SITUATION IN UKRAINE: May 26 - June 2, 2023

This week, the Russian Federation continued to implement the strategy of missile terror. So now every day Ukraine is subjected to intense and frequent shelling by the Russian Federation using different types of missiles and drones. In particular, the city of Kyiv suffers from air attacks, where alarms are heard almost every day or night. According to official information, most of the rockets and drones aimed at Kyiv can be shot down, but their fragments sometimes fall into residential areas of the city or the roadway, which leads to the destruction of buildings, injuries, or death of people. Debris damage was recorded in Kyiv, Odesa, and Lviv regions. Explosions were also heard in Kharkiv and Dnepropetrovsk and other regions.

If in February the Russian Federation carried out massive attacks on average from 60 to 80 missiles every one or two weeks, now it is from 20 to 40, but almost every day. According to the statements of the military command of Ukraine, it is possible to shoot down more than 90% of air targets (missiles and drones). Previous estimates of Russia's ability to continue this kind of strike, by officials and many military experts, have been underestimated.

By air attacks on Ukraine, the Russian Federation seeks to achieve several goals: to destroy the resources and reserves that are prepared for the Ukrainian counteroffensive (stocks of ammunition, fuel, destroy logistics hubs), and one of the main goals is Ukrainian air defense systems Patriot air defense systems. Also, the Russian Federation seeks to keep Ukrainian society in a state of deep stress and provoke social psychoses associated with constant air raids and missile strikes. In general, the stressful state of society will harm the economic, political, and social life of the country. It will lead to an outflow of human capital from cities and industrial centers. It is possible that this could lead to tension within the government team. With strikes on Ukraine, the Russian Federation also demonstrates its military capabilities to Western countries.

At the same time, Ukraine is trying to “stretch” the front line and transfer active hostilities to Russian territory to realize its advantage in the size of the army, pull back Russian reserves from the occupied Ukrainian territories and politically destabilize the Russian Federation. So, in the Russian Federation, visits by sabotage and reconnaissance groups and active artillery shelling are recorded in the border area, in the city of Shebekino in the Belgorod region of Russia, and others. On May 30, a massive drone raid was also recorded in Moscow (in some media and TG channels, 30 drones are reported). There is confirmation of 3 explosions in residential buildings in Moscow.

In addition, the border areas of the Belgorod region are being attacked by armed groups. Thus, the RF Ministry of Defense stated that they had already repulsed three attempts to invade the region, undertaken by forces of up to two motorized infantry companies, reinforced with tanks. The authorities of the Russian Federation have not yet confirmed the crossing of the state border from Ukraine. Responsibility for such attacks are claimed by the so-called “Russian Volunteer Corps”, which claims that they are fighting in the suburbs of Shebekino: the villages of Nova Tavolzhanka and Titovka (which is difficult to confirm).

At the front, the RF Armed Forces have practically stopped advancing in all directions, but local military operations continue in the Kupyansky, Limansky, Bakhmut, and Maryinsky directions. This “calm before the storm” relates to the preparations by the parties for the announced large-scale Ukrainian counteroffensive.

In terms of information, E. Prigogine continues to actively criticize the Russian elite of the military command. At the same time, the harsh rhetoric of E. Prigozhin is likely part of the strategy of V. Putin and his entourage. His statements create a social demand for the cleansing and reformatting of the Russian elites, which is beneficial to V. Putin himself since some of them prevent him from ruling the country alone.

Concerning the peace negotiation process, there are two main groups of negotiators in the world. The first, led by China (which includes Turkey, the Vatican, and third-world countries) insists on cessation of hostilities and resumption of negotiations, such a position implies the loss of part of its territories by Ukraine and is more beneficial to the Russian Federation. The second group (Ukraine, the United States, and European countries) adheres to the position of de-occupying all the occupied territories of the Russian Federation, and only after that, it is possible to start negotiations with the Russian Federation.

President of Ukraine V. Zelensky said that until the Russian Federation leaves all Ukrainian territories, Kyiv will not even think about peace negotiations with Moscow.

Information is spreading in the Western press that the United States and the EU are allegedly persuading the President of Ukraine V. Zelensky to soften the conditions on which he can negotiate with the Russian Federation. Probably, this concerns the issue of the de-occupation of Crimea, in Western countries opinions were often expressed that Ukraine would not be able to liberate the peninsula. Also, the United States is allegedly set to end the hot phase of the war as soon as possible, since this may negatively affect President D. Biden in the elections in 2024. And the G7 countries are working covertly on security guarantees for Ukraine in the event of a cessation of hostilities and the resumption of peace negotiations. Thus, negotiations on Ukraine's accession to the European Union can already take place at the upcoming EU summit in December 2023.

But even if the development of such guarantees for Ukraine does take place, to a large extent the situation with peace negotiations and the degree of possible compromises for Ukraine will depend on the situation at the front and the progress of the Ukrainian counteroffensive (success or failure).

But the situation regarding the start of the counteroffensive remains not yet completely clear. In Ukraine, they insist first on receiving combat aircraft (F-16 fighters), as well as the required amount of heavy equipment and long-range missiles. Also, Ukraine considers significant risks of a political and military nature that may arise in the event of a failure of the counter-offensive.

May 2023 The monetary filling of the budget of Ukraine from domestic revenues exceeded the funding of international donors. Thus, internal resources for May amounted to UAH 205.1 billion. (Compared to April - UAH 112.8 billion). At the same time, international assistance amounted to $3.25 billion or UAH 119 billion. (Compared to April - $5.55 billion or UAH 203 billion).

Together with international assistance and loans, UAH 324 billion was attracted to the Budget. (UAH 315.8 billion in April). Financing of the state budget through international assistance in May 2023 is now around 37% compared to 65% in April. Recall that at the end of 2022, it was 50-55%.

Since 2023, the country’s budget has already received $19.75 billion. Thus, on average, since the beginning of the year, Ukraine has received about $4 billion per month. By the end of the year, Ukraine expects to receive more than $40 billion. from 3 to 5 billion dollars. Thus, the country's budget deficit is still covered by internal and external revenues, while filling the budget with domestic revenues has increased to 63%.

The World Bank estimates that direct losses to Ukraine's housing sector amount to $39.2 billion. Recovery needs - $ 69 billion (as of 06/1/2022).

According to the information of the regional military administrations, as of the end of 2022, more than 169 thousand objects were damaged or destroyed, of which:

  • 17 thousand - apartment buildings

  • 132 thousand are private houses.

The Parliament proposes to extend the permission for education in minority languages (whose languages are the official languages of the European Union) from September 1, 2023, to September 1, 2024. The Verkhovna Rada has registered the relevant draft law No9332 on the regulation of certain issues of educational activities under martial law.

Probably, this legislative initiative is intended to postpone the solution to the issue, but at the same time reduce the degree of dissatisfaction and criticism from the representatives of the EU (especially Hungary). Since Ukraine is now initiating negotiations on accession to the European Union, which may take place already at the upcoming EU summit in December 2023.

In general, the issue of education of representatives of national minorities in their native language in Ukraine remains unresolved, for which the Ukrainian government has been repeatedly criticized by neighboring European countries (especially Hungary). The Law on National Minorities, which was adopted by the Verkhovna Rada in December 2022 does not solve the issues of the full use and study of the language by national minorities. All the restrictions that are present in the existing legislation have been preserved, in the law “On Ensuring the Functioning of the Ukrainian Language as the State Language” and the law “On Education”.

Military situation

Combat actions.

The situation in the Kharkiv region: In the Kupyansk direction, attacks were repulsed near the settlements of Masyutivka, Krokhmalne.

In Donbas: The Armed Forces of the Russian Federation stopped actively advancing in the Limansky, Bakhmutsky, and Maryinsky directions. The main local clashes are taking place in the areas of the cities of Bakhmut and Marinka. Attacks of the RF Armed Forces repulsed in the area of settlements Bilogorivka, Novoselivske, and Stelmahivka in the Luhansk region. In the Donetsk region attacks were repelled - in the areas of the settlements of Ivanivske, Peremoha, Novomykhailivka, Pivnichne, Gorikhovo-Vasylivka, and Bila Gora.

The situation in the South: without significant changes.

Black Sea-Azov direction: without significant changes.

Russian missile attack on Ukraine.

Over the past week, Ukraine has been subjected to intense and frequent shelling by the Russian Federation using various types of missiles and drones. Kyiv suffers from air attacks, where alarms are heard almost every day or night.

According to official information, most of the rockets and drones aimed at Kyiv can be shot down, but their fragments sometimes fall into residential areas of the city or the roadway, which leads to the destruction of buildings, injuries, or death of people. Debris damage was recorded in Kyiv, Odesa, and Lviv regions. Explosions were also heard in the Kharkiv and Dnepropetrovsk regions.

On May 26, in Dnipro, a medical facility was hit - a psychiatric hospital and a neighboring veterinary clinic, there were hits on the territory of two large enterprises.

On the night of May 28 (when Kyiv celebrated City Day), a record-breaking attack on Ukraine in terms of the number of launched drones took place - 59 Shahids. 58 of them, according to the Ukrainian military command, were shot down. 40 of them were shot down over Kyiv. In Zhytomyr, a hit on an infrastructure facility was confirmed.

On May 29, in the Khmelnytskyi region, there was a hit on a military airfield in Starokostiantyniv, which damaged five aircraft and the runway.

On May 30, in Kyiv, debris again fell in several districts of the city, in the Golosiivsky district, the floors of one of the skyscrapers were destroyed and a woman died. More than 50 complaints about damaged houses and apartments have been recorded in the Kyiv region.

The headquarters of the Main Directorate of Intelligence on Rybalsky Island was also subjected to rocket attacks; the Ukrainian authorities did not comment on the arrival at this facility. Kirill Budanov, head of the GUR, commented on the next shelling of Kyiv, promising the Russian Federation a quick response.

On June 1, Kyiv was again shelled (at night and in the morning). According to the official authorities of Kyiv, in polyclinic No. 3 of the Desnyansky district, where rocket fragments fell, people failed to get into the shelter during the alarm, due to which 3 of them died. The police opened criminal proceedings on this fact. After the rocket attack in Kyiv, the authorities canceled all events for Children's Day.

Air Force spokesman Yuri Ignat opined that Russia has stockpiled missiles, which is why its strikes have become more frequent. “Now the frequency of strikes has increased, but the number of missiles has decreased. When the Russians had a break in the spring, they accumulated a stock of missiles,” Yu. Ignat explained.

If in February the Russian Federation carried out massive attacks on average from 60 to 80 missiles every one or two weeks, now it is from 20 to 40, but almost every day. According to the statements of the military command of Ukraine, it is possible to shoot down more than 90% of air targets (missiles and drones).

By air attacks on Ukraine, the Russian Federation seeks to achieve several goals: to destroy the resources and reserves that are prepared for the Ukrainian counteroffensive (stocks of ammunition, fuel, destroy logistics hubs), one of the main goals is Ukrainian air defense systems, in particular, Patriot air defense systems. Also, the Russian Federation seeks to keep Ukrainian society in a state of deep stress, which is provoked by constant anxieties and blows. In general, the stressful state of society will harm the economic, political, and social life of the country. It will lead to an outflow of human capital from cities and industrial centers. It is possible that this could lead to tension within the government team. With strikes on Ukraine, the Russian Federation demonstrates its military capabilities to Western countries.

At the same time, “ arrivals ” are recorded in the Russian Federation along the border territory, the city of Shebekino in the Belgorod region of Russia. There were shellings in the area of Berdyansk controlled by the Russian Federation - they are talking about a strike in the area of the Azovcable plant. On May 30, a massive drone raid was recorded in Moscow (in some media and TG channels, 30 drones are reported). There is confirmation of 3 arrivals in residential buildings in Moscow.

 

Combat map.

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Domestic policy.

The economic situation in the country.

In May 2023 the monetary filling of the state budget from domestic revenues exceeded the funding of international donors. Thus, internal resources for May amounted to UAH 205.1 billion. (Compared to April - UAH 112.8 billion)

Including the tax - UAH 101 billion. (+9% of the planned volume or + UAH 8.4 billion) and customs - UAH 34.3 billion. (+0.2% of the planned volume).

At the same time, international assistance amounted to $3.25 billion or UAH 119 billion. (Compared to April - $5.55 billion or UAH 203 billion).

Together with international assistance and loans, UAH 324 billion was attracted to the Budget. (UAH 315.8 billion in April).

Financing of the state budget through international assistance in May 2023 is now around 37% compared to 65% in April. Recall that at the end of 2022, it was 50-55%.

Since 2023, the country’s budget has already received $19.75 billion. Thus, on average, since the beginning of the year, Ukraine has received about $4 billion per month. By the end of the year, Ukraine expects to receive more than $40 billion. from 3 to 5 billion dollars

Thus, the country's budget deficit is still covered by internal and external revenues, while the filling of the budget at the expense of domestic revenues has increased to 63%.

Since the beginning of the war, according to the NBU, the hryvnia has devalued by more than a quarter, which is why Ukraine maintains a stable demand for cash dollars. In exchange offices, the average exchange rate is in the range of 37.4-37.8 UAH / USD. According to the NBU, banks set a record for the delivery of cash dollars to Ukraine. For 4 months of 2023, when banks brought $3.2 billion into the country at once, which is 1.7 times more than the same period in 2022, and 3 times more than in 2021. According to forecasts, banks will supply $9.7 billion to the country in 2023, which is 1.6 times more than in 2022.

The World Bank estimates that direct losses to Ukraine's housing sector amount to $39.2 billion. Recovery needs - $ 69 billion (as of 06/1/2022).

According to the information of the regional military administrations, as of the end of 2022, more than 169 thousand objects were damaged or destroyed, of which:

  • 17 thousand - apartment buildings

  • 132 thousand are private houses.

The Parliament proposes to extend the permission for education in minority languages until September 1, 2024.

The Verkhovna Rada has registered bill No. 9332 on the regulation of certain issues of educational activities under martial law. The law should ensure the rights of persons belonging to the national minorities of Ukraine, whose languages are the official languages of the European Union, and who began to receive general secondary education before September 1, 2018, in the language of the respective national minority. The deputies are proposing to extend the permit for education in minority languages (whose languages are the official languages of the European Union) from September 1, 2023, to September 1, 2024.

In general, the issue of education of representatives of national minorities in their native language in Ukraine remains unresolved, for which the Ukrainian government has repeatedly been criticized by neighboring European countries, especially Hungary. After the adoption under President Petro Poroshenko of a new law “On Education”, which launched mechanisms for the gradual abolition of education in the native language, except for Ukrainian, the confrontation between Budapest and Kyiv on this issue escalated. The Law on National Minorities, which was adopted by the Verkhovna Rada in December 2022 does not solve the issues of the full use and study of the language by national minorities. All the restrictions that are present in the existing legislation have been preserved, in the law “On Ensuring the Functioning of the Ukrainian Language as the State Language” and the law “On Education”.

Probably, the legislative initiative to extend education in minority languages until September 1, 2024, is intended to postpone the solution to the issue, but at the same time reduce the degree of dissatisfaction and criticism from EU representatives. Since Ukraine is now initiating negotiations on joining the EU. In March, Prime Minister Denys Shmyhal said that Ukraine had complied with all seven EU recommendations needed to start such negotiations. EU accession negotiations may take place at the upcoming EU summit in December 2023.

The situation around Ukraine.

Peace negotiations.

In general, concerning the process of peace negotiations, there are two main groups of negotiators in the world. The first, led by China (which includes Turkey, the Vatican, and third-world countries) insists on cessation of hostilities and resumption of negotiations, such a position implies the loss of part of its territories by Ukraine and is more beneficial to the Russian Federation. The second group (Ukraine, the United States, and European countries) adheres to the position of de-occupying all the occupied territories of the Russian Federation, and only after that, it is possible to start negotiations with the Russian Federation.

President of Ukraine V. Zelensky said that until the Russian Federation leaves all Ukrainian territories, Kyiv will not even think about peace negotiations with Moscow. " We are not even ready to think about it until Putin withdraws his troops from Ukraine. First, they must withdraw their troops from Ukraine, and then we must think about the format, and how to talk to them further: in what format, who should be a witness, and with whom, in general, one can talk from that side. There is no trust," Zelensky said.

Information is spreading in the Western press that the United States and the EU are allegedly persuading the President of Ukraine V. Zelensky to soften the conditions on which he can negotiate with the Russian Federation. Probably, this concerns the issue of the de-occupation of Crimea, in Western countries opinions were often expressed that Ukraine would not be able to liberate the peninsula. Also, the United States is allegedly set to end the hot phase of the war as soon as possible, since this may negatively affect President D. Biden in the elections in 2024. And the G7 countries are working covertly on security guarantees for Ukraine in the event of a cessation of hostilities and the resumption of peace negotiations. Thus, negotiations on Ukraine's accession to the European Union can already take place at the upcoming EU summit in December 2023.

But it seems that the leaders of European countries do not yet support Ukraine's accession to NATO (the terms and guarantees were not announced). President of Ukraine V. Zelensky said that hopes for joining NATO " are becoming more and more distant." During his visit to Moldova, he stated: " Our hopes are becoming more and more distant, and I'm sorry that I must express this disappointment here, both on behalf of the soldiers who are fighting for freedom and on behalf of our people. The time has come for decisions. NATO's summit this summer calls for the admission of Ukraine as a member. We need a peaceful summit."

But even if the development of such guarantees for Ukraine does take place, to a large extent the situation with peace negotiations and the degree of possible compromises for Ukraine will depend on the situation at the front and the progress of the Ukrainian counteroffensive.

 

Ruslan Bortnik, Oksana Krasovskaya, Andrey Timchenko

for the Ukrainian Institute of Politics