostalgia for the USSR (according to the research of the "Rating" company):

32% of the respondents regret the collapse of the USSR; 61% do not regret; found it difficult to answer 7%. If we consider the results by region, more than 40% of respondents in Dnepropetrovsk, Kharkov, Nikolaev, Kherson, Zaporozhye and Odessa regret the collapse of the USSR, as well as more than 50% in Lugansk and Donetsk regions. At the same time, we must understand that we have data before us without the AR of Crimea and CADLO.

52% believe that the influence of the USSR was both positive and negative; consider that the impact was negative 23%; the impact was positive 18%.

It is believed that the level of education was better:

• In the USSR - 57%

• In Ukraine - 33%

It is believed that medicine was better:

• In the USSR - 54%

• In Ukraine - 34%

It is believed that the standard of living was better:

• In the USSR - 43%

• In Ukraine - 43%

The conditions for self-realization are better:

• To Ukraine - 64%

• In the USSR - 25%

Freedom of speech is better:

• To Ukraine - 77%

• In the USSR - 11%

Foreign policy vector:

50% of the respondents are in favor of moving towards Europe; towards Russia - 9%; for a vector equidistant from both Russia and Europe -35%; found it difficult to answer 6%.

64% are in favor of joining the EU; against 27%; found it difficult to answer 9%.

54% are in favor of joining NATO; against - 35%; found it difficult to answer 11%.

V. Zelensky continues to lead in the presidential rating - 27.2% of respondents. On Wednesday compared to the poll published at the end of July (27.7%), the rating has not actually changed. But at the same time, since May, when the president had - 30.2% (according to the rating agency), his rating has already lost 3%.

This is followed by:

P. Poroshenko - 14.9% (+ 1.5%);

Yuri Boyko - 10.5% (unchanged);

Yulia Tymoshenko - 9.7% (-1.7).

The survey results indicate the following:

The overwhelming majority of Ukrainian society supports the independence of Ukraine. The level of support remains quite high despite the fact that since 1991 it has decreased by - 10%.

But at the same time, a fairly large part of society (one third of citizens) regrets the collapse of the USSR. In addition, most citizens believe that medicine and education were better in the USSR. As for the standard of living, the society is divided. Some believe that the standard of living is higher in the USSR, and some in Ukraine.

With regard to the foreign policy vector, the Ukrainian society is also divided. With 50% support for the aspiration to Europe, a third of society chooses the vector of equidistance. About a third of the society does not support joining the EU and NATO.

The president's rating remains stable in comparison with the previous month, but since May 2021 it has already decreased by 3%.

 

FOREIGN POLICY.

Briefly:

The events in Afghanistan are remarkable not only for a single South Asian country, but also for the whole world. They are eloquent evidence of the tendency to weaken the influence of the United States in the international arena. Naturally, this trend is most clearly manifested at the most distant point, where at the peak of its power the American expansion reached in the early 2000s. Following the withdrawal of troops from Afghanistan, calls are already being heard from representatives of the US Democratic Party to withdraw the military contingent from Iraq. This will inevitably be followed by a weakening of influence in other regions of the world.

Another important trend of the outgoing week, which manifested itself during the meeting between A. Merkel and V. Putin, is that after the American-German agreements concluded last month, in fact, we can say that the United States has completely given up “the Ukrainian gas issue »At the mercy of Germany, and now Berlin will strive (formally or informally) to gain control over the Ukrainian GTS and become a monopoly speculator of Russian blue fuel on the European market. This can be done in the format of a gas consortium or something like that. The Russian Federation also shifted responsibility for extending transit through Ukraine to Germany, linking it with guarantees of Russian gas consumption in Europe. It is the discussion of this issue that is the main purpose of Angela Merkel's visit to Moscow and her subsequent visit to Kiev on August 22.

1. The Taliban have taken power in Afghanistan.

On August 15, fighters of the Islamist Taliban movement entered Kabul, and finally took control of power in Afghanistan. Former President Ashraf Ghani fled the country. Most of his confidants did the same.

It is noteworthy that the capture of Kabul by the Taliban took place without a fight and by agreement with the Americans, who at that time did not manage to withdraw their troops from the country. The subject of the agreements was that Taliban representatives would not interfere with the American side from evacuating their diplomats, military, and supporters from the local population from the Kabul airport (although, for the latter, with rare exceptions, the Taliban declared an amnesty).

In the days that followed, the American evacuation from the Kabul airport turned into a real bacchanalia. A crowd of thousands of Afghans gathered at the airfield, who did not want to remain in the country under the rule of the Taliban. They demanded an evacuation. Some of the American accomplices, in desperation, clung to the landing gear of planes taking off and then fell, crashing to death. Several dozen people died in the stampede at the airport.

As of 20 August, the evacuation was never completed. The American military drove off the locals with machine gun bursts into the air.

The picture of the American evacuation from Afghanistan looked extremely apocalyptic. The media began to compare it with a similar evacuation from Saigon, the capital of South Vietnam in 1975. And, to a large extent, these comparisons were justified. As then, the evacuation process was chaotic. Just as then, the Americans abandoned thousands of their accomplices to their fate. However, this time they also abandoned a lot of military equipment in the country, in fact, armed the Taliban with modern weapons.

As a result of the above, deafening criticism of President Joe Biden erupted in American society. His main political opponents, the Republicans, were especially successful in this.

Georgia's Republican Party spokeswoman Marjorie Taylor Green proposed that Congress declare three impeachments to President Joe Biden of the United States.

She said that she had submitted to Congress for consideration draft resolutions on the removal of the American leader from power for allegedly leaving ten thousand US citizens in Afghanistan under the rule of the Taliban (a terrorist organization banned in the Russian Federation).

Spokeswoman Green also claims that the incumbent violated immigration laws by allowing a crisis on the country's southern border, and also arrogated to himself legislative powers, contrary to the position of the Supreme Court, by extending the moratorium on evictions of tenants.

During the seven months of Biden's presidency, the United States "lost the respect of the whole world," the congresswoman said.

The events in Afghanistan are remarkable not only for a single South Asian country, but also for the whole world. They are eloquent evidence of the tendency to weaken the influence of the United States in the international arena. Naturally, this trend is most clearly manifested at the most distant point, where at the peak of its power the American expansion reached in the early 2000s. Following the withdrawal of troops from Afghanistan, calls are already being heard from representatives of the US Democratic Party to withdraw the military contingent from Iraq. This will inevitably be followed by a weakening of influence in other regions of the world.

 

 

2. Visit of Angela Merkel to Moscow.

On Friday, August 20, in the Grand Kremlin Palace, Russian President Vladimir Putin met with German Chancellor Angela Merkel, who arrived in Russia on a working visit.

Vladimir Putin noted that they had managed to discuss with Merkel the state and prospects for the development of Russian-German relations and exchange views on a wide range of issues. One of the key topics of the talks was the situation in Afghanistan

Putin noted that it is important now to prevent terrorists from entering other countries under the guise of refugees. In his opinion, the process of "restoring public order" by the Taliban should be monitored by the international community with the coordinating role of the UN Security Council.

In turn, Merkel called on her Western colleagues to negotiate with the Taliban, who, according to her, received more support than "would like". According to her, it is necessary to try to save people whose lives were in danger and help them leave the country.

The second important topic is the situation in Ukraine.

Putin said that he had informed Merkel that the Ukrainian government had introduced another draft law on a transitional period in Donbass, which actually involves Ukraine's withdrawal from the Minsk process. In this regard, the Russian president asked Angela Merkel during her visit to Kiev on August 22 to influence the Ukrainian authorities so that they fulfill all obligations on Donbass.

The Chancellor, in turn, said that the Normandy format failed to achieve its goals, but it is the only existing political instrument for discussing controversial topics.

The leaders of Russia and Germany also discussed in detail the topic of the Nord Stream 2 gas pipeline.

Merkel noted that the gas pipeline is not a bilateral Russian-German project, but a European project, in which other enterprises from other countries are also participating. She also said that Germany continues to support the preservation of gas transit through Ukraine after 2024. The Russian president said the project was nearing completion: only 15 kilometers of pipe remained to be laid across the sea.

Probably behind the scenes of the talks were the attempts of Merkel and Putin to discuss the further fate of the Ukrainian gas transit. After the American-German agreements concluded last month, in fact, we can say that the United States has completely given up the "Ukrainian gas issue" at the mercy of Germany, and now Berlin will strive (formally or informally) to gain control over the Ukrainian gas transportation system and become a monopoly speculator of the Russian blue fuel on the European market. This can be done in the format of a gas consortium or something like that.

The Russian Federation also shifted responsibility to Germany for the extension of the transit agreement through Ukraine after 2024, insisting on guarantees for the consumption of additional gas volumes by European consumers. The Russian Federation is ready to extend transit through Ukraine if Germany and other European consumers sign corresponding agreements with the Russian Federation guaranteeing additional consumption of Russian gas after 2024. European consumers are not ready to sign extended contracts with the Russian Federation (they will increase their dependence on the Russian Federation, the consumption dynamics may also change), so the situation with the extension of transit through Ukraine looks complicated so far.

It is the discussion of this issue that is the main purpose of Angela Merkel's visit to Moscow and her subsequent visit to Kiev on August 22.

 

3. Angela Merkel officially named Armin Lashet as her successor.

On August 21, German Chancellor Angela Merkel named her successor as chairman of the Christian Democratic Union, Armin Laschet, the future chancellor of Germany.

Speaking at a pre-election meeting in Berlin, Merkel noted that the elections to the Bundestag will be the first since 1994 in which the current chancellor will not fight for re-election. And in the entire 72-year history of the FRG, the CDU / CSU nominated the Federal Chancellor for more than half a century.

Speaking about the candidacy of the future chancellor of Germany, Merkel emphasized that she highly appreciates the personal qualities of Armin Lashet, in particular "attention to the dignity of people, to the construction of bridges between them."

Elections to the Bundestag will be held on September 26, based on their results a new government will be created and a new chancellor appointed.

If Armin Laschet becomes Chancellor, this will mean the full continuity of Angela Merkel's strategic foreign policy, which has recently been expressed in close alliance with the United States and at the same time strengthening German influence in Eastern Europe with a rather pragmatic approach to relations with Russia.

 

4. The Russian Federation has included the head of the National Security and Defense Council of Ukraine Alexei Danilov and Foreign Minister Dmitry Kuleba on the sanctions list.

On August 21, the government of the Russian Federation extended personal sanctions to the Minister of Foreign Affairs of Ukraine Dmitry Kuleba and the Secretary of the National Security and Defense Council of the country Alexei Danilov.

The list of individuals for whom special economic measures are introduced was approved by Prime Minister Mikhail Mishustin.

The document was published on the official portal of legal information. In total, the extended list includes 922 surnames.

Aleksey Danilov responded ironically to being included in the Russian sanctions list, saying that this is the best assessment of his work and promising "to finally end the Russian world in Ukraine."

In fact, this decision of the Russian authorities means that the Kremlin no longer hopes for constructive agreements with the team of Vladimir Zelensky. The imposition of sanctions against such high-ranking officials as the Minister of Foreign Affairs and the head of the body through which V. Zelensky exercises direct control over Ukraine is a signal from the Kremlin that they do not see any opportunities for compromises with the current Ukrainian government there.

 

ECONOMY.

Briefly:

The Ukrainian government, represented by the Minister of Infrastructure A. Kubrakov and I. O. The heads of Ukrzaliznytsia tried to find a compromise with a big national capital in the person of R. Akhmetov regarding a slower increase in freight rates for ore and grain than for other categories of cargo such as, for example, salt or sand.

Another facet of the confrontation between the forces aimed at Ukrainian sovereignty and the forces aimed at further spreading the influence of the West on Ukraine is the NBU advice and the situation with the reprimand of Rozhkova and Sologub. At the moment, the Kiev Court of Appeal has dismissed the NBU's complaint regarding Rozhkova and Sologub.

The positive conjuncture for Ukrainian ore and grain contributes to the positive dynamics of real GDP growth in Ukraine compared to 2020, primarily due to active Ukrainian exports to China. This dependence of the Ukrainian economy on China makes the public rhetoric of the Ukrainian authorities more benevolent and friendly to the leadership of the PRC.

1. Ukrzaliznytsia has increased tariffs for cargo transportation, as promised by the new and. O. the head of the enterprise A. Kamishin.

On August 17 (and not September 1, as planned), Ukrzaliznytsya increased, as promised by the initially newly appointed acting. heads of UZ Kamishin, tariffs for cargo transportation by railways of Ukraine. UZ plans to receive 10 billion hryvnia more revenues per year from this increase.

Despite the fact that Kamishin worked for 7 years in Akhmetov's structures, this increase in tariffs hit primarily Akhmetov, as well as Novinsky, Zhevago, Mittal, Yaroslavsky and Firtash.

This increase in tariffs has been brewing for a long time due to the critical unprofitability indicators of UZ over the past four years, and until recently, this increase was postponed until later with the help of the State Regulatory Service, which at the beginning of August 2021 changed its attitude to a positive one.

The main items of Ukrainian export, which means “favorite” goods of Ukrainian big business - ore and grain - belong to the first and second categories of cargo, respectively. Tariffs for the transportation of ore and grain were increased by 8 percent on 17 August.

Tariffs for other groups of goods rose significantly more - up to almost 26 percent growth for salt and sand (which are not items of Ukrainian exports to China, for example). In January 2022, tariffs for the transportation of ore and coal will increase by another 20 percent, and grain - by 6 percent.

The authorities softened the increase in tariffs at the first stage specifically for items of Ukrainian export - ore and grain - which are significant items of income for Akhmetov's business empire. Thus, the authorities demonstrate goodwill and intention to maintain constructive relations with Akhmetov in the future.

The press service of DTEK, in turn, comments that this increase in tariffs for the transportation of coal complicates preparations for the heating season in Ukraine in 2021/22. The Ministry of Infrastructure responds that Ukrainian business will survive this increase, given the rise in prices for ore and grain on world markets.

 

 

2. Confrontation between the NBU Council and E. Rozhkova.

On August 19, the Kiev Court of Appeal dismissed the NBU complaint and upheld the decision of the court of the previous instance, which declared illegal the reprimand to the first deputy head of the NBU Yekaterina Rozhkova and the deputy head of the NBU Dmitry Sologub.

On October 5, 2020, the NBU Council issued a reprimand and distrust to the first deputy heads of the NBU, Ekaterina Rozhkova and Dmitry Sologub, who previously worked in the team of the ex-head of the regulator, Yakov Smoliy, who was fired in August.

Rozhkova and Sologub expressed distrust because of their public appearances, said Vasily Gorbal, a member of the Council of the National Bank.

Deputy Governors of the National Bank Ekaterina Rozhkova and Dmitry Sologub violated the policy of "one voice", which could harm the mutual understanding of the regulator with Ukraine's international partners, said the head of the NBU Kirill Shevchenko.

The International Monetary Fund said that ensuring the responsibility of the NBU board should take place in accordance with the principles of managing the National Bank.

The US Embassy in Ukraine shares the IMF's concern over the vote of the NBU Council on the reprimand to the deputy heads of the NBU Yekaterina Rozhkova and Dmitry Sologub.

The court overturned the decision of the Council of the National Bank to reprimand and express no confidence in the first deputy head of the NBU board Katerina Rozhkova and deputy head of the board Dmitry Sologub.

The confrontation between Rozhkova and the NBU Council is becoming another litmus test of the configuration of power and influence in Ukraine. The NBU Council, represented by Gorbal and Shevchenko, represents the interests of internal power groups, while Rozhkova and Sologub received public support from the IMF and the US Embassy in Kiev.

 

3. The IMF froze the assets of Afghanistan located in the United States.

On August 15, the United States froze all of Afghanistan's central bank assets in the country to prevent the Taliban, which took power in Kabul last week, from accessing them. According to the International Monetary Fund, there are more than $ 9 billion in US accounts held by the Afghan central bank.

Thus, the United States will strengthen its negotiating position with the Taliban, trying to make them more compliant. Once the US is convinced that the Taliban are not making concessions, the $ 9 billion will forever remain under Washington's control. A similar situation happened with the "billions of Gaddafi" in Western banks, which allegedly belonged in fact to the Libyan people, but after the overthrow of the Gaddafi regime were never returned back to Libya.

The only example of a country that managed to get its gold reserves back from the United States was France during the reign of President Charles de Gaulle in 1965. Even Germany still cannot achieve this.

 

 

4. The Chinese government, represented by Xi Jinping, has taken a course to reduce the influence of big business inside the country.

On August 19, Xi Jinping told officials at a meeting of the Central Financial and Economic Affairs Commission of the Chinese Communist Party that the government should "regulate excessively high incomes and encourage high-income groups and businesses to return to society more."

Xi Jinping is expected to expand wealth taxes and raise income tax rates.

In November 2020, regulators barred tech company Ant, 33% of which is owned by Alibaba, from listing in Shanghai and Hong Kong, a move that would cement its board chairman Jack Ma's position as one of the world's richest men. Shares on the Shanghai Stock Exchange fell after a peak in February after a series of similar regulatory restrictions on the financial sector and industry fines forced them to adhere to stricter environmental regulations.

As a result, the wealth of the country's richest tycoons has reportedly already declined. According to a Financial Times analysis, the combined net worth of China's two dozen tech and biotech billionaires has fallen 16% since the end of June.

With the growth of the economic power of each individual businessman, his political ambitions inevitably grow, as happened in the entrepreneur Jack Ma, who began to criticize the very system of power in China, and then mysteriously “disappeared” from public life for almost three months - from the end of 2020 to early 2021.

Any large state is faced with a situation where the scale of certain corporations allows them to become some kind of "states within the state", gradually replacing the role of the nation state, on the territory and in the jurisdiction of which they are located.

5. Coal shortage leads to the shutdown of power units.

As of July 20, 2021, only one third of all power units of Ukrainian thermal power plants and thermal power plants are in operation. Two thirds are at various stages of reconstruction and renovation.

On August 12, 12 power units were mothballed, nine power units were under overhaul, seven were under emergency repair, five were in reserve, and five were under medium, current or operational repairs. More power units - sixteen - are idle due to lack of coal.

One of the two power units of the Kiev CHPP-6 is undergoing overhaul, and the other costs due to lack of fuel. Two of the three power units at Kharkiv CHPP-5 have been shut down due to lack of fuel, one is undergoing major overhaul. A similar situation with the shutdown of power units was observed in February 2021, when they stopped one after another due to lack of fuel.

At the beginning of August 2020, coal reserves were 2,800,000 tons - four times more than now.

First, NNEGC "Energoatom" in June stopped the operation of two nuclear power units (No. 4 of the Zaporozhye NPP and No. 2 of the South-Ukrainian NPP). Since the consumption of electricity grows in the summer heat, its deficit is formed. Coal-fired power plants began to produce more current.

Secondly, coal is not purchased due to lack of funds. The reason for the lack of money was the record collapse of electricity prices in early July, not least caused by the actions of DTEK.

Third, coal reserves may not be deliberately increased in order to provoke fuel shortages to keep electricity prices high.

Gennady Ryabtsev, director of the Psyche scientific and technical center, assures that there will be no shutdown of power units in winter. As a last resort, Ukraine will again start importing electricity from Russia and Belarus. DTEK has already ordered a consignment of coal from Kazakhstan.

 

 

6. Ukraine's real GDP grew by 5.4% in the second quarter.

The State Statistics Service published a study comparing real GDP indicators in the second quarter of 2021 and 2020, respectively.

The main factors behind GDP growth in the second quarter, they say, were a gradual recovery and optimistic business sentiment due to the easing of the quarantine. Also - high consumer demand of the population, in particular, stimulated by the growth of the minimum wage.

Another factor, the department explains, was the favorable situation in external commodity markets, which contributed to the highest volumes of exports of goods and services. For example, in the second quarter of 2021, on an annualized basis, the price index for base metals increased by 68.3%, world prices for iron ore - 2.1 times, for fertilizers - by 64.8%, for wheat - by 30.9 %.

The Center for Macroeconomic Modeling of the Kiev School of Economics downgraded the forecast for GDP growth in 2021 to 3.6% from 4.7% in the April forecast and improved the forecast for GDP growth for 2022 - 4.4% compared to 2.7%.

The Ministry of Economy has estimated GDP growth for 5 months of 2021 at the level of 0.7%, for 2 quarters - at 6%.

The National Bank left its forecast for real GDP growth unchanged - at about 4% in 2021-2023.

The extremely high economic dependence of the Ukrainian economy on the export of products to China, in turn, the Ukrainian government is more compliant and friendly to the Chinese at the official level, which was expressed in the extremely complimentary statements of David Arakhamia regarding the Communist Party of China and Xi Jinping personally.

Edited by:

Ruslan Bortnik,

Daniil Bogatyrev.

Authors:

Daniil Bogatyrev,

Oksana Krasovskaya,

Andrey Timchenko.