25-31/08/2014 Ukraine: Weekly Highlights - Ukrainian troops and volunteers have been encircled and suffered heavy losses - The campaign for elections to the Verkhovna Rada has started in Ukraine.

25-31.08.2014 Weekly Highlights by “Digests & Analytics Ukraine” News Agency

War in Ukraine

• Completion of the negotiations in Minsk was marked by direct Russian military aggression against Ukraine. The fact that the invasion of the Russian Federation was confirmed by NATO and the EU. USA stated that Russia will pay a heavy price for the invasion. Russian troops strikes were directed toward of Mariupol, Starobeshevo, Ilovaysk, Snezhnoe and Lugansk. The Russian army is using heavy armor and artillery, unmanned drones. Documented cases of attacks from the air of the Ukrainian units and vessels. Russian soldiers and military vehicles appeared in Lugansk and Donetsk. According to some reports, in Ukraine are fighting about 10 thousand Russian soldiers and officers, twice as much concentrated in the border areas. President Poroshenko canceled his official visit to Turkey for the inauguration of
  President Erdogan in connection with the invasion, and enacted the secret National Security Council decisions.
• Deployment of Russian troops and heavy equipment has turned the tide of military operations in the Donbass. Near Ilovays’k, Ukrainian troops and volunteers have been encircled and suffered heavy losses. Some fighters have managed to break through the encirclement and to connect with the main forces. During the fighting, the Ukrainian army has captured some Russian troops, which were exchanged for the Ukrainian military POWs.
  Under the pressure of superior numbers of Russian forces Ukrainian army left the strategic hilltop Savur-Mohyla, city Novoazovs’k on the Rostov-Odessa highway, Starobesheve and Haschuvate. Military units defending international airports of Donets’k and Luhans’k are under massive attacks.
  Residents of Mariupil’ are building fortifications around the city and are preparing to repel the attack of the Russian troops.
• Civilian infrastructure in the cities under the control of terrorists and Russian forces is systematically destroyed. Chaotic and indiscriminate shelling of residential areas kill innocent civilians. Smelters and mines has stopped working. Financial system is not working. Pensions and public sector wages are not paid. Power outages are leading to stopping of pumping water from the mines, which threatens flooding entire cities and environmental catastrophe.

• Dnipropetrovs’k Regional State Administration is building a complex of fortifications to protect the region from possible invasion of Russian troops from the Donbass, and helps to strengthen the borders of Zaporozhye region.
• National Security Council said that in the autumn of 2014 the official military draft will be renewed.
• Enterprises of "Ukroboronprom" have moved to three-shift operation, which will increase the production of military products up to 40%.
• Kiev is preparing for a long war. Basing on existing facilities seven intensive care hospitals are getting created. The city is surrounded by checkpoints. Winter school holidays are planned to stretch one and a half months to save on heating.

Economy

• The official hryvnia exchange rate has held steady low. During the week it has made the absolute minimum - to 13.89 UAN/$1, 18.32 UAN/1€. With the introduction of the sale of 100% of foreign exchange earnings, administrative measures with regard to the foreign exchange market, direct negotiations by the head of the National Bank Gontareva and currency interventions the hard landing of Ukrainian currency has been avoided.
• The IMF agreed to give Ukraine the next tranche of the stabilization loan of $ 1.4 billion to cover the budget deficit and replenish foreign exchange reserves.
• The National Commission on the radio communications is ready to allocate frequencies for 3G standard to three Ukrainian mobile operators.
• Russia, in preparation for legal proceedings in the Stockholm arbitration, invited Ukraine to return to the old system of payment for the supply of gas with a floating discount and to repay existing debt for gas.

Politics

• President Poroshenko dissolved the Verkhovna Rada and set the date for early parliamentary elections for October 26. The elections will be conducted as per the old elections law, that enables collaborationist forces from former Party of Regions and Communists Party to penetrate the new parliament; also closed lists of candidates are preventing citizens from knowing who’ve been nominated by respective parties. Elections committee chair Ohendovsky claimed that the elections will cost 1 bln. UAH and will be funded from the Governmental reserve fund. 438 out of 450 deputies will be elected to the Verkhovna Rada, as 12 majority voting districts are located in occupied Crimea. Deputies from other parties flee to the presidential party «Solidarnist», recently renamed to «Poroshenko Block». Acting Prime Minister Yatsenyuk and Parliament Speaker Turchunov, who’ve left the «Batkivshyna» party of Yulia Tymoshenko, created their own party.
• High level negotiations held in Minsk in the format Ukraine-the EU-Eurasian troika haven’t produced any results. Russian President Puitn insisted on changing the text of the Ukraine-EU association agreement. Ukrainian part claimed that the text will be adopted in the current version.
• UN Security Council has blocked Russian resolution on fixing the situation in Donbas., Russian representative Churkin has claimed that «Russian volunteers» are fighting in Ukraine.
• Urgent meeting of the NATO-Ukraine Commission prepared the ground for the alliance decisions on Ukraine during the coming September summit in Wales.
• Yatsenyuk Government introduced to the Parliament a proposal of the law on change of the non-allied status of Ukraine, selection of NATO and the EU course and prohibition to participate in any post-Soviet economic, political and military unions.
• Decision on further sanctions against Russia have been blocked by Czech Republic, Slovakia, Hungary and Cyprus during the EU summit in Brussels. Sanctions against the energy sector are not being planned. At the same time the EU will provide Ukraine with 1 bln. EUR  and technical support. However, Germany and France informed about their unwillingness to supply arms to Ukraine. This doesn’t exclude supply from the other states.