06/30/2015 Ukraine: Daily Highlights - "Naftogaz" suspended the purchase of natural gas from "Gazprom"

"Naftogaz" suspended the purchase of natural gas from "Gazprom"

06.30.2015 Daily Highlights by the Digests & Analytics Ukraine News Agency

Topics from Media and Social Networks

• Trilateral natural gas talks in Vienna were fruitless. "Naftogaz" suspended the purchase of natural gas from "Gazprom".
• The fire in the Chernobyl zone.
• Greece on the edge of default and possible withdrawal from the Eurozone.

Key Events In Ukraine

• The EU, Ukraine and Russia natural gas talks in Vienna ended without results, compromise is not reached for any of the points of the agreement. "Naftogaz" announced about suspension of purchases of natural gas from "Gazprom", starting from July 1. All import transit contracts are being performed in full.
  “Gazprom” continues to supply natural gas to the occupied Donbass, despite the refusal of Ukraine to pay for it, and it considers those volumes as the debt of "Naftogaz".
• The Verkhovna Rada is ready to lift the provision on the mandatory use of cash registers by private entrepreneurs with low incomes. The Parliament failed to adopt an important draft law on deregulation, aiming at  the abolition of the set of laws and codes.
  The Verkhovna Rada allowed to increase the rent on the land in the municipal and state property, which previously was limited to 12% of the normative monetary value.
  The Deputies called the changes to the law on elections to the Verkhovna Rada, offered by the representatives of the pro-presidential party, a lobbying of the interests of this political force and rejected the bill.
  MPs gave permission to arrest the Head of the Court of Appeals of Kiev.
• A trilateral meeting of the creditors' committee, representatives of the Ukrainian government and the IMF finished in Washington, D.C. Agreement was not reached, but the parties coordinated their positions on the issue of restructuring of the public debt of Ukraine and the anticipated ability of the country to repay the debt. According to Minister of Finance Yaresko, the  talks were purely of technical character, and her participation in them was not planned.
• The official hryvnia exchange rate against the major currencies did not change: 21.01 UAH/USD (-0.01 UAH),23.50 UAH/EUR (-0,04 UAH), 3.76 UAH/RUR 10 (-0 07 UAH).

Ukraine at War

• Head of the General Staff Muzhenko informed about the impending soon offensive of the militants. During the day they conducted a fighting reconnaissance in almost all directions. The positions of Ukrainian troops were shelled more than 50 times. Surrondings of Mariupol and Donetsk, Stanitsa Luhanska, Zolote and settlements on the "Bahmutka" route are remaining the flash points. According to the official reports, three soldiers were wounded. Ukrainian air reconnaissance discovered near Telmanovo  a large concentration of troops and machinery, which is considered a sign of the impending offensive.
• The OSCE mission report indicates that the parties to the conflict did not move away heavy weapons from the demarcation line in the Donbass and militants do not allow the observers to visit the machinery location sites and to inspect it. According to President Administration Speaker on the Anti-Terrorist Operation issues Lysenko, the removal of armoury with the caliber of less than 100 mm makes no sense, because the previous agreement on the withdrawal of the heavy weapons was not fulfilled.
• The power to the consumers in the Russian-occupied Crimea is supplied in the normal operation mode, despite the statements of the Ministry of Energy of the Russian Federation on the termination of power supplies from Ukraine to the Crimea.

Ukraine and the World

• Creditors prematurely stopped providing the financial assistance to Greece. During the negotiations, a compromise on the main contentious issues was not reached. The IMF confirmed that Greece did not transfer the next payment in the amount of € 1,5 billion. On July 10 the country has to pay almost € 2 billion to holders of the government bonds, and on July 20 - another € 3,5 bln to the European Central Bank. The next meeting of the creditors club is scheduled for July 1. The Government closed all banks and limited withdrawals at ATMs until July 2. If at referendum on July 5 the population votes to accept the creditors terms on introduction of the austerity program, the government will resign.
• It is not yet clear whether Greece is to announce a default, since such announcement is to be made by a borrower, not a lender. The EU and the IMF in 2010 provided to the country the loans for nearly € 250 billion. In 2012 a partial debt relief took place, but at the moment, the volume of the country's debt exceeds € 315 billion (175% of GDP).
• Talks on Iran's nuclear program, which were supposed to end on June 30 with the signing of a comprehensive agreement, were extended until July 7. The US Department of State called the delay in negotiating a simple technical extension of the set deadline for the achieving of the long-term outcome.
• Baltic countries consider a message about the Russian Federation investigation on the legitimacy of recognition of their independence a provocation.

The Trends

• Ukraine views the developments in Greece as one of the possible scenarios in the case of announcement of the sovereign default regarding the debt payment, the possibility of which is provided by the law on the moratorium on debt payments, adopted by the Verkhovna Rada in May.
• The restriction on beer market, coming into effect on July 1, levelling beer to alcoholic beverages, will reduce the manufacturers turnover through additional payments and more complex process of registration and advertising. For many retailers the new rules will become a reason for abandoning the sales. Market experts predict a rise in the price of beer and a reduction in consumption, which ultimately could lead to the decrease in budget revenues.
• According to experts, the text of the changes to the Constitution, prepared by the Administration of President Poroshenko, wasn’t the result of the work of the Constitutional Commission, the members of which were told after the fact. The text of changes  includes in the final part the provision on granting the special status to certain regions of the Donbass, which contradicts to the spirit of the whole document on the equality of citizens before the law, and is a result of a compromise in foreign policy, and not a consensus in the society. This can lead to the realization among the  citizens of the optionality  of the rules of the Constitution.