Block 1. War in the east of Ukraine: "The Minsk process"
Today Ukraine is on the unsteady way of political freezing of the conflict in the east of the country because of many factors (an economic crisis, lack of arms, the continuing inherent contrudiction of ruling elite and diplomatic pressure). Thus the "Minsk" negotiation process (which was actually started in August, 2014) shows nowadays the low efficiency of the political settlement achievement.
The main causes of this are:
• Unresolved geopolitical conflict between the USA and the Russian Federation. Each of the countries continues searching the ways of achievement military, political and economic advantages over the rival, keeping and modulating the high level of tension;
• Big number of questions which must be agreed and reconciled, multiplied on extreme complexity of political logistic of the peace plan (elections in some areas of Donetsk and Luhansk regions, amnesty, sequence of implementation of the main points of the Minsk Agreement) and deep mutual distrust of the sides;
• Internal political intensity in Ukraine in connection with fixing in the Constitution of Ukraine of the special status of Donbass which in total with other factors (actions of the right radicals an economic crisis) threatens to develop into a new endangerment to stability of present political system;
• Impairment of the negotiators’ position from among EU countries – Germany and France against a background of the migration crisis, the Russian invasion of Syria; terrorist attacks in France and the accruing contradictions in the EU.
At the same time the main purposes of the sides in this conflict practically haven`t changed during the last year:
The power in Ukraine tries "to freeze" the conflict, in a parallel way using it for suppression of opposition within the country (by the announcement of last "the fifth column"), postulating the myth about efficiency of its actions in process of solution the East Ukrainian crisis;
Donbass separatists aim to take hegemony of occupied Donbass' regions: the social and humanitarian sovereignty and the control over the economic resources of the region;
EU wants a "peace by any price" , plunging into the internal problems more and more, but still is under the pressure of the USA and tries to "save clean hands" in front of it`s citizens
USA aspire to save Ukraine in a zone of its influence at any prise and any tools;
Russian Federation is interested in saving instability in the east of Ukraine.
Thus the Russian Federation and the USA are playing "long game" - are ready to keep present models of opposition for 3-5 years by increasing from time to time the degree of tension and showing readiness for a power resolution of conflict (as blackmail).
As a result the current course of negotiations on settlement of the conflict within the Tripartite contact group in Minsk (under the auspices of OSCE) can be characterized with several theses:
• It`s the imitation of the peace negotiation process ("games in peacekeepers") with the parallel searching of variants of a victory over opponents;
• Gradual transition from the military and ideological sphere to social and economic (that, however, doesn't exclude situational military escalation);
• Transformation Germany and France positions on the Ukrainian question: from completely "pro-Ukrainian" in the neutral;
• Strengthening of understanding the fact of lack of efficiency of international mediators and guarantors of dialogue – OSCE, Germany and France; gradual devaluation of the Minsk negotiation format.
Thus, certainly, the most difficult problem of political settlement in "Minsk Agreements" is development the algorithms of sequence actions in elections in the Donbass (Donetsk People’s Republic and Lugansk People's Republic), which is really necessary for all sides of the conflict.
In this way it’s necessary to look back to the “Morel’s plan» which is officially called as “Elements for the temporary law on local elections in some areas of Donetsk and Lugansk regions“.
According to it, Donbas elections will be held after ceasefire under supervision of the ODIHR/ OSCE. Ukraine amnesty is guaranteed for all the participants of the elections. It is expected that the elections will be held under the direction of the temporary local election commissions with representatives of local offices of the parties that were registered before 2014.
These commissions have to possess broad authority. Such questions as the admission /not admission of the parties to electoral process and accreditation of mass media will also be included in their competences. The residential qualification for the implementation of the passive suffrage is also provided.
However the most odious in this document is absence of point about disarmament and recurrence of control over state border to Ukraine.
During press-conference devoted to the results of the summit in Paris Franзois Hollande , the President of France accurately describes his image of further implementation of Minsk agreement: Firstly, amnesty and elections, then special status for Donbas, diversion of foreign armed groups and returning the control over border for Ukraine.Thus, it is possible to claim that leaders of the EU are interested in the fastest solution of the Ukrainian problem, being guided by the principle of speed instead of quality. It is obvious that position of Russian Federation, Germany and France concerning elections in the Donbass area are similar. Thus, actually without having subjectivity in the international relations, Ukraine de facto will have to accept the conditions dictated by it. It’s clear that Morel’s plan will form the basis of the future law about elections in certain areas of Donetsk and Lugansk regions.
Almost the same approach was also publicly confirmed on 9, November by the Minister of Foreign Affairs of Germany Frank-Walter Steimajer. At the same time Russia and the USA use fighting activity of separatists / the Ukrainian military as the instrument of rendering influence on negotiation process, trying to make opponents more compliant. Most likely, tendencies of political and economic opposition between the Russian Federation and the USA on "the Ukrainian theater" will proceed, and the role of the EU will weaken. Ukraine risks to be de facto alone with its social, economic and political problems.
Block 2. Internal problems of Ukraine.
2.1. Coalition crisis.
After acceptance of changes in the Constitution regarding decentralization and the status of Donbas in the first reading (31.08.15) there began the serious coalition crisis in Ukraine, caused by the following factors:
• Aggravation of social and economic crisis and the falling of ratings of the main parties and leaders of the power;
• Opposition on local elections (25.10.15);
• Composite character of the coalition and divergence of interests of the coalition parties and/or financial-political groups standing behind them;
• The attempt of the President of Ukraine to expand the powers and to concentrate additional tools of the power.
In general it should be noted prolonged character of this crisis which slows down work of parliament and threatens realization of the purposes of both internal, and foreign policy fixed in the Coalition agreement and the Program of the government actions..
Voting of the project of modification the Constitution 31.08. led to an exit of Radical party of Lyashko from the coalition and extremely made worse the relations in the coalition between president's party and Narodny Front (party of prime-minister) on the one hand and "Samopomich" and "Batkivshchyna" on another. A long time the coalition actually didn't exist. It was incapable to provide productive voting. Regards to it there was organized pause for 3 weeks in the Parliament's work under the pretext of local elections.
By the end of that pause, parliament with huge difficulties, had voted so-called "a visa-free package" - the list of the laws necessary for implementation the plan for liberalization of a visa-free regime between Ukraine and the EU.
At the moment in the ranks of the coalition the European Ukraine it is possible to observe serious split. On the one side the BPP and NF have formed strong union caused by a difficult situation of party of Yatsenyuk which support has fallen to 1 percent (sociological poll on September 7-21). Having the critical level of legitimacy of NF entered the alliance with BPP in exchange for the post of prime-minister for Arseniy Yatsenyuk. He lost possibility of providing independent policy, having become the BPP satellite and object of influence of the President.
From the other side it is possible to allocate union of "Batkivshchyna" and "Samopomoshch" who are obviously dissatisfied with strengthening of president influence for work of VR, but still they stay in the coalition, because of small number of dividends which they could receive, if they exit from the coalition at the nearest future. After the Constitution was enacated "Samopomoshch" excluded 5 deputies ,who had voted for that draft . The lider of fraction Oleg Berezyuk announced , that fraction have been staying in coalition yet, but added some demands: to require rules of procedure ,to make changes in the Prosecutor General’s Office ,the Jeneral Staff and the Defence Ministry .Also Berezyuk exacted the licvidation of tax police, reforms in the cats-houses and lustration of judges .But still we can see no changes .
Proceeding from the analysis of rhetoric of Yulia Tymoshenko (the leader of "Batkivshchyna"), it is possible to make a conclusion, that the main object of her criticism are, the Cabinet of Ministers and personally Arseniy Yatsenyuk. Tymoshenko obviously isn't going to argue with the President. The reason for that – Tymoshenko's desire to become the Prime minister, and without Petro Poroshenko's support and involvement of his influence on parliament it is impossible.So,what can we see from all those voting for “free-borders” , which is hot-topic because of elections in Mariupol and Krasnoarmeysk(29/11), continuated moratorium for salling the agricultural land and so on? All of this show us the process of creation the contour of the new coalition. And “Narodniy Front “-place here will be change to” Bat`kivschina”, and de-facto coalition also can be supported by some members of opposition.
Up-to-date coalition have all chances to be legalized during the concerning about government actions 11.12.2015 and to make a resolve about its fate.
Voting for the draft Constitution in the second reading will take place, according to Yuri Lutsenko`s statements , in December, 2015. For adoption the Constitution President needs 300 voices which he will try to gather additionally among fraction independent deputies, and also among parliamentary groups. The president's team hopes that it will be possible to achieve productive vote for the Constitutional reform during arrival of the Vice President of the United States Joe Biden. This question, and also question of the budget and tax reform will become key-issues for understanding of viability of the westernized coalition in Ukraine.
2.2. Confrontation between government and radical and right movement
Voting for changes in the Constitution in August 31 has become one more step for the beginning of open oppositions of the president with radical and right parties. This conflict, most likely, arose because of increase of dissatisfactiom of the power and emergence of opposition both in parliament, and beyond the bounds of it.
The parliamentary pro-European opposition is now presented by RPL, “Samopomich” and “Batkivshchyna”. But if “RPL” declared about it`s transition to opposition, Sadovyi`s and Tymoshenko's parties nominally remain in the coalition,despite their actual actions are oppositional. Out of parliament Poroshenko also have opponents applying for the same electorate, as his party. It is Igor Kolomoysky's project “Ukrop” which has showed good result on the last municipal elections. Poroshenko feels that his politic starts losing support among the population and that`s why he tries to strengthen his positions in any possible way, sometimes even appeal to frankly authoritative actions. One mare characteristic feature of this opposition is unprecedented application of undercontroled GPU and SBU, with the minimum media role of the president. Poroshenko acts as "commentator" of events ,trying to minimize the public participation in these processes.
On August, 31 the Verkhovna Rada in the first reading agreed to make changes in the Constitution regarding decentralization of the power. BPP, NF, OB, most of deputies of the Vidrodzennya and Volia Narodu groups have voted positive (265 voices) Batkivshchyna, Samopomoshch, RPL have voted against. Key points ,which caused disagreements – decentralization (institute of prefects) and the special status of Donbass.
On the same day under BR there was rally organized by RPL, Svoboda, Ukrop and the Civil platform parties, during which there was an act of terrorism. Allegedly the fighter of the Sich battalion, Svoboda's member Igor Gumenyuk, has thrown the fighting grenade into the crowd of members of National Guard. As the result of such action some fighters were died, 141 received injuries.
It caused negative reaction of broad masses of the public and shown unavailability of the population to radicalize political processes. At the same time the serious problem for Petro Poroshenko is diagnosed. On the one hand he is under the pressure of Germany and France .that`s why he needs to carry out the Minsk Agreement. On the other hand he is afraid of counteraction of nationalists and “far right” groups. Complexity of the situation is that as more power makes concessions to one, as others are provoked .
This act of terrorism became a convenient reason for prosecution Right-wing party, who also are in opposition to the present power. Prerequisites to this conflict were long ago. In particular it is possible to remember disbandment of a company of the Tornado, arrests and searches of right-wing organizations "Revenge", "Black committee", prosecution of leaders of the Right Sector and an automaidan in Odessa, events in Muchachevo etc. After the act of terrorism under Ukrainian parliament active media campaign against Svoboda party has been started. It is enough to remember Avakov's statement: "I directly blame Oleh Tyahnybok and his Svoboda party. I consider it a crime rather than a political position… Tyahnybok did not bring protestors to the Verkhovna Rada, he brought gangsters who killed and maimed our soldiers. This is my position".
The Ministry of Internal Affairs started to question leaders and party members. In particular, the party leader Oleh Tyahnybok, and also party members Yury Sirotyuk, Igor Shvayka, Igor Krivoruchko, Sergey Boyko, Igor Sabiya, Eduard Leonov was called for questioning.
On 11 , September there was the trial of Yury Sirotyuk who was declared suspicion in connection with explosion under the Verkhovna Rada . Court chose such measure of restraint as arrest for 60 days. Next day , on 12 September , Dmitry Yarosh, the leader of the Right Sector called for "overcoming of dissociation of nationalist movement". On September 19 there was an information about Tyahnybok and Yarosh's meetings where they discussed the ways of association.
Also court put under the gouse arrest ma\embers of VO “Svibida” Ihor Septur and Viktor Burlik for events,which took place on 31,August.
On September 26 Svoboda declared mass searches at their activists.
On October 6 trial put under house arrest Igor Sabiya – the chairman of the Kiev regional organization of Svoboda.
Also under house arrest got Eduard Leonov and Konstantin Vasilets.
On October 12 searches was in Oleh Tyahnybok's deputies – Alexander Sych, Oleg Pankevich and Igor Yankiv. According to Sergey Leshchenko's statements "On 20,February 2014 in the center of Kiev the journalist of BBC noticed a shot from a hotel "Ukraine" room window in which the deputy of Svoboda Igor Yankiv lived at that time." This fact also served as the reason of searches". Leshchenko also noticed "A detail about which very few people know: according to sources, the former deputy Yankiv is the Master of Sports and the firing instructor. That’s the main reason why the searches at their hoses were executed".
On the 16 of October Sych ,Pankevich and Yankiv came to interrogation at GPU and attested about fighting in Euromaidan.
Proceeding from the analysis of these events, and also the general logic of actions of GPU, it is possible to make a conclusion that similar acts of the power against Svoboda are caused by several factors.
Firstly, today Svoboda is the biggest nationalist party, with long history, serious financial resources and wide party structure. It allows to apply for a role of political Piedmont for all other nationalist forces and that is really scare current power.
Secondly, Svoboda became rather convenient candidate for discredit of nationalists. It is certainly got negatively image during events under Rada, that created a sufficient media occasion.
Certainly, the conflict between the power and the right forces wil be proceeding. Prosecution of Svoboda “pushed” the Right Sector on idea of association. It is remarkable , that ,according to sociological research (on September 7 - 21) the rating of Svoboda is 5 percent, a rating of the Right Sector – 6% that gives them potential chances to entry into the Parliament. Thus Svoboda most effectively used that conflict and showed very good result on local elections, having confirmed forecasts of sociologists.
The loudest event in opposition between the power and the pro-European Opposition became Igor Mosiychuk's decimation. On September 17 ,after the speech of the public prosecutor Shokin, and demonstration of video where Mosiychuk allegedly gets a bribe,Rada agreed to arrest him, contrary to parliamentary regulations. That’s how the president reacted to an exit of PL from the coalition, having made an obvious message to Batkivshchyna and Samopomoshch concerning the new rules of the game established by him. It strongly struck on RPL in anticipation of local elections, having lowered their rating to 4.3% (on September 17-28 KMIS).
At the same time, it must be noted that the president's team almost managed to solve a problem of radical and right movements in Ukraine. Voluntary battalions are integrated into official structures. Most of the leaders of the right movement are "on a hook" at law enforcement agencies or under arrest. "Right Sector" is partially demoralized, and partially got under the control of political structures and special services. And the fact of Dmitry Yarosh's leaving the post of the head of Right sector calls into question the future existence of this organization as it forms. "Svoboda " is deradicalized, demilitarized and can become a part of wide political union with "Batkivshchyna"
2.3. Conflicts between financial and political groups
The military-political brench of financial group "Privat", which belongs to the disgraced oligarch Igor Kolomoysky, became one more object of prosecution by the power.
Therefore arrest of the actual leader of this structure Gennady Korban (31.08), made by Security Service of Ukraine and Prosecutor General`s Office of Ukraine, which are under control of the President ,can be regarded from several positions:
1. As an attempt to compel Kolomoysky to radical actions, created a reason for defeat of his business empire, an to more exact its bank component. Privatbank today is the largest private bank of Ukraine ,which each power tries to take under its control;
2. To demonstrate Kolomoysky inadmissibility of violation of the status quo in creation of political projects. Most likely, Poroshenko doesn't like option of development of own Dnepropetrovsk oligarch`s project, as before all his participation in policy was limited only by support of existing parties.
3. Reaction of the authorities on the fact ,that cumulative results of the political projects of Privat group - Ukrop, Vidrodjennia and regional initiatives that was about 20% ,that was considerably complicated process of formation of the pro-presidential coalitions at the local level by the president's party.
However nevertheless most of experts estimate this arrest as the instrument of war between two oligarchical conglomerates one of which has the power.
The main characteristic of this conflict is that it was the first time, when there were used power methods between oligarchs. Before that , all the conflicts were solved by the International Courts of Justice, or by negotiations. It is important to note calm reaction of Kolomoysky and his obvious desire to negotiate. The choice of a measure of restraint in the form of house arrest for Gennady Korban indirectly is confirmed ,that his detention was directed against Kolomoysky (an attempt to provoke him to radical reciprocal actions). The subsequent interview of Kolomoysky and his moderate reaction, broke power`s expectation. Now Korban is the extremely inconvenient prisoner. Because if he is be free there will be questions to adequacy of actions of the power and it shows its weakness in the fight against oligarchs. Indicative trial process will also cause a reasonable question: why there aren`t senior representatives of last power on a dock.
Except Kolomoyskogov ,also Alexander Onishchenko and Konstantin Grigorishin have caused discontent of the power. It is remarkable, that thas opposition didn't concern other oligarchical groups. Relationship between the power and Rinat Akhmetov if not benevolent, but still precisely equal. The same we could say about Victor Pinchuk. For Poroshenko dangerously rapprochement of their interests and possible association of oligarchical clans against him. Futhemore ukrainian authorite jealously protects the oligarchs approached to him, such as Nikolay Martynenko and the head of president's administration Boris Lozhkin.
Financial and political groups of Ukraine aren't satisfied with the current situation - prompt falling of cost of assets, vulnerability, and economic depression. Aggravates this situation the fact that Petro Poroshenko only one of top-10 the richest people in Ukraine who increased the personal assets for the last year.
2.4. The conflicts in authorities
For the last two months it is possible to observe increasing conflicts around public authorities. Arseniy Yatsenyuk's actions on the Prime minister's post have completely been lost internal legitimacy, but kept the external. The main reasons for such situation are economic recession, falling of living-standard, increasing prices and tariffs against unprecedentedly low purchasing power serve. The main media critic of Yatseyuk is Saakashvili. Conflict between this two continues for more than two months. The main reasons for this conflict are
Saakashvili`s negative attitude of to Yatsenyuk's interactions with financial and politic groups;
Counteraction of the Cabinet of Ministers to reforms which are hld by Saakashvili and his team in Odessa;
Personal ambitions of the Odessa governor.
In the beginning of September the conflict between Arseniy Yatsenyuk and Mikheil Saakashvili inflamed. The governor of Odessa region criticized actions of the current prime minister, having accused him of lobbying the interests of oligarchs. In general, this criticism lay in the plane of the general discontent with lack of reforms.
Reaction of the prime minister was very careful. Most likely, Arseny Petrovich didn't dare to begin the open confrontation with temperamental Saakashvili. And soon on the next day the Cabinet of Ministers, got sacked the head of State aviaservice mister Antonyuk ,who had had an old conflict with Saakashvili (Antonyuk's blamed for lobbing the International Ukrainian Airlines - the company of Igor Kolomousky) despite of the fact that functional audit check didn't find any violations in work of that department. Most likely, Poroshenko made such decision because he doesn’t want to be criticized the current Odessa governor. Saakashvili also lobbied experiment with financing the roads from the expense of the superincome of the Odessa customs.
On September 29 from Saakashvili accused Yatsenyuk and the head of State Fiscal Service of Ukraine Roman Nasirov that they actually blocked work of customs by the resolution 724 according to which all goods obtain customs clearance now not on actual (according to the customs code), but at the price which is in advance determined by State Fiscal Service of Ukraine.
Undoubtedly, Saakashvili applies for much more major role in the Ukrainian policy today, than a role of the governor. And his actions in Odessa have nation-wide value. The key sphere in Odessa is the custom on which the destiny of the largest experiment of Saakashvili - Odesa-Rennie Road depends. Thus he uses personnel appointments in his own political goals. So on October 19 26-year-old Julia Marushevskaya was appointed the head of the Odessa customs with competition violation, with assistance of Poroshenko and Saakashvili. It is remarkable that her husband Markiyan Protsiv works as the media director of the TV channel 24 that support measures of Lviv Andrey Sadovyi. So, most likely, Saakashvili ,thanks to active criticism of Yatsenyuk, supporting of the President and receiving media resources , is going to take more powerful place in the Ukrainian policy.
Among the other things, after local elections the subject of reformatting the Cabinet of Ministers was staticized. According to Avakov's statements, ministerial posts will be left by Alexander Kvitashvili and Vladimir Demchishin. We will remind that earlier Arseniy Yatsenyuk declared also possible dismissal of the Minister of Education Alexander Kvit. Besides, a position of the minister of ecology is still vacant. Also threat hangs over the minister of infrastructure Pivovarsky and the minister of an agrarian policy Alexey Pavlenko. Except the internal reasons of this reformatting which consist in an inefficiency of working of the separate ministries, and also ambitions of some politicians who want to take these positions, it is also necessary to note the external reasons. Local elections showed that the power lost supporting because the results improved only critics of the power. Thus, imperious elite needs to show virtual changes to make slower the process of falling of their rates legitimacy.
The conflict between activity of the Prosecutor General`s Office of Ukraine under the leadership of godfather of President's child Viktor Shokin became symbolic. The main objects of criticism in activity of present Prosecutor General`s Office became: participation in the commission on elections of the head of special anti-corruption prosecutor's office, lobby of the prosecutors suspected in corruption, selective justice in relation to competitors of the present power, absence of results at investigation on the case of execution of Euromaidan, etc.
On October 30 the USA Ambassador Jeffrey Payette declared: "The Prosecutor General's Office had to stop undermining reforms, to protect the corrupted prosecutors in the ranks, such as arrested in July notorious «diamond prosecutors» , and also to stop blocking of criminal investigations of bribery, arrangements and political agreements" It is not the first attack of Payette to Prosecutor General`s Office of Ukraine : earlier he declared: "Instead of supporting reforms in Ukraine and to work for corruption eradication, the corrupted officials in GPU do worse, openly and aggressively undermining reforms".
Also, it is necessary to remember the requirements of activists about Victor Shokin's resignation (we will remind that the petition with such requirement gained necessary 25 thousand signatures). And also the statement of Transparency International in which it is noted that the top officials of the state try to establish through the public prosecutor Victor Shokin personal control over key anti-corruption bodies to force them to work in own interests.
It is about famous to "Shokin's four" which the public prosecutor delegated to the commission to destination chapters of special anti-corruption prosecutor's office without which working of National anti-corruption bureau is impossible. The doubtful past of these officials, and also their corruption risks caused discontent, both public activists, and the European partners. However , on the 5 Novemberthere were news that representatives of the EU and Ukrainian power reached a compromise in a question of candidates from Prosecutor General's Office in the commission on elections of the head of special anti-corruption prosecutor's on the fifth's of November. All participants agreed to replacement of 2 from 4 candidates.
However, this message spreading around by the Ukrainian power,is appeared to be a lie. The requirement of the EU about supporting of new members of a contest committee which completely is absent by the Ukrainian experts. In particular the power in every possible way counteracts entry into the commission the head of European Anti-Fraud Office Giovanny Kessler. In this aspect should be noted the outstanding maneuver of the president who is interested in putting “his person” to a position of the head of special anti-corruption prosecutor's office . And for this purpose he had all opportunities. The contest committee consists of 11 members: 7 are delegated by parliament, 4 – by the Prosecutor General`s Office of Ukraine. We will remind that the list of delegates of parliament includes the three members of BPP(President's party): Katerina Levchenko, Evgeny Nishchuk and Vladimir Gorbach. Together with Shokin's "four" the president have majority. However replacement of two members of Prosecutor General`s Office of Ukraine without Kessler's inclusion didn't suit the EU. As a result the presidential party initiated the resolution under which Kessler had to enter into the commission on the list of parliament, instead of the representative of Ministry of Justice of the USA Mary Butler, without having broken an alignment of forces in the commission. This resolution was withdrawn as the result. That’s why the commission on elections of the anti-corruption prosecutor wasn’t chosen and that question is still “in the air” , thanks to coped efforts of the President, head of the Prosecutor General`s Office of Ukraine and head of BPP Fraction.
2.5 Local elections
On November 25 in Ukraine were held local elections. And though we can see a real result of local elections only after the coalitions in local councils will be formatted – after all many parties acted as the franchise for this or that regional elite or financial groups, – but already now it is possible to say that the received results haven’t stabilized political system, and, on the contrary, created the additional centers of tension and vectors of opposition.
And the main problem is not only in the low turnout of voters, but first of all that, according to official information about elections in the regional councils, parliamentary parties having the deputy groups and fractions collected only 61% of votes in total. And it taking into account Vidrodzhennya as parliamentary party (5,4%) and artificial impossibility to vote for 2,5 million mainly critically adjusted citizens of Ukraine – temporarily displaced persons and inhabitants of front territories of Donbass. Really parliamentary parties collected no more than 50% of votes. And after all it is passed only one year after parliamentary elections.
Falling of ratings of the key parties in power is especially notable. Though the integrated BPP "Solidarity" collected 19,4% of votes against 21,82% in the 2014th, but then BPP in total with "Narodny Front" got support of 43,96% of voters. For comparison: The Party of Regions in the 2010th collected 36,21% of votes.
The same falling comprehended also one more party of the coalition – "Samopomoshch" who though expanded the geographical representation (16 regional councils), but from 10,97% in the 2014th year could keep only 6,3% – in the 2015th.
At the same time ,the political forces, which are actively criticize the power and de-jure or de-facto being in opposition, increased their results : "Batkivshchyna" (from 5,68% in the 2014th to 12,0% in the 2015th – all regional councils), "Oppositional Blok" (from 9,43% to 11,5% — 15 regional councils), "Vidrodjennia" (5,4% — 8 regional councils), Ukrop (7,3% — 19 regional councils), "Sboboda (from 4,71% to 6,7% — 15 regional councils). Strengthened the influence and any regional projects and projects-franchises for local elite: "Nash krai" (4,8% on average across Ukraine; 10 regional councils), Agrarian party (3,2%); Zakarpatye elections to a regional council were won by Uniform Center party, in Odessa – party of the mayor Gennady Trukhanov "Trust affairs"; good results showed local projects in Hmelnitsky, Cherkassk areas and Chernovtsy.
Thus, at the local level there was a situation, when:
The task set by the president – formation "pro-Ukrainian" (read "pro-presidential") coalitions – can be hard-hitting, and the local authorities in many regions pass to political opponents (obvious and latent) of the president;
The political balance in parliament doesn't correspond to public opinion – the real coalition consists of political forces with a rating in 19,4%, formal – 37,7%; a representativeness of all parliamentary political system – about 50% of the voting and less than 25% of citizens (at turnout of voters 44,62%);
If on October 25 were not local, but parliamentary elections, the president would had to form the coalition with the financial-political group's "Privat" political projects or Yulia Tymoshenko and probably to gave the prime minister's post to them. Therefore if the government don't be reformatted taking into account new political balance, it can become a key factor of helding new parliamentary elections;
Gradually the role of the regional elite which received a victory in Kharkov, Odessa, Zakarpatye, Hmelnitsky, Chernovitsy and Cherkassi areas are increased. This regional elite will demand more rights regarding financing and self-controll ability of regions. Whether the power is capable to make it with all conditionals of separatism is a big question;
It is necessary to understand that the relations between the center and regions can become aggravated practically at once – new local councils from the first meetings will join in the budgetary campaign. Therefore the "pro-presidential" coalitions are necessary for the president right now, and the situation with Gennady Korban shows all sharpness of this fight.
It is obvious that local elections created all prerequisites for new elections in parliament. And today parliament together with the government are the weakest and vulnerable links in the system of public administration. The insufficient social support, political and economic mistakes, absence of positive results of work increased by the changed political balance recorded by local elections have left to the president and key political leaders of Ukraine very few choices, except reformatting. Otherwise the conflictness in system will grow, and controllability – fall (together with ratings); there will be a situation when new elections will be necessary not only for the parliament, but also for the president.
Block 3. Economy
In general the situation in the economic sphere is extremely unfavorable: the economy is in a condition of stagnation, despite serious financial support of the western countries. So, on 3,September Ukraine obtained 200 million Euros credit from the Germany state Bank KfW.
On 16,September the NBU signed the contract on a currency swap with National bank of Sweden for $500 million.
On the same day Yaresko signed the credit agreement with the World bank for 500 million dollars. On October, 7 there was information that the IMF predicts growth of a gross public debt of Ukraine following the results of 2015 to 94,4% and the subsequent its decrease by 2020.
Purchasing power falls and that compels the population to sell currency savings. So in September Ukrainians sold 168 million dollars more, than bought, in October saling currency savings exceeded purchase for 104,7 million dollars.
The dynamics of the international rating agencies indicators shows the instability of the Ukrainian economic system that, except special economic factors, is caused also by political environment. Thus, in August, 27 Fitch rating agency lowered long-term ratings of Kiev and Kharkov in a foreign currency from CC to C, and in November announced the actual default of Kiev. In October, 6 Fitch announced long-term and short-term ratings of a default of the issuer (RDI) of Ukraine in a foreign currency of Ukraine to RD (a limited default).
It is remarkable that in October 19 the International rating agency Standard&Poor's raised sovereign ratings of Ukraine to "B-/B" with "SD/D". The Change of ratings is caused by completion of negotiations of the Ukraine government about restructuring of an external commercial debt which was completed in November 13.
However it is probably that the economic crisis reached the peak, and next year we will observe a certain improvement of key economic indicators. This is proved by not big ,but improvements of the inflation dynamics, and also forecasts of foreign partners and the Ukrainian state structures. So in October the index of inflation was 98,7, while in September was 102.3%. In September the index of industrial production was 105.9% in relation to August.
S&P predicts that real GDP of Ukraine according to results of 2015 will decrease approximately by 15% after reduction for 6,8% last year. In 2016 the rating agency expects the growth of economy by 2%. In 2017 - for 3,5% and in 2018 - for 4%. S&P claims that in 2016 inflation will be slowed down to 20%, in 2017 - to 14% and in 2018 - to 9%.
In 2 ,October the National bank of Ukraine improved the forecast of inflation for the next year. By results of 2015 falling of economic activity will make about 11,6%. The National Bank assumes delay of consumer inflation up to 44% at the end of 2015 and 12% in 2016. According to information of the World bank, following the results of the current year the index of inflation will be 50%, in 2016 - 23,4%, in 2017 - 9,9%, in 2017 - 7%.
According to the forecast of the IMF, in 2016 the Ukrainian national debt will decrease to 92,1% of GDP. Thus growth of economy and falling of a national debt to 76,9% of GDP in 2019 and 70,8% in 2020 is expected. Also the IMF expects that in 2015 the volume of expenses will be about 45% of GDP, however by 2020 this indicator will decrease to 42%.
At the moment a key problems in economic sphere are tax reform and the budget.
In September 14 the Cabinet of Ministers introduced the budget-2016 in Rada and on the same day withdrew it because of lack of tax reform. To be concrat-the existence of two its variants: from the Ministry of Finance and from parliament.
By estimates the project of the Ministry of Finance means a budget deficit in 60 billion UAH. In case of adoption the project of deputies - 200 billion. At any option of tax reform there are problems with serious deficiency, which can be blocked only by reduction of social payments and subsidies. However it is unlikely that the power will make it because of the fact of negative dynamics of its support. Also tax reform can become serious blow to decentralization, as any of its options reduces the income of local budgets, not to mention abput the lack of financial support of subsidized communities from the state budget that doesn't add the pluses for power. Actually in 2016 we will see serious problems with filling of local budgets that can escalate into a confrontation "center-regions", because of bad results of local authorities.
Ruslan Bortnik, Nikolay Strebkov for UIAMP