November 24, 2016

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Sanctions on Russia to remain in place

OTTAWA – U.S. President Barack Obama met in Berlin on November 18 with the leaders of Germany, France, Italy, Spain and the United Kingdom. The White House stated, “The leaders also took stock of the conflict in eastern Ukraine. They unanimously agreed on the continued need for Russia to fully meet its commitments under the Minsk agreements and that Ukraine-related sanctions against Russia must remain in place until it does so. The leaders expressed concern over the continued lack of a durable ceasefire and reaffirmed the importance of creating a security environment that is conducive to moving forward with free and fair local elections in the occupied regions of Donetsk and Luhansk.” (Ukrainian Canadian Congress Daily Briefing)

Obama wants Ukraine deal

PRAGUE – U.S. President Barack Obama says he wants to reach a negotiated peace settlement in Ukraine before he leaves office in January. During a wide-ranging press conference in Peru on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit, Mr. Obama also criticized Iran and Russia’s role in Syria’s brutal civil war. Mr. Obama said he talked with Russian President Vladimir Putin on November 20 about Ukraine and the “need for us to get things done.” He added, “I urged him to instruct his negotiators to work with ourselves, with France, with Germany, with Ukraine to see if we can get that done before my term is up.” U.S. President-elect Donald Trump’s election victory has been met with trepidation in Kyiv because of the billionaire’s praise for Mr. Putin. Mr. Obama also urged Mr. Trump to retain U.S. support for a liberal world order, warning world peace and prosperity depended on it. “The main advice that I give to the incoming president is the United States really is an indispensable nation in our world order,” Mr. Obama said. (RFE/RL, with reporting by AP and AFP)

IMF statement on mission to Ukraine

OTTAWA – An International Monetary Fund mission was in Kyiv on November 3-17 to discuss the third review of the economic reform program under the Extended Fund Facility. The IMF stated on November 18: “The mission held constructive discussions with the authorities on policies needed to complete the third review under the EFF arrangement. While good progress has been made, the authorities need some more time to implement policies to ensure medium-term fiscal sustainability, including adoption of the 2017 budget consistent with program…” The IMF said that, “After a difficult period, the Ukrainian economy is showing welcome signs of recovery. Decisive policy actions in the past two years have led to a dramatic reduction in external and internal imbalances. Inflation has been successfully brought down, the central bank’s international reserves have increased substantially, and growth is expected to reach 1.5 percent in 2016 and pick up to about 2.5 percent in 2017. The strength and durability of the recovery, however, depend crucially on the implementation of ambitious reforms to support Ukraine’s transition to a full-fledged market economy.” The IMF also stated: “Turning the current stabilization into strong and sustainable growth – so that Ukraine can catch up with its regional peers – will not be an easy task. This has been a challenge in the past, when stop-and-go reforms resulted in the repeated buildup of large imbalances and economic crises. The authorities should remain united in their determination to continue to advance reforms, resisting populist pressures and overcoming opposition from vested interests. Decisive steps particularly need to be taken to fight corruption, which remains the most frequently mentioned obstacle to doing business in Ukraine. While there has been progress in setting up new institutions, including the National Anti-Corruption Bureau of Ukraine, and the publication of high-level officials’ asset declarations was a major step, tangible results in prosecuting and convicting corrupt high-level officials and recovering proceeds from corruption have yet to be achieved.” (Ukrainian Canadian Congress Daily Briefing)

Ukrainian PM praises economy

KYIV – Ukraine’s prime minister has said the country’s economic situation has improved and the government intends to increase pensions and wages. In an exclusive interview with RFE/RL’s Ukrainian Service on November 16, Prime Minister Volodymyr Groysman said Ukraine’s economy has now grown for three consecutive quarters. He also noted that the Fitch ratings agency had raised Ukraine’s rating on November 12, meaning that the country is no longer “in a pre-default situation.” As a result, the government will raise pensions by 10 percent in December and double the minimum wage beginning in January. “We got this growth thanks to the work of Ukrainian citizens,” Mr. Groysman said. “In this difficult period, the people have demonstrated patience through such painful transformations. Now I believe, and it is my deep conviction, that the worst is behind us. We have to go forward and build a qualitatively new country.” (RFE/RL’s Ukrainian Service)

NATO Parliamentary Assembly on Ukraine

OTTAWA – On November 19, lawmakers from NATO’s Parliamentary Assembly (PA) adopted reports urging NATO nations to “stand firm in supporting Ukraine and maintain a strong stand against Russian belligerence.” A report adopted by the NATO PA’s Political Committee stated: “It is clear that conditions for an improved relationship currently do not exist; that Russia’s foreign policy priorities and the values underpinning these priorities remain in fundamental conflict with those of NATO. Through its actions and rhetoric, Russia continues to unsettle the European security environment and undermine the stability upon which Alliance security depends.” Lawmakers stated that Western support for Ukraine is “key to thwarting Russian destabilization efforts.” A report adopted by the NATO PA’s Committee on the Civil Dimension of Security “called on NATO nations to increase financial and expert assistance to support reforms in Ukraine and help its struggle for independence and territorial integrity. Given Russia’s continued illegal occupation of Ukraine’s southern Crimea province and continued aggression in eastern Ukraine, lawmakers said it was no time to relax Western sanctions.” (Ukrainian Canadian Congress Daily Briefing)

Canadians train Ukrainian forces 

OTTAWA – Canada’s Department of National Defense reported that, “After many months of preparation and discussion between the Canadian Armed Forces (CAF) and Ukrainian Armed Forces (UAF) flight safety authorities, a three-week Ukraine Flight Safety Course (UFSC) took off smoothly on November 7, 2016, at the National Land Forces Academy in Lviv, Ukraine.” The release noted that 34 candidates from Ukraine’s army, and naval and air forces are attending this course “specifically designed to meet the needs of Ukraine’s military.” A specialized agency of the United Nations, the International Civil Aviation Organization, helps states cooperate “in support of the safe, secure and efficient operation of the global air transport network by codifying the principles and practices of international air navigation, flight inspection, border-crossing procedures, and air accident investigations,” the release explained. “The CAF specialists will facilitate delivery of the online course and will administer the five mandatory tests needed to receive the ICAO certificate on their behalf. …The flight safety initiative is one of seven different Operation UNIFIER lines of effort to build capacity within the UAF.” As of November, the Canadian Armed Forces have provided more than 2,300 training opportunities to Ukraine’s soldiers and officers via Operation UNIFIER. (Ukrainian Canadian Congress Daily Briefing)

Ukraine, Russia differ on soldiers’ detentions

PRAGUE – Russian Foreign Affairs Minister Sergei Lavrov has said Ukraine’s detention of two Russian servicemen was “an illegitimate provocation.” Mr. Lavrov made the comment on November 22 in the Belarusian capital, Minsk, two days after the pair were detained by Ukraine’s security services. Moscow claimed the soldiers were seized in the Russian-annexed Crimean Peninsula and called for their “immediate return.” However, the Security Service of Ukraine said the two were apprehended after crossing into Ukrainian-controlled territory. They are accused of being deserters who defected to Russia from the Ukrainian army after Crimea was annexed by Russian forces in March 2014. Earlier this month, Russian officials said they had arrested five suspected members of a Ukrainian “saboteur group” in Crimea. Kyiv called the claim “another fabrication.” (RFE.RL, based on reporting by Reuters, TASS and Interfax)

Spanish villas of Poroshenko et al

KYIV – Along the picturesque shores of Estepona in southern Spain’s Costa del Sol lie some of Europe’s most elegant resorts and luxury estates, whose owners and residents include Hollywood actors, superstar athletes, and some of the continent’s political elite. But the list of property owners also includes Ukrainian President Petro Poroshenko; Ihor Kononenko, a deputy head of the president’s Bloc of Petro Poroshenko party and onetime business partner; and Oleh Hladkovskyy, a deputy secretary of the Ukrainian National Security and Defense Council. Each of those three men owns a lavish Mediterranean-style villa on or near the coast – and in Mr. Kononenko’s case, a second plot of land, too. But none of the properties is enumerated in those public officials’ publicly searchable asset declarations that came due on October 30 as part of a new, International Monetary Fund (IMF)-backed push to boost transparency and root out graft, according to an investigative program of RFE/RL’s Ukrainian Service, Skhemy (Schemes), that aired on November 10. Instead, the declarations of Mr. Poroshenko, a confectionery mogul before his rise to the presidency of war-torn Ukraine in mid-2014, and Messrs. Kononenko and Hladkovskyy include companies that in turn own the Spanish homes – effectively rendering them invisible from public view. Documents obtained by Skhemy show Mr. Poroshenko’s Spanish-registered Feruvita S.L. – listed in the president’s declaration – bought a 23-year-old villa in Estepona in the summer of 2008, when he headed the Council of Ukraine’s National Bank. In the financial statements, the value of the two-story, 1,254-square-meter villa and grounds, complete with swimming pool, is estimated at 4 million euros ($4.3 million). The gated, white-columned villas belonging to Messrs. Kononenko and Hladkovskyy were discovered by Skhemy journalists within short driving distances of Mr. Poroshenko’s property. Mr. Kononenko also owns a second parcel of land on the coastline where a house was demolished in 2012, apparently to make way for a new one. Daria Kalenyuk, executive director of the Kyiv-based NGO Anticorruption Action Center, told RFE/RL that an independent investigation should be conducted by Ukraine’s National Agency for the Prevention of Corruption to determine whether Messrs. Poroshenko, Kononenko or Hladkovskyy violated Ukrainian law by not declaring the villas directly in their declarations. “If the villa is not used for the company’s commercial activity, it should have been declared,” Ms. Kalenyuk said. Responding to Skhemy’s request for comment, Mr. Poroshenko’s office said: “The enterprises in which Petro Poroshenko is the ultimate beneficiary have overseas property such as factories, shops, warehouses, administrative buildings, and houses. All this is in the form of legal entities specified in his declaration in accordance with the Law ‘On Prevention of Corruption.’” Ruslan Radetskyy, the deputy head of the National Agency for the Prevention of Corruption, told Skhemy that the language in the law was specific enough. “[The declarant] must specify all property that belongs to him, through a company or as an individual,” he said. Yehor Sobolyev, co-author of the declaration law and head of parliament’s anticorruption committee, agreed. “In my opinion, there is evidence of breach of the law ‘On Preventing Corruption’ by the president of Ukraine, who did not declare the villa in Spain in his electronic declaration,” he told Skhemy. “The explanation from representatives of the presidential administration that the owner of the villa is not the president, but a company that he controlled, is incorrect.” (Christopher Miller of RFE/RL, based on the reporting of RFE/RL’s Skhemy investigative unit and the First Ukraine channel in Kyiv)

Fitch raises Ukraine’s credit rating

WASHINGTON – Fitch Ratings upgraded Ukraine’s debt rating to B- from CCC on November 11, citing easing financial pressures following Kyiv’s receipt of loans from the International Monetary Fund. Fitch said it expects solid growth to return to Ukraine next year, now that the IMF released $1 billion of loans in September after a long delay due to concerns about Kyiv’s implementation of reforms against corruption. “Macroeconomic stability has improved… as reflected by rapidly declining inflation, slower currency depreciation, and a mild growth recovery,” Fitch said. Ukraine suffered a deep recession last year amid its battle against Russia-backed separatists in the country’s east, with its economy contracting by 9.9 percent. Fitch said it expects growth to accelerate to 2.5 percent in 2017 and 3 percent in 2018, from a projected 1.1 percent this year. Inflation is expected to average 14.9 percent in 2016, down from 48.5 percent in 2015, and the central bank is working on implementing an inflation-targeting policy to cut interest rates to 5 percent by 2019. However, “political risks remain significant,” Fitch said, and the rating assumes that the conflict with separatists does not escalate. (RFE/RL, based on reporting by AFP and TASS)

Savchenko to Trump: ‘strengthen’ sanctions

KYIV – Ukrainian lawmaker Nadiya Savchenko has urged U.S. President-elect Donald Trump to “strengthen sanctions” against Russia. In her letter posted on Facebook on November 10, Ms. Savchenko urged Mr. Trump to provide Ukraine with the “diplomatic, technical and military support” to fight Russia’s aggression. Ms. Savchenko said the current standoff between Kyiv and Moscow over Russia’s annexation of the Crimean Peninsula and its support of pro-Russia separatists in eastern Ukraine was reminiscent of the situation in Europe before World War II. “I want to add that you have all the possibilities to prevent World War III,” Ms. Savchenko wrote. A former military aviator, Ms. Savchenko spent nearly two years in Russian custody before she was released and returned to Ukraine in May. She was elected to the Verkhovna Rada in 2014 while being held in Russia. During his election campaign, Mr. Trump said he might look into the possibility of lifting U.S. sanctions imposed on Russia over its actions in Ukraine. (RFE/RL)

Mogherini on EU policy toward Russia

BRUSSELS – EU foreign policy chief Federica Mogherini says the European Union will not change its policy towards Russia even if the United States were to alter its position under the administration of incoming president Donald Trump. She said the EU has “a very principled position on the annexation of Crimea and the situation in Ukraine” that was not going to change “regardless of possible shifts in others’ policies.” Ms. Mogherini made her comments after a special EU foreign ministers’ meeting in Brussels on November 13 to discuss the results of the U.S. presidential election. Mr. Trump’s praise of Russian President Vladimir Putin has raised concerns that he may soften U.S. policy toward Moscow and perhaps ease economic sanctions against Russia. The EU has also imposed economic sanctions against Russia over its involvement in Ukraine. Ms. Mogherini added that Brussels continues to have “effective dialogue” with Russia on many international issues, including the Iranian nuclear deal. She said the nuclear deal – which was signed last year – is a multilateral agreement endorsed by a U.N. Security Council resolution and that it is in the interest of Europe and the U.N. to guarantee that the deal is “implemented in full.” Mr. Trump said during the presidential campaign that it was a “terrible” deal that only benefitted Iran and that he would “tear it up” if he were elected president. (RFE/RL, with reporting by TASS)

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