12/03/2015 Ukraine: Daily Highlights - NSDC has approved the defense budget for 2016 in the amount of 5% of GDP

NSDC has approved the defense budget for 2016 in the amount of 5% of GDP

12.03.2015 Daily Highlights by the Digests & Analytics Ukraine Agency

Topics from Media and Social Networks

• NSDC has approved the defense budget for 2016 in the amount of 5% of GDP.
• Minister of Information Policy Stets resigned.
• Prime Minister Yatsenyuk visited а US aircraft carrier.
• Retired SBU general Tretiak defected to DPR terrorists.

Key Events in Ukraine

• NSDC approved the defense budget for 2016 in the amount of UAH 113 billion (5% of GDP). According to NSDC secretary Turchynov, Ukraine is studying Russian operations in Syria to prepare for possible air strikes.
• Head of Naftogaz Kobolev hopes the negotiations with Gazprom on natural gas prices for the first quarter of 2016 would resume already in December. Next year, Ukraine expects to import from Romania up to 1 billion m3 of natural gas.
• Head of the State Property Fund Belous said their was no large-scale privatization of state enterprises in 2015, since the current legislation does not provide for transparent sales.
• Despite the lack of evidence, the court extended the period of detention for activist Medvedko accused of killing anti-Ukrainian journalist Buzina.
• IMF Resident Representative in Ukraine Vacher said that the draft Tax Code developed by the parliamentary committee and civic experts was contrary to the objectives of the Fund’s cooperation program, as it may lead to a deficit exceeding the program’s targeted parameters.
• Hryvnia has grown significantly on the interbank market: 23.09 ₴/$ (-0.56 UAH), 24.64 ₴/€ (-0.46 UAH), 3.41 ₴/10 ₽ (-0.14 UAH). Тhe exchange rate offered by exchange offices has not changed and exceeds the official rate by over 1 UAH.

Ukraine at War

• Militants continue shelling the positions of the Ukrainian Army in the conflict area in Donbas near Donetsk and Artemivsk and in Mariupol direction. Ukrainian military occupied two settlements in the "gray zone." According to official reports, three soldiers were wounded.

Ukraine and the World

• European Commissioner for Foreign Affairs Mogherini announced the beginning of negotiations with Serbia on joining the EU on December 14.
• Foreign ministers of Serbia, Germany and Switzerland at an OSCE meeting called on all parties to the conflict in Donbas to ensure the complete cease-fire and stressed that Minsk agreements should be fully implemented.
• Ukraine's Foreign Ministry protested against the unagreed visit of Russian President Putin in the occupied Crimea.
• In his annual address to the Federal Assembly, Russian President Putin accused Turkey of trading with terrorists. He said that Russia would not use military force, however, the restrictive measures against Turkey would be applied not only in the economic area. Putin thanked Russian troops in Syria and said that the threat of terrorism was growing. According to him, by incorporating Crimea, Russia declared itself as an independent country with a millenium-long history. He never mentioned the war in Donbas. Putin believes that the economic situation could continue for a long time due to low commodity prices, but sees positive trends in the Russian economy. Russia plans to develop import substitution and provide itself with own food by 2020. Putin proposed to extend the amnesty to capital returning to Russia for another six months, as business was not in a hurry to take advantage of this opportunity.
• The US Department of State rejected the proposal of the Russian Federation to create a new coalition against the Islamic State, saying that Russia could join the existing efficient alliance.
• According to NSDC Head Turchynov, Ukraine would not introduce a visa regime with Russia because of a large number of Ukrainian migrants present on the Russian territory.
• The European Commission will allocate €100 million to support the decentralization reform in Ukraine.

The Trends

• The Cabinet of Ministers’ report to the Parliament on the results of the year of work is schedule for December 11. According to experts, the resignation of Prime Minister Yatsenyuk, despite the obvious failure to implement reforms, solve social problems and comply with most promises is not in the interests of both main factions of the Verkhovna Rada, since it could lead to the parliamentary crisis and re-election. At the same time, a significant renewal of the Cabinet of Ministers is possible. Some observers believe that the Presidential Administration will try to strengthen its positions in the government, but foreign partners are afraid of the excessive consolidation of the positions of the President after the example of Yanukovych.