Analytical review of the week №133 from 03.10.2021.

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Аналитический обзор недели №133 от 03.10.2021г.

ANALYTICAL REVIEW OF THE MOST IMPORTANT DOMESTIC, FOREIGN POLITICAL AND ECONOMIC EVENTS OF THE WEEK

27.09.- 03.10.2021

CONTENT:

SUMMARY AND KEY TRENDS.

INTERNAL POLICY.

1. "Servants of the People" collected the required number of signatures for recalling D. Razumkov from the post of speaker.

2. The Venice Commission called for the urgent creation of an Ethics Council, which is being blocked by judges.

3. Congress of Local and Regional Authorities. V. Zelensky's statement on tariffs.

4. The government of Ukraine approved the strategy of "de-occupation of Crimea".

FOREIGN POLICY.

1. Mikhail Saakashvili returned to Georgia and was arrested.

2. Hungary signed a contract with the Russian Federation for gas supplies bypassing Ukraine.

3. Threat of aggravation of the conflict in Kosovo.

4. The results of the parliamentary elections in Germany.

ECONOMY.

1. The USA faces the first default: there is no funds for social benefits and debts .

2. China has declared all cryptocurrency transactions illegal.

3. Europe asked Russia to increase coal supplies. Gas continues to set records, already $ 1,160 per thousand cubic meters.

4. "Anti-Akhmetov" bill may turn into "pro-Akhmetov" because of the rent on the ore.

5. Tax amnesty: 1.6 million hryvnias were paid to the budget in 3 weeks.

SUMMARY AND KEY TRENDS.

Summing up the results of the outgoing week, we note the following:

First, in the domestic policy of the country, the course of administrative and economic strengthening of the power of the president and his entourage continues. In particular, this trend is continued by the initiative to resign the speaker of parliament. The president's office competes with D. Razumkov for influence on the political system.

Second, in order to avoid a tariff crisis, the central government is trying to shift the burden from the difference in tariffs to local budgets. In parallel, another PR story of victory (over the local authorities) is being formed on the tariff topic, which the team of V. Zelensky intends to appropriate.

Thirdly, the trend of confrontation between Western partners, the President's Office and the judiciary for influence on the country's judicial system continues. Indulging the demands of the ambassadors of the G7 countries, the Venice Commission called for the creation of an Ethical Council without delay, the formation of which is being blocked by judges.

Fourth, this week Hungary signed a 15-year gas contract with Russia, according to which most of its gas will be supplied via the Turkish Stream, bypassing Ukraine. Since October 1, transit through the Ukrainian GTS has already decreased due to this contract. The described transaction is a natural consequence of the inept energy and foreign policy of Ukraine over the past 7 years. Instead of looking for formats for the further use of its GTS (whether it be gas transportation consortia, modernization, etc.), Kiev gushed with political slogans. In addition to this, the Ukrainian authorities, for the sake of their own nationalist electorate, spoiled political relations with Hungary due to the infringement of the cultural and linguistic rights of the Hungarian national minority in Ukraine. This combination of failed actions by Ukrainian diplomacy and strategic planning in the gas industry resulted in a new Hungarian-Russian contract.

Fifth , the events that took place this week in Kosovo are part of the same trend as the flight of American troops from Afghanistan, or the tough reaction of France to the creation of a new military bloc AUUKUS, which took away a major contract for the supply of submarines for Australia. The name of this trend is the weakening of the influence of the United States in the international arena. Realizing what is happening, various actors in world politics "try their gut" at the key points of concentration of American influence. In the case of the Balkans, this is Kosovo, which was torn away from Serbia in 1999 with the assistance of NATO troops and where a large American military base is located.

Sixth , Europe, and in particular Germany, will pay record prices for gas and coal, mostly of Russian origin, due to its liberal ideology, one of which is the belief in green energy. In practice, it is unable to meet European energy needs, if only because of its high cost. The previous heating season emptied gas storage facilities in Europe, forcing it to buy gas at an ever-increasing price.

Seventh, “Metinvest” managed to defend his interests in relation to the "tax" bill No. 5600, in which it was planned to increase the rent for iron ore. As a result, if the draft law with the proposed amendments is adopted in the second reading, after the future fall in prices for ore in the world market, the deductions to the budget from the export of this type of raw material will decrease in comparison with the current indicators.

INTERNAL POLICY.

Briefly :

In the domestic policy of the country, the course of administrative and economic strengthening of the power of the president and his entourage continues. In particular, this trend is continued by the initiative to resign the speaker of parliament. The president's office competes with D. Razumkov for influence on the political system.

To avoid a tariff crisis, the central government is trying to shift the burden of the difference in tariffs to local budgets. In parallel, another PR story of victory (over the local authorities) is being formed on the tariff topic, which the team of V. Zelensky intends to appropriate.

Along with this, the trend of confrontation between Western partners, the Office of the President and the judiciary for influence on the country's judicial system continues. Indulging the demands of the ambassadors of the G7 countries, the Venice Commission called for the creation of an Ethical Council without delay, the formation of which is being blocked by judges.

1. "Servants of the People" collected the required number of signatures for recalling D. Razumkov from the post of speaker.

On September 30, the head of the Servant of the People faction, David Arakhamia, asked the speaker of the Verkhovna Rada of Ukraine Dmitry Razumkov for signature lists for his dismissal from office[1] . 150 signatures are required to start the procedure. Later it turned out that the faction did not give D. Arakhamia the authority to initiate the collection of signatures for D. Razumkov's resignation. Therefore, in the late afternoon, David Arahamia resubmitted his appeal to the speaker, but on his own behalf.

From October 1 to October 3, a meeting of the ruling faction was held in Truskavets, where the president, members of the government and heads of law enforcement agencies also arrived. Signature lists were received with the aim of taking them to Truskavets and there, using the authority and pressure of the President, as well as the heads of power structures on the deputies, to force them to sign for the speaker's resignation. Thus, all responsibility for the dismissal of the speaker will pass to the deputies. On Saturday, October 2, Deputies of the Servant of the People collected more than 150 necessary signatures for initiating the recall of Dmitry Razumkov from the post of Chairman of the Verkhovna Rada[2] .

For his part, Dmitry Razumkov invited MPs of the Servant of the People faction to a meeting to discuss his "unsatisfactory" work[3] .

It should be understood that after the resignation of A. Avakov, the head of parliament, remained the only alternative center of influence within the power team, and Bankovaia competed with D. Razumkov for influence on the political system. The initiative to resign the speaker continues the trend towards the consolidation of power in the hands of V. Zelensky and the OP.

The question of D. Razumkov's dismissal has arisen right now due to the fact that, in addition to the anti-oligarchic law, on the parliament's agenda today is a package of bills on the budget, agreements with the IMF, judicial reform, the Minsk agreements, as well as a new constitutional reform, which the OP wants to quickly pass through parliament while often ignoring procedures. The independent head of the ASU can be a serious problem in this process.

The resignation of D. Razumkov is unlikely to cause a split in the SN faction, although his support group and the group of sympathizers within the faction are quite large. At the same time, it can lead to an increase in mistrust within the faction and an increase in the conviction that the OP crushes everything under itself, creating a very monolithic regime of government in which parliament is not assigned any significant role.

The resignation of D. Razumkov entails an even more serious problem with the appointment of his successor. Indeed, today the potential successor, R. Stefanchuk, is not popular not only in parliament, but also within the mono-majority faction.

2. The Venice Commission called for the urgent creation of an Ethics Council, which is being blocked by judges.

This week, the trend continued for the confrontation between Western partners, the President's Office and the judiciary for influence on the country's judicial system.

On September 29, the head of the Venice Commission, Gianni Buquicchio, called on Ukraine to urgently create an Ethical Council, which will have to monitor the integrity of the members of the High Council of Justice[4] .

In particular, D. Buquicchio noted that Ukraine's international partners have already nominated their candidates to the Ethics Council. It is now imperative that the Council of Judges of Ukraine, without further delay, make its own appointments, which are necessary for the reform.

In total, the ethical council should have six members: three are elected by the Council of Judges of Ukraine, and three more - by certain international organizations. As a reminder, earlier on September 13, the Council of Judges of Ukraine could not get enough votes to elect three members of the Ethics Council, which blocked the main part of the judicial reform. Because without delegates from the Council of Judges, the Ethics Council will not be able to sit. Thus, the selection process for members of the High Qualifications Commission and the High Council of Justice, where the decisive vote was recently given to foreign experts, was blocked.

In general, the judicial reform provides for the transfer of key powers for the selection of members of the two bodies that govern the courts - the High Council of Justice and the High Qualification Commission of Judges - into the hands of “international experts”. Despite the external demonstration of readiness to carry out judicial reform according to the Western model, the Ukrainian authorities and the judiciary are not interested in such a scenario and are trying to delay the process as much as possible. The Venice Commission acts on the side of its Western partners in this matter. D. Buquicchio's statement is an attempt to put pressure on the president of Ukraine and direct the actions of the judges in the direction they need.

3. Congress of Local and Regional Authorities. V. Zelensky's statement on tariffs.

September 30, Kiev hosted a meeting of the Congress of Local and Regional Authorities under the President of Ukraine[5] .

During his speech, Vladimir Zelensky said that until the end of the heating season, tariffs for heat and hot water for the population will not increase, despite the "terrible price" for gas in Europe. Since the beginning of the year, gas prices in the EU countries have jumped four times, above $1,000 per thousand cubic meters. On September 20, Gazprom refused to book additional transit capacity through Ukraine, and also bought out only a third of the proposed transit capacity of the Yamal-Europe gas pipeline.

"But this is still patching holes. Therefore, I am waiting for a similar memorandum to appear. We have already started working with the local authorities. I would like us to have a memorandum not for one, but for the next three years. And so that there are no surprises for the citizens of Ukraine," - said V. Zelensky at a meeting of the Congress.

The corresponding memorandum will be signed by the government, NJSC Naftogaz of Ukraine, the Association of Ukrainian Cities and the Congress of Local and Regional Authorities. The Cabinet of Ministers achieved consent to such a step by agreeing to give an additional 4% of personal income tax to local budgets in 2022. For depressed cities, the memo promises a special subsidy from the government.

Earlier, at the beginning of the week, President V. Zelensky held a closed meeting with city mayors to discuss heating tariffs. The position of the central government is that the difference in tariffs should be paid by local budgets. In fact, the mayors will have to “zero out” their entire development fund and use it to compensate for the difference in tariffs. The state promised to return this money to the regions through the State Fund for Regional Development. At the same time, the mayors of the cities have little faith in the return of funds through the GRFR and therefore oppose such a scenario. In addition, this option is completely unsuitable for small towns. Through the GRFR, the issue of compensation will not be able to be closed throughout the country. It is expected that the central government will allocate compensation manually. And in this process, the loyalty of the regional elites to the government will not be the last. In addition, in the absence of a special draft law that would regulate the approach and the compensation formula itself, it will be difficult to verify how much was spent on compensation and what for other purposes. Accordingly, the situation additionally creates risks of corruption.

According to the estimates of the Association of Ukrainian Cities, local governments will have to spend from 25 to 40 billion hryvnias to maintain the previous tariffs. - depending on how much the gas price will rise.

In general, the tariff topic continues the general course of strengthening the power of the president and his entourage at the regional level.

The increase in tariffs can be very “painful” to hit the ratings of the president and his team. To avoid a crisis, the central government is trying to shift the burden from the difference in tariffs to local budgets. Along with this, with a manual compensation mechanism, it will be possible to "regulate" the loyalty of local authorities. At the same time, another PR story of victory is being formed on the tariff topic, which will be appropriated by the team of V. Zelensky.

4. The government of Ukraine approved the strategy of "de-occupation of Crimea".

On September 29, during a regular meeting, the government approved the Action Plan for the implementation of the strategy for the de-occupation and reintegration of the annexed Crimea.

Prime Minister D. Shmygal[6] noted that the document will become a comprehensive roadmap for the return of the Ukrainian Crimea. He also said that Ukraine is now working with partner countries and international organizations so that "the topic of Crimea was on the agenda."

The explanatory note to the strategy indicates that the document, among other things, aims to:

- defining the legal framework for transitional justice;

- the formation and implementation of policies in the legal, social, educational, informational, humanitarian and other spheres for the growth and strengthening of confidence, ensuring the rights and legitimate interests of Ukrainian citizens who suffered from the occupation of Crimea;

- ensuring sustainable socio-political, humanitarian and economic development in accordance with certain principles of domestic and foreign policy, the strategic course of the state in the direction of European and Euro-Atlantic integration.

Earlier, in March 2021, Ukrainian President Volodymyr Zelensky approved a strategy for the de-occupation of Crimea.

This document defines a set of diplomatic, military, economic, informational, humanitarian and other measures aimed at restoring the territorial integrity, state sovereignty of Ukraine within the internationally recognized borders through the de-occupation and reintegration of Crimea.

The strategy of de-occupation of Crimea is intended primarily for the domestic consumer. It will be used to define the “Crimean” discourse within Ukraine. But it is unlikely that this strategy will ever be implemented in practice, since the Ukrainian authorities have no real levers to ensure the effective reintegration of the peninsula.

FOREIGN POLICY.

Briefly:

Hungary this week signed a 15-year gas contract with Russia, according to which most of its gas will be supplied via the Turkish Stream, bypassing Ukraine. Since October 1, transit through the Ukrainian GTS has already decreased due to this contract. The described transaction is a natural consequence of the inept energy and foreign policy of Ukraine over the past 7 years. Instead of looking for formats for the further use of its GTS (whether it be gas transportation consortia, modernization, etc.), Kiev gushed with political slogans. In addition to this, the Ukrainian authorities, for the sake of their own nationalist electorate, spoiled political relations with Hungary due to the infringement of the cultural and linguistic rights of the Hungarian national minority in Ukraine. This combination of failed actions by Ukrainian diplomacy and strategic planning in the gas industry resulted in a new Hungarian-Russian contract.

This week's events in Kosovo are part of the same trend as the flight of American troops from Afghanistan, or the tough French reaction to the creation of a new military bloc AUUKUS, which took away a large contract for the supply of submarines for Australia. The name of this trend is the weakening of the influence of the United States in the international arena. Realizing what is happening, various actors in world politics "try their gut" at the key points of concentration of American influence. In the case of the Balkans, this is Kosovo, which was torn away from Serbia in 1999 with the assistance of NATO troops and where a large American military base is located.

1. Mikhail Saakashvili returned to Georgia and was arrested.

At the beginning of the outgoing week, ex-President of Georgia Mikhail Saakashvili announced his intention to return to his homeland and even showed an air ticket for a flight from Kiev to Tbilisi on October 2. On this day, local elections are held in the country.

The ex-president of Georgia urged his supporters to take to the streets after the closure of polling stations, "to defend ... the victory achieved," promising to be in Tbilisi.

According to the estimates of Saakashvili's enemies, for several years the promise to come in one form or another was made 16 times, but the ex-president did not keep his word. Therefore, his new communication caused great skepticism.

But on the morning of October 1, Saakashvili posted a video, as he said, recorded against the background of Batumi playing with lights at night.[7] .

He also called on his supporters to march to Tbilisi to defend the results of the October 3 elections, where he will also move, despite the threat of arrest.

Towards the evening of the same day, Saakashvili was detained in Georgia and is now in prison, from where he called on his supporters to show the maximum turnout in the elections.

According to the Georgian authorities, they do not intend to release the ex-president, since he has several sentences in absentia, according to which he must now serve his sentence in Georgian places of imprisonment.

This story most of all resembles M. Saakashvili's attempt to renew the interest of Georgian society in his party "United National Movement" on the eve of local elections. However, upon completion of the vote, it became apparent that this had not been successful.

Probably, now Saakashvili's supporters will try to promote the "Maidan" scenario, but they are unlikely to succeed in that either. As a result, it can be stated that the calculations of Mikhail Saakashvili to provoke protests by his return to Georgia and the subsequent inevitable arrest have low chances of being justified.

2. Hungary signed a contract with the Russian Federation for gas supplies bypassing Ukraine.

On September 27, Hungary signed a new long-term contract with Russia's Gazprom. According to him, gas supplies will go to the country bypassing Ukraine[8].

The contract between Russia and Hungary is designed for 15 years with the possibility of revising the terms after 10 years.

As follows from the agreement, Hungary will receive 4.5 billion cubic meters of gas a year, of which 3.5 billion cubic meters - through Serbia through the Turkish Stream gas pipeline and its overland extensions that bypass the territory of Ukraine. The remaining 1 billion cubic meters Hungary will receive through Austria - as before, when all transit went through Ukraine.

Note that in 2020, Gazprom supplied Hungary with 8.63 billion cubic meters. meters of gas, and in 2019 - 10.5 billion cubic meters. In the first half of 2021, supplies increased by 5% to 3.9 billion cubic meters. m.

Currently, the bulk of Russian gas supplies to Hungary go through Panrusgaz (a joint venture between Gazprom and the Hungarian energy trader MVM). In 1996, two long-term contracts for the supply of natural gas to Hungary were signed between Gazprom Export and Panrusgaz for the period until 2015, then they were extended until 2021. Within the framework of these contracts, supplies are carried out in two directions - through the points of Beregovo on the Ukrainian-Hungarian border and Baumgarten on the Slovak-Austrian border[9] .

In addition, since October 2018, Gazprom Export has been supplying gas to Hungary through its subsidiary WIEE Hungary Kft on the basis of short-term contracts. Also, to ensure additional gas supplies to Hungary in 2019, short-term contracts were concluded with MET International AG.

Kiev harshly criticized the new agreement, calling the decision "exclusively political, economically unjustified and taken to please the Kremlin." The Ukrainian Ministry of Foreign Affairs stated that the agreement does not comply with the principles of the Treaty on the Foundations of Good Neighborliness and Cooperation between Ukraine and Hungary of December 6, 1991.

"We are surprised and disappointed by the decision of Hungary to sign a new long-term contract with the Russian concern Gazprom on September 27 in Budapest for gas supplies bypassing Ukraine, " the Ukrainian Foreign Ministry said in a statement.

Foreign Minister Dmitry Kuleba went even further and stated the following, quote:

“ Hungary has dealt a blow to Ukrainian-Hungarian relations by excluding the Ukrainian gas pipeline from the scheme of gas supplies from Russia. This is a blow. And we must answer it accordingly[10] ".

The Foreign Minister stressed that after such actions of Budapest "there can be no regrets and condolences."

The only thing that is evidenced by this pretentious rhetoric, for which, in recent years, the Ukrainian Foreign Ministry is especially famous, is the complete failure of work both in the gas transit direction in general and in the Hungarian direction in particular.

Not only that, over the past 10 years, while the northern and Turkish streams were being built, Ukraine decisively did nothing in order to confirm its reputation as a reliable transit country; not only did it instead throw hysterics in the international arena, putting forward deliberately unrealizable demands to Western partners; so she also began to infringe on the cultural rights of the Hungarians of Transcarpathia for the sake of the nationalist-minded part of the electorate, which caused an extremely negative reaction from Budapest.

Now gas transit through the Ukrainian GTS, which will already be under threat after 2024, has dropped significantly since October 1.

The most important thing to understand about the Hungarian-Russian gas contract is that Hungary will now receive gas at a stable and agreed price for 15 years. This will allow the Hungarian industry to continue not to depend on speculative surges in prices on the gas exchange and to plan its activities for many years to come.

In Ukraine, at this time, a law is in force, according to which prices for industry and consumers must correspond to prices on the exchange at any given moment, that is, completely depend on international gas speculators. And the fact that this law is only partially implemented does not really change the situation.

Of course, in a situation of choice between a country where the price of gas and related services is fixed 15 years ahead, and a country where it can jump to 1000 USD at any moment. That is, and above, foreign investors will choose the first one to locate their enterprises.

3. Threat of aggravation of the conflict in Kosovo.

Last week, the Kosovo authorities banned the use of Serbian license plates in the territory under their control. Serbian license plates were removed from the cars, replacing them with temporary Kosovo ones.

To enforce the new rules, the Kosovar authorities have introduced special forces units into northern Kosovo (where mostly Serbs live).

Serbs responded by staging a civil protest by blocking checkpoints with their cars[11] .

After that, Pristina pulled in additional forces to the north - this time the police arrived in armored vehicles, equipped with heavy equipment and automatic weapons. They began to violently suppress Serb protests.

Three Serbian citizens were dragged out of the car by the Kosovo special forces and severely beaten, although they had nothing to do with the protests. Also, the Kosovar police and special forces, under the cover of snipers, occupied the border crossings "Yarine" and "Brnjak" in the north of the region.

In response, Serbia began deploying heavy equipment near the border with Kosovo. Military aircraft and helicopters began patrolling the airspace over Kosovo checkpoints.

The European Union expressed concern. EU High Representative Josep Borrell said both Belgrade and Pristina should immediately withdraw special forces from northern Kosovo and eliminate checkpoints.

According to Serbian President Aleksandar Vucic, the occupation of the north of Kosovo and Metohija by Pristina special forces continues for the 7th day "under the loud silence" of the international community. Further quote:

He stated that Serbia did not cross the border of Kosovo, since it adheres to the 1999 agreements. But he made it clear that he would not endure what was happening for long.

It is worth noting that almost a week after these statements, the parties managed to de-escalation and withdraw their troops from the contact line.

Analyzing what is happening in Kosovo, it should be noted that these events are part of the same trend as the flight of American troops from Afghanistan, or France's tough reaction to the creation of a new military bloc AUUKUS, which took away from it a major contract for the supply of submarines for the needs of Australia. The name of this trend is the weakening of the influence of the United States in the international arena.

Realizing what is happening, various actors in world politics "try their gut" at the key points of concentration of American influence. In the case of the Balkans, this is Kosovo, which was seized from Serbia in 1999 with the help of NATO troops and where a large American military base is located. At the same time, it should be understood that the actions of local Albanian "politicians", such as attempts to suppress the Kosovo Serbs or introduce new license plates, are in this case just a pretext. The Kosovar Albanians have been terrorizing and defeating the local Serb population for over 20 years. At the same time, the Serbian troops were pulled to the border only now.

This circumstance allows us to assume that the real reason for what was happening this week is that Serbia, like many other countries, quite unambiguously caught the main trend of modern international politics, and decided to gradually revive the agenda of returning what Washington unjustly took away from it. being at the peak of its power.

4. The results of the parliamentary elections in Germany.

The parliamentary elections in Germany have become one of the most anticipated and discussed events in the world community in recent weeks. They took place on September 26.

The formal winners were the Social Democrats, with 25.7% of the vote according to official results - about 5 percentage points more than in the previous elections in 2017[12] .

For many, this success of the SPD came as a surprise, given the fact that in the spring the party's rating was about 15%. It is believed that the Social Democrats were drawn to the leaders of the electoral race by their leader and main contender for the post of Chancellor Olaf Scholz.

At the same time, the gap between the first and second places was less than two percent, which gave reason to the candidate from the so-called "conservative" CDU / CSU bloc Armin Lashet to also claim the role of the leader of the future ruling coalition. However, the result of 24.1% is the worst in the history of the party bloc, which in 13 out of 19 elections to the Bundestag received more than 40% and never less than 30%.[13] .

The third place with a result of 14.8% is taken by the Soyuz 90 / Greens party. This is significantly more than in 2017 (8.9%), but much less than expected by this party, which for the first time in history also nominated its own candidate for chancellor - its co-chair, Annalena Berbock. In May, the Greens had the highest party rating, reaching 28%.

The Liberal Free Democratic Party (FDP) slightly improved its result compared to 2017 (10.7%) to 11.5%.

The result of the right-conservative Alternative for Germany turned out to be worse than four years ago: it gained 10.3% instead of 12.6%. Even more serious losses were incurred by the Left Party, which received only 4.9% of the vote (in 2017 - 9.2%), and did not overcome the 5% barrier. However, the left will be able to form its own faction in the Bundestag, since three candidates have received direct mandates from them.

The turnout in the elections was about 76% and remained practically at the same level as in 2017.

The results of the elections, in principle, allow resuming the government coalition of the last 8 years, but with a change of roles - the main one for the Social Democrats, and the pseudo-conservatives from the CDU / CSU are the junior partners. But this option is still excluded by both Olaf Scholz and Armin Laschet.

In these conditions, the most realistic are two triple alliances - the "greens" and the liberals with the Social Democrats and Chancellor Olaf Scholz, or they are with the CDU / CSU and head of government Armin Lashet.

Which of these two options will ultimately become a reality will be revealed in the probing negotiations, which will be led by representatives of these four political forces in the coming weeks. In the meantime, all parties managed to declare their intention to form a coalition and a new government before Christmas. Given the complexity of the configurations, this process can be delayed.

For Ukraine, whatever the outcome of the coalition talks in Germany, it is unlikely that anything will change in relations with Berlin. The leader of the winning SPD, Olaf Scholz, is a consistent supporter of a peaceful settlement in Donbas based on the Minsk Agreements, which Kiev has recently openly rejected and criticized.

Also, all parties that entered the Bundestag, except for the Greens, adhere to the position of the necessity and expediency of the Nord Stream 2 gas pipeline for Germany. This means that the hopes of the Ukrainian Foreign Ministry that the already completed gas pipeline will not be exploited for political reasons are collapsing.

At the same time, it cannot be said that in recent years Germany has had a decisive influence on Ukrainian politics. In Berlin, rather, they sought to distance themselves from Ukrainian affairs, realizing that the process of a peaceful settlement in Donbass had long come to a standstill. We believe that after the formation of the coalition, Germany's position on Ukraine will not change in any way.

ECONOMY

Briefly:

Europe, and in particular Germany, will pay record prices for gas and coal, predominantly of Russian origin, due to its liberal ideology, one of which is the belief in green energy. In practice, it is unable to meet European energy needs, if only because of its high cost. The previous heating season emptied gas storage facilities in Europe, forcing it to buy gas at an ever-increasing price.

"Metinvest" managed to defend their interests in relation to the "tax" bill number 5600, which was planned to increase the rent for iron ore. As a result, if the draft law with the proposed amendments is adopted in the second reading, after the future fall in prices for ore in the world market, the deductions to the budget from the export of this type of raw material will decrease in comparison with the current indicators.

1. The USA faces the first default: there is no funds for social benefits and debts .

On September 28, US Treasury Chief Janet Yellen sent a letter to Congress leaders warning that the US would reach a "debt ceiling" on October 18, which could lead to a default of the country[14].

The USA is constantly confronted with this situation due to the nature of the emission of the US dollar. The Federal Reserve System (FRS) issues the dollar in exchange for the bonds of the US Federal Government. Thus, the US domestic debt is growing. To avoid default, Congress must vote to raise the debt ceiling. Thus, a similar situation around a possible US default happens often, and all the media hysteria is whipped up specifically to rush the American bureaucratic apparatus.

2. China has declared all cryptocurrency transactions illegal.

On September 24, the People's Bank of China (Central Bank) declared all financial transactions with cryptocurrencies illegal[15]. Those participating in such transactions will face criminal prosecution. The PRC authorities believe that cryptocurrencies contributed to money laundering.

In recent years, trading in bitcoin and other cryptocurrencies has "undermined the economic and financial order" in the PRC and "contributed to money laundering , illegal capital raising, fraud and other criminal activities," according to the Central Bank of China. According to him, such operations threaten the safety of citizens' property.

Cryptocurrency trading and issuance has been banned in China since 2019. Such measures are part of the Chinese government's policy to control the financial activity of private companies.

3. Europe asked Russia to increase coal supplies. Gas continues to set records, already $ 1,160 per thousand cubic meters.

On September 30, the American edition of Bloomberg published an article stating that “Europe is asking for more coal from Russia[16] ”. The energy shortage in Europe is so high that, following the rise in natural gas prices, the demand for coal began to grow, despite Germany's many years of striving to provide its economy with “green” energy. The shortage of gas and coal in the European market is partly due to increased demand in China. In the structure of coal imports to Europe, Russia occupies 50 percent, and the United States - only 17%. The price for 1 ton of coal has reached an unprecedented level of USD 200.

On September 30, gas futures on the London ICE Futures exchange continued to rise in price and crossed the mark of $ 1160.55 per thousand cubic meters[17]. December contracts show even higher quotations - up to 94.96 euros per MWh (1162.51 dollars per thousand cubic meters). The main reason for the deficit is the too cold last winter and the subsequent emptying of storage facilities in Russia and the EU. The giant Groningen gas field in the Netherlands is likely to close three years ahead of schedule. Thus, it becomes clear that Germany is interested in Nord Stream 2. True, the majority of consumers in Europe have long-term gas supply contracts with Gazprom, an average of 200 euros per 1,000 m3, and high energy prices are a problem so far only for a small part of consumers and an object of financial speculation.

4. "Anti-Akhmetov" bill may turn into "pro-Akhmetov" because of the rent on the ore.

September 29, the Ukrainian edition "Economic Pravda", referring to its sources in the Tax Committee of the Verkhovna Rada, wrote on how, by the second reading, in the bill No. 5600 there were norms, thanks to which the tax burden on iron ore mining may become even less than before its adoption[18]. According to the changes that were approved by the relevant parliamentary committee for the second reading of the bill, in the event of a fall in world prices for ore, the real income of rent to the budget may be even less than before the adoption of the "anti-Akhmetov" bill.

This effect is provided due to the fact that the deputies propose to reduce the taxable rent based on the costs of transporting ore from the Ukrainian port "Yuzhny" to the Chinese port of Qingdao, as well as on costs associated with internal logistics. According to the calculations provided to the EP by a source in the Tax Committee of the Rada, in the event of a drop in world prices for ore to $ 90 per ton and below, the income from rent to the budget will be even less than it is now. So, with the price of ore at $ 90 per ton, the income from the rent will amount to UAH 3.8 billion, $ 80 - UAH 3.2 billion, $ 70 - UAH 2.6 billion. At the same time, according to the current norms of the Tax Code, even in the event of a fall in world prices for ore, budget revenues in any case will amount to UAH 5.7 billion. Now world prices for ore are about $ 117 per ton. If Bill No. 5600 was adopted, such a price level would have provided the budget with rent in the amount of UAH 7.7 billion, which is UAH 2 billion. more than now.

However, given the downward trend in ore prices in the world, the adoption of this bill may in the future reduce Metinvest's tax costs. In addition, in the version of Bill No. 5600 approved for the second reading, the norms on the introduction of excise duty on green energy, the largest producer of which in Ukraine is Akhmetov's DTEK, have disappeared. Also, from the latest version of the bill, the norms on the abolition of privileges for mining enterprises have disappeared, and they want to reduce the environmental tax on mining emissions from 200% to 10%.

Although the Verkhovna Rada adopted bill No. 5600 in the first reading on July 1, 2021, the deputies made more than 11 thousand amendments to the second reading - mainly to delay the consideration of the document. Previously, the second reading of the bill was supposed to take place on September 23, but the document was removed from the parliament's agenda. Thus, R. Akhmetov managed to defend his interests. Moreover, before that he was on good terms with the Office president.

5. Tax amnesty: 1.6 million hryvnias were paid to the budget in 3 weeks.

On September 29, the head of the tax committee of the Verkhovna Rada, Daniil Getmantsev, during a round table "Tax amnesty: how to get through without stumbling," organized by the EP, said that 33 million hryvnias had been declared within the framework of the tax amnesty for 3 weeks in September. and paid the budget UAH 1.6 million[19] . From 2022, according to D. Getmantsev, the so-called anti-offshore law, which was adopted in January 2020, will start working in the country. This law runs the risk of repeating the fate of the anti-oligarchic, that is, declaring lofty goals, but in fact reducing all activities to the fight against political opponents.

A small amount of money paid to the budget within the framework of the tax amnesty, which started on September 1, 2021, is caused by the fact that with the help of this instrument the state wants to compensate for the budget deficit at the expense of a business in the shadows. Potential participants in the tax amnesty understand this. As a result, instead of withdrawing capital from the shadows, the authorities will achieve their more thorough disguise (transition to cash, gold, or cryptocurrencies).

Edited by:

Ruslan Bortnik,

Daniil Bogatyrev.

Authors:

Daniil Bogatyrev,

Oksana Krasovskaya,

Andrey Timchenko.

[1] https://zn.ua/POLITICS/arakhamija-zaprosil-u-razumkova-podpisannye-listy-za-eho-otstavku.html

[2] https://interfax.com.ua/news/political/771272.html

[3] https://news.liga.net/politics/news/razumkov-priglasil-nardepov-slugi-naroda-obsudit-ego-neudovletvoritelnuyu-rabotu

[4] https://www.venice.coe.int/webforms/events/?id=3214

[5] https://news.pn/ru/politics/260913