03/03/2015 Ukraine: Daily Highlights -President Poroshenko created the Constitutional Commission for the implementation of the Minsk Agreements

03/03/2015 Daily Highlights by the "Digests & Analytics - Ukraine" News Agency

Topics of the Day

President Poroshenko created the Constitutional Commission for the implementation of the Minsk Agreements. Natural gas and heating tariffs will rise sharply. US extended sanctions against Russia for next year. National Bank raised interest rates to a record 30%.

Key Events of Ukraine

• President Poroshenko created the Constitutional Commission and offered speaker of the Parliament Groisman to be its head.
• President Poroshenko signed laws on volunteer association of local communities and public access to information about the use of state funds.
• Parliament's session disrupted due to scuffle between the leader of the Radical Party Lyashko and a former member of his faction, the commander of the volunteer battalion "Aydar" Melnychuk, which have moved to the faction led by a former member of the Party of Regions.
• The Cabinet of Ministers has established that the heating season will be starting on October 1 and runs until April 30. Since April 1 gas tariffs for heat suppliers will increase  2.2 times. Natural gas tariffs for cooking increased six times - up to 7188 UAH per 1000 m3, regardless of the consumed volume.
• The National Commission for regulation in the energy and utilities sectors obliged "Naftogaz" to publish a financial plan and the main indicators of cash flow.
• Minister of Justice stated that a draft law on the complete ban on the Communist Party and the Communist and fascist ideology will be passed to the Parliament soon. The trial to ban the Communist Party resumed.
• The prosecutor's office raided the office of traffic police of Kiev in order to seize documents about the persecution of "AutoMaidan"  activists during the protests in 2013-2014.
• Bloomberg News published a list of the most troubled economies in the world, based on indicators of unemployment and inflation. Ukraine is ranked fourth from the end,  Venezuela named the worst ranked.
• National Bank raised interest rates from 19.5% to 30% whereas already issued  stabilization loan rates remain the same. Overnight loans rate rises to 33%, loans must be fully secured by T-bills. The amount of required banks reserves increases since March 10. As early agreed with the IMF increase in the monetary base in 2015 is allowed in the amount of 91 billion UAH. These money will be used for crediting the Deposit Guarantee Fund of individuals and toughly restricting the growth of government bonds in the portfolio of the National Bank. This means minimal support of "Naftogaz" and the state budget. The extensive use of sterilization instruments to absorb excess liquidity in the banking system for leveling of inflationary pressures is planned, as well as a uniform transfer of National Bank profit to the budget in order to prevent the destabilization of the financial market.
  National Bank continues rehabilitation of large banks. including "Kreditprombank", "Omega Bank" and "Delta Bank" (counted as one of the largest), which nationalization is not planned. Bank "Cambio will be liquidated .
  The requirement to sell 75% of foreign currency received by exporters extended.
• According to the head of the NBU Gontareva, a program of cooperation with the IMF is based on the FX rate of 20-22 UAH/USD. The official rate of hryvnia against major currencies increased: 24.83 UAH /USD (-2.04 UAH), 27.87 UAH/EUR (-2,31 UAH), 3.99 UAH/10 RUR (-0.39 UAH).

Ukraine at War

• The positions of the regiment "Azov" in Shirokino near Mariupol were under rebels mortar fire. The militants violated the ceasefire regime more than 20 times during the day, three Ukrainian soldiers have been killed.
  According to the General Staff information, anti-tank artillery with caliber of 100 mm have been moved away the battle line.
  Militants do not allow OSCE observers to monitor the movement of their heavy weapons. ATO speaker said that Russian troops and militants are regrouping and restoring their equipment under the guise of withdrawal of heavy weapons after  Debaltseve capturing.

Ukraine and the World

• President Obama extended sanctions against Russia for the next year because its aggression against Ukraine continues to pose a threat to the national security and foreign policy of Washington. During the videoconference between leaders of Italy, France, Germany, Great Britain and the head of the European Commission it was decided to take additional tough measures against Russia in case it will fail Minsk Agreement.
• The new head of the Pentagon Carter said the United States will develop additional missile and anti-missile systems in case that Russia will breach agreement on the elimination of short- and medium-range Nuclear Forces (INF).
• Russia has confirmed its participation in the meeting of the "Normandy Four" on the crisis in Ukraine, which is scheduled for March 6 in Berlin.
• PACE President Brasseur called on the Russian leadership to spare the life of the Ukrainian deputy Savchenko, which continues her hunger strike in a Moscow jail. Ukrainian Foreign Ministry put responsibility for Savchenko’s life of on Russia.

The Trends

• Experts said that the increase of terms of the heating season by the government  following the increase in gas tariffs for population is an attempt of forcible administrative fund withdrawals from consumers and useless waste of natural gas.
• Experts and the public believe that the amendments to the Constitution, initiated by the President Poroshenko in accordance with paragraph 11 of the Minsk agreements is abuse of power and the surrender of national interests in case of Russia and militants non-compliance.