12/30/2015 Ukraine: Daily Highlights - The Minsk agreements are extended for 2016

The Minsk agreements are extended for 2016

12.30.2015 Daily Highlights by the Digests & Analytics Ukraine Agency

Topics from Media and Social Networks

• The Minsk agreements are extended for 2016.
• Ukraine sharply increased the prices for transit of the Russian natural gas.
• Power supply to the Crimea was stopped.
• A new Commander of the National Guard was appointed.

Key Events in Ukraine

• President Poroshenko appointed a new Commander of the National Guard, Lieutenant General Allerov, who served as Chief of the Western Command of the Internal Troops in times of former President Yanukovych.
• The National Commission on regulations in the area of energy supplies and utilities at the suggestion of Naftogaz, in accordance with the law on the natural gas market, changed the procedure for the formation of prices for the natural gas transit through Ukraine starting from the January 1, 2016 . The cost of transit for pumping through the cross-border pipelines was sharply increased and the will be determined by the entry points prices ($ 12.47 per 1000 m3) and exit points prices ($ 16- $ 33 per 1,000 m3). Earlier, the pumping price was $ 2.7 per 1000 m3 for each 1000 km.
• Prime Minister Yatsenyuk announced that the "Ukrnafta" company fully paid its debt by transferring to the budget UAH 1.77 billion of dividends.
• The Cabinet adopted a decree on the abolition from  2 January of the MFN treatment for some categories of Russian goods with simultaneous increase of duties, and on introduction from January 10 of an embargo on the delivery of a number of food and industrial  products . Counter sanctions will be imposed in case of introduction by Russia of the restrictions on trade with Ukraine from January 1, 2016.
• Farmers continue to protest against the abolition of exemptions in the taxation for agricultural producers. In protest they blocked the Kyiv - Chop highway , farmers threaten with mass demonstrations if the government keeps ignoring their demands.
• Finance Minister Yaresko expressed doubts in the IMF approval of the budget for 2016 and a package of "tax laws", adopted by the Verkhovna Rada , as the changes made by deputies in the voting process require further discussion with the Fund mission.
• Ukrainian Hryvnia enters the New Year with a rate close to that budgeted for the whole year: 24.00 ₴/$ (+0.21 UAH), 26.22 ₴/€ (+0.16 UAH), 3.29 ₴/10 ₽ (+0.01 UAH).

Ukraine at War

• The OSCE observers recorded the militants mortar shooting near Kominternove and Volnovakha. During just a day 31 ceasefire violations were recorded , mainly in the vicinity of Donetsk and in the Artemovsk.
• There was a power outage on the New Kakhovka - Titan line , which was used for electricity supplies to the Crimea.  Rolling blackouts began on the peninsula again . Head of Majlis Chubarov reminded the Ukrainian authorities that the contract for the supply of electricity to the Crimea ends on January 1, 2016.

Ukraine and the World

• The phone talks of the "Normandy Four" took place, during which it was agreed to extend the Minsk Agreements for 2016. The parties insist on elections in the occupied Donbass in the first half of 2016, for that the contact group should expedite the preparation of amendments to the Ukrainian electoral law. Nothing is known about signing of any documents as a result of the talks.
• SBU banned an entry to the country for Russian Deputy Prime Minister Rogozin, as well as for MEPs Korwin-Mikke, who visited the occupied Crimea without the permission of the Ukrainian authorities.
• Russian President Putin approved the suspension of the free trade zone with Ukraine from 1 January. The only exception was made for the export of the natural gas.
• President Poroshenko extended for 2016 the agreement with Malaysia on the investigation into the MH-17 flight disaster .
• In Russia, a law requiring the Crimean Ukrainian borrowers to repay debts to the creditors in rubles at the exchange rate as of March 18, 2014, came into force . The returned amounts will be preliminarily accumulated in a special account of the Russian Foundation for Depositors Protection and may be returned only after the accumulation of the total debt amount.
• "Zorya-Mashproekt" Nikolayev shipyard,  in accordance with the decision to ban the military-technical cooperation, ceased to supply the power units for Russian warships, which disrupted the program of the Navy construction. Deputy Prime Minister Rogozin said that Russia at accelerated pace creates its own production of such units.

The Trends

• Ukrainian public and experts believe that holding of the elections in the occupied territories of Donetsk and Lugansk regions according to the "Morel’s Plan" without full control over the border, withdrawal of Russian forces and illegal armed groups will lead to legalization of the "republics", transformation of the conflict into solely Ukrainian conflict and subsequent lifting of sanctions from Russia. The Donbass will remain a "flash point" and a reason to intensify the political tension in the country.
• The  Volia company bought the Normatek wireless operator , which holds the license for the frequencies in the range of 5 and 10 MHz across the country. This will allow Volia to become a leading national provider of wireless Internet access. During the first phase the project will be expensive, but in future it will allow to receive a profit from advertising to users, even with a free Internet access.