ANALYTICAL REVIEW OF THE MOST IMPORTANT DOMESTIC, FOREIGN POLITICAL AND ECONOMIC EVENTS OF THE WEEK
February 15 - February 21, 2021
CONTENT:
INTERNAL POLICY.
1. Forum of the authorities on utility tariffs within the framework of the Ukraine 30 project.
2. The government has approved a bill for the dismissal of Artem Sytnik from the post of head of the Anti-Corruption Bureau of Ukraine (NABU).
3. The accusation of A. Shariy of treason and new sanctions following the meeting of the NSDC on February 19.
4. Sociology. Changes in the presidential rating.
FOREIGN POLICY.
1. Failure to impeach Trump will keep the former president as the leader of the Republican Party.
2. The situation around Nord Stream-2. Biden and Merkel talk. Joint Statement by Congressmen. Prospects for completion and possible features of the project.
3. Diplomatic impasse in the peaceful settlement in Donbas and toughening of the rhetoric of the parties.
4. NATO is increasing spending on fortification in Eastern Europe and expanding its military presence in Iraq.
ECONOMY.
1. Criminalization of Article 212 of the Criminal Code of Ukraine (non-payment of taxes).
2. Introduce the practice of identifying informal employees by detecting the "seven signs of work and labor".
3. Why are world oil prices soaring and what will happen to fuel, gas, and payments.
4. Why Vitrenko wants to liquidate Vostochny GOK and advises his workers to leave for Poland.
CONCLUSION.
INTERNAL POLICY.
Briefly:
The main domestic political events of this week were:
Government approval of a bill providing for the dismissal of NABU Director Artyom Sytnyk from his post, holding a tariff forum within the framework of Ukraine 30, accusing the SBU of Anatoly Shariy of treason, a meeting of the National Security and Defense Council, imposing sanctions against companies associated with Viktor Medvedchuk and Opposition Platform for Life.
All of them are a continuation of several trends:
In the face of a decline in the rating of the authorities, the President's Office continues to "tighten the screws", depriving the opposition of media, financial and organizational resources. Similar actions are taking place against the "anti-Western" opposition, supported by some of the Western partners. It also shifts the focus of public attention from socio-economic issues and the problems of Donbas. Also, as part of his desire to strengthen his control over government structures, the president is once again trying to replace A. Sytnyk as head of NABU, and is considering the possibility of changing the leadership of NJSC Naftogaz of Ukraine.
1. Forum of the authorities on utility tariffs within the framework of the Ukraine 30 project.
On February 15-17, within the framework of the Ukraine 30 All-Ukrainian Forum, a discussion was held on tariffs for utilities and energy independence.
The Office of the President initiated this discussion and clarification of tariffs and charges within the framework of the All-Ukrainian Forum.
At the same time, such issues as: “the temporary occupation of Crimea and part of Donbas - the impact on the energy market of Ukraine and the formation of tariffs: the political aspect”, “the influence of the temporary occupation on the integration of the energy markets of Ukraine and the EU”. “The road to energy independence comes at a cost. And this is reflected, in particular, in the figures in the bills of Ukrainians for heat and electricity, ”the message says.
This forum is another attempt to explain the increase in utility tariffs, which is destructive for the ratings of the authorities, with a manipulative statement that it was a direct consequence of the loss of control over Crimea and Donbas.
The increase in tariffs is one of the main factors that reduce the rating of the president and his team. In this context, one can see the authorities' desire to focus public attention on the fact that the increase in tariffs is allegedly associated with hostilities and the loss of Crimea and Donbas - a factor for which the government does not have a unilateral influence, and, therefore, does not bear full responsibility for this.
The increase in tariffs is associated with the need to repay IMF loans and obtain new loans from this organization. In a memorandum with the IMF, Ukraine has undertaken obligations on “market tariff setting” in the natural gas market. And the Fund expressed its concern about the Government's intention to reduce prices on gas for residential consumers after the recent "tariff protests".
Holding a forum in this format is unlikely to help stabilize the decline in ratings; on the contrary, it gives the authorities' opponents another reason for criticism and is perceived quite ironically by some media outlets. Since it becomes clear to society that the forum on tariffs is not a search for a solution to the problem, but political technology aimed at another public justification of the policy of total fiscalization, and shifting responsibility for it to external forces.
2. The government has approved a bill providing for the dismissal of Artem Sytnik from the post of head of NABU.
This week, the Cabinet of Ministers approved Bill No. 5070 "On Amendments to Certain Laws of Ukraine Concerning Bringing the Status of the National Anti-Corruption Bureau of Ukraine in line with the requirements of the Constitution of Ukraine".
The new bill proposes to grant NABU the status of an executive body, as well as change the procedure for electing a director. One of the norms of the bill states that during the selection of a new director of NABU, his duties will be performed by the first deputy director. Thus, the bill provides for the dismissal of the current director of the department, Artem Sytnik. The procedure for forming a tender commission for the selection of the director of the bureau, described in the draft law, stipulates that the National Security and Defense Council, an advisory body fully controlled by the president, delegates three people to the commission. Six more members of the commission are approved by the Cabinet of Ministers, including three foreign experts.
Behind the scenes, Volodymyr Zelensky is considered the initiator of the adoption of the law on the dismissal of the current director of NABU, the Minister of Justice Denis Malyuska submitted the amendment to the dismissal. He confirmed that the draft law with its amendments did not receive the approval of the IMF and the text is being actively discussed with the experts of the fund.
Earlier, on November 26 last year, the government approved a bill that retains the post of director of NABU for Artem Sytnik, and also allows the parliament to dismiss the head of the bureau. On September 16, the Constitutional Court declared illegal the presidential decree on the appointment of Artem Sytnik to the post of director of NABU, and ordered the Verkhovna Rada to bring the legislation in line with the decision of the Constitutional Court.
One of the reasons for the deterioration of relations between the bureau and Bankova lies in the fact that NABU is engaged in a case against the deputy head of the OP Oleg Tatarov, as well as an investigation on the purchase of a vaccine against coronavirus. Therefore, Vladimir Zelensky wants to get a more controlled leader at the head of NABU. Besides, the situation with the head of NABU A. Sytnik can be viewed in the same context as the statement by and. about. Minister of Energy Yuriy Vitrenko, who proposed to Prime Minister Denis Shmygal to fire the head of Naftogaz of Ukraine, Andrey Kobolev. We are talking about violations for UAH 75.5 billion. in the work of Naftogaz, which was discovered by the State Audit Service. The statement was made almost simultaneously with the situation in the government.
The probable change in the director of NABU and Vitrenko's statement on Kobolev is not at all a change in the government's focus on external management, as one might assume. Sytnik and Kobolev are two of the most striking figures who, during Poroshenko's time, served as a balance between the President and Western partners. It may be a new attempt to reformat relations with Western partners after the change of the presidential administration in the United States. Zelensky's people should be building a new balance. How successful the attempt was can be judged by the official reaction of the Biden administration. Previously, Michael Carpenter, foreign policy adviser to US President Joe Biden, wrote on Twitter about the personal interest of President Vladimir Zelensky in Sytnik's dismissal.
3. The accusation of A. Sharia of treason and new sanctions following the meeting of the NSDC on February 19.
On February 16, the Security Service of Ukraine brought charges of high treason and incitement to inter-ethnic enmity, the leader of the Sharia Party, Anatoly Shariy, who has been living in Europe for the past 9 years.
The charge was brought under two criminal articles: treason (part 1 of article 111 of the Criminal Code of Ukraine) and violation of the equality of citizens depending on their race, nationality, religious beliefs, disability, and other grounds (part 1 of article 161 of the Criminal Code of Ukraine). According to representatives of the special services, "the evidence is based on interviews and speeches by Anatoly Shariy," which contain "facts of his subversive activities against Ukraine."
From a legal point of view, the case of treason Sharia has no prospects, since it is impossible to prove guilt under this article based on videos from the Internet. Nevertheless, the attack on Anatoly Sharia may serve as a pretext for actions against his party, media assets, and business support.
February 19, based on the results of the meeting, the National Security Council and the Defense of Ukraine decided to apply sanctions to 19 legal entities and 8 individuals. Among the listed persons are the co-chairman of the “OPSZ” Viktor Medvedchuk and his wife Oksana Marchenko. Several enterprises linked by Medvedchuk and his associates were also under sanctions.
The persecution of Shariy and the imposition of sanctions against Medvedchuk should be viewed in the context of the general trend to deprive the opposition of media and financial resources, which began with a criminal case against anonymous Telegram channels, continued with the closure of three TV channels from the Taras Kozak holding, and after that - resulted in the events described above.
It is no coincidence that sanctions against Viktor Medvedchuk were considered at a meeting of the National Security and Defense Council together with the introduction of adjustments in the scenario of the development of the situation in Donbas and the tightening of the Ukrainian position on the settlement of the conflict.
Speaking about the reasons for the sanctions against Medvedchuk, it is worth noting that, firstly, this is the message from Russia that Kyiv is returning to political confrontation from attempts to negotiate a peaceful settlement with it (including within the country). The result of this confrontation will no longer be measured by political art, but by force. A kind of message to Putin that Ukraine will fight against Russian interests respond toughly and the negotiation period is over.
Secondly, it is a message for the Ukrainian political elites that the president is strong and ready to conduct a campaign aimed at suppressing political competition (the policy of “tightening the screws”). Against opposition parties and groups, he will use harsh measures, sometimes even illegal.
The imposition of a sanction can have far-reaching consequences. Major oligarchs and opposition political groups understand that in this case, the president is not playing by the rules. The current situation increases the fragility and instability of the Ukrainian political system, takes it far beyond the framework of even the conditional democracy in which it previously functioned. Additionally, the sanctions are likely to exacerbate relations with Russia, which could lead to an escalation of hostilities in the Donbas.
4. Sociology. Changes in the presidential rating.
On Monday, February 15, the Kyiv International Institute of Sociology KIIS published a sociological study (the survey was conducted on February 5-7), according to which in the presidential Volodymyr Zelenskyy continues to lead the ranking with a result of 22.7%. in comparison with the survey conducted by KIIS on January 27 - February 1, the indicators remained almost unchanged, but its support decreased by almost 5% compared to December 2020. Therefore, the downward trend in the president's rating continues.
The second place in the rating is occupied by P. Poroshenko - 18.3%. It is noteworthy that his rating increased by almost 5% over the week, in the poll on January 27 - February 1 by KIIS - (13.7%). At the same time, no more than a week passed between the two polls.
It can be assumed that the difference could have arisen due to the different methods of conducting the survey. The KIIS poll on February 5-7 was carried out by telephone interviews, and the poll on January 27 - February 1 was conducted by the method of personal interview.
Over a month, since December 2020, P. Poroshenko's rating has hardly changed and was at the level of 13.7%.
In the KIIS study, there is an increase in the ratings of candidates from the conditional pro-Western segment and a general decrease in the rating of candidates from the "OPL" by 2-3%. The reasons for the decline in the popularity of the party, most likely, were the closure of TV channels and the lack of reaction to this from the representatives of the "OPL".
According to KIIS, Yulia Tymoshenko has an electoral support rate of 14.5%, her rating increased by 3.5% over the week. From December 2020 (7.5%) - almost doubled.
Yuri Boyko's indicator is 11.4%. In a week, it fell by 2%. At the same time, in December Boyko's rating was 14.7%. V. Medvedchuk, according to KIIS, has a current rating of 5.1%. During the week it fell by almost 3%, and in December it was at the level of 8.7%.
FOREIGN POLICY.
Briefly:
Several trends continued in foreign policy this week, the most important of which is the transition of the United States to an active policy of containing its geopolitical opponents by military-political means. It manifested itself in the statements of the NATO secretary-general about the need to strengthen the eastern flank of the alliance (containment of Russia) and the adoption of a decision to expand the military presence in Iraq (containment of Iran).
Other important foreign policy tendencies this week are the sliding of the conflict in Donbas to another escalation against the backdrop of the "Minsk" and "Normandy" negotiation deadlock; and the continuation of the construction of Nord Stream 2, with which the US seems to have come to terms.
1. Failure to impeach Trump will keep the former president as the leader of the Republican Party.
On February 13, following a vote in the US Senate, former President Donald Trump was acquitted in an impeachment case. 57 senators voted for impeachment, while 67 were necessary. 43 senators voted against.
Let us remind you that this is the second impeachment process against Trump. The former head of the White House is accused of inciting unrest and storming the Capitol on January 6 during the approval of the presidential election results. Trump became the first-ever American president to be acquitted twice under impeachment proceedings and the first to be removed from office after his term ended.
The current US President Joseph Biden, following the vote in the Senate, said that “although the final vote did not lead to a conviction, the essence of the charge is not disputed”. Despite the seemingly absurd attempt to remove the president from power after the end of his term, Trump's opponents from the Democratic Party wanted to deprive him of the potential opportunity to run again in the presidential elections in 2024 by declaring impeachment. Having failed to achieve this goal, they potentially created a threat for themselves already in the future elections of the head of state.
This is because, although the riots in the Capitol have had a certain negative impact on Trump's image, he remains the most popular member of the Republican Party. So, according to a poll by YouGov / Economist, his rating is 87% among Republicans, while only 12% have a negative attitude towards him. It is characteristic that only 36% of Republicans have a positive attitude towards the leader of the Senate minority Mitch McConnell, which significantly limits his room for maneuver and forces him to listen to Trump's position.
Contrary to forecasts, Trump's departure from the presidency did not significantly affect the prospects for "Trumpism" (conservatism based on traditional values and interests of white Anglo-Saxon Protestants, as well as pragmatism in foreign policy) as an ideology. In particular, the confrontation with China, contrary to forecasts, remains the main foreign policy priority of the United States. At the same time, in the field of domestic politics, against the background of Biden's return to left-liberal politics, aggressive support for migrants, and various kinds of minorities, Trumpism is likely to grow among Republicans.
It can be predicted that against the background of the continuing polarization of American society towards left-liberals and conservatives, Trump will remain the leader of the Republican Party and, if he does not take part himself, will play a significant role in nominating and supporting the main Republican candidate in the US presidential election in 2024.
2. The situation around Nord Stream-2. Biden and Merkel talk. Joint Statement by Congressmen. Prospects for completion and possible features of the project.
The completion of the Nord Stream 2 project continues to be one of the most important topics in the Russia-Germany-USA triangle of relations.
On February 12, GOP senators Risch and Democratic Sheikhin sent US President Biden a demand to impose sanctions on Nord Stream 2. Also, a group of 15 congressmen sent a letter to Secretary of State Anthony Blinken, in which they demanded a direct response from the State Department to the question of whether he intends to impose sanctions against Nord Stream 2. And although on Friday there was information that Biden himself proposed to impose new restrictions on the pipeline project, it seems that the new American administration does not intend to escalate on this issue.
Thus, on Wednesday, the Financial Times and the Wall Street Journal announced the start of negotiations between Germany and the United States on the possibility of easing Washington's sanctions to complete the construction of the Nord Stream 2 gas pipeline. The German authorities are reportedly able to propose linking the launch of the pipeline with guarantees that Russia will not use it as a lever of pressure on Ukraine. At the same time, these guarantees may be violated in the future, and the gas pipeline put into operation will work and bring profit to investors.
Against the background of the aggravation of the situation around Nord Stream 2, the Russian side remains confident. On Monday, 15 February, the ship Fortuna resumed pipe-laying work on the bottom of the Baltic Sea. On Friday, February 19, the deputy head of the Gazprom board assured that the project would be implemented, and the head of the Russian Foreign Ministry noted that the Nord Stream 2 issue was closed for “any respecting human law".
It can be assumed that despite all forecasts and opposition from the United States and individual officials in Brussels, Nord Stream 2 will still be implemented. At the same time, the very format of the agreements reached, probably not publicly, is unlikely to be fundamentally important. Not so much because it is unlikely that they will become known, but because of the high level of conflict in the system of international relations.
3. Diplomatic impasse in the peaceful settlement in Donbas aDonbashening of the rhetoric of the parties.
Against the background of the next anniversary of the signing of the Minsk Package of Measures, this month the parties' statements about progress in its implementation, or rather, about their absence, have intensified.
Back on January 27, Deputy Foreign Minister of Ukraine Vasyl Bodnar said in an interview with Ukrinform agency, quote:
“The President of Ukraine Volodymyr Zelensky, immediately after winning the elections, proposed the idea of rebooting the formats and more actively involving the United States in the negotiation process. This is one of the key issues for discussion with the American side" ...
That is, the main idea of Ukraine in the issue of a peaceful settlement in Donbas now is to involve the United States in the negotiation process. Leaving aside the fact that it is impossible to do this due to the position of the Russian side, which is categorically against, the very purpose of such intentions is not clear. If the United States for almost 7 years has not been able to contribute to the settlement of the conflict in Donbas "on Ukrainian terms", then it is unlikely that anything will change from their hypothetical connection to the "Normandy" negotiation format.
Against the backdrop of a deadlock in the Donbas peace process, Russian President Vladimir Putin sent an unambiguous signal last week. During a meeting with editors of Russian media, answering their question about whether the Kremlin intends to include the territories of Donbas not controlled by Ukraine into Russia, he replied, quote:
“We have a huge responsibility on our shoulders for Russia as a whole, and before making any decision, we must think about the consequences of any of our steps. We will not leave Donbas, no matter what”.
Note that such questions to Putin and such answers to them appear in the Russian media space for a reason. They serve as a hint to the Ukrainian authorities that if the delay in the implementation of the Minsk Package of Measures continues, Russia will intensify the integration of the uncontrolled territories of Donbas into its composition. Remembering the distribution of Russian passports in Donbas, the synchronization of school certificates and university diplomas with Russian ones, and much more, we will understand that de facto this is already happening.
In Kyiv, the rhetoric of officials in charge of the peace process is also becoming increasingly confrontational.
So, the adviser to the Ukrainian delegation in the Minsk Trilateral Contact Group Alexey Arestovich, on the air of the Ukraine 24 TV channel, said:
“I believe that this (that is, the aggravation of the situation in Donbas) is not just possible, it is practically inevitable, sooner or later. The Kremlin will not abandon its attempts to push us through by force. I do not presume to name the exact date, although there are signs that this spring may be closer to summer".
In general, in Ukraine lately, there has been a lot of talk about a possible or already begun, exacerbation on the line of contact. In particular, Interior Minister Arsen Avakov and ex-President Leonid Kravchuk recently announced this. Naturally, the opposing side is accused of exacerbation.
But what is interesting, in our opinion, is something else: the statements of Ukrainian officials about the aggravation sound as if they were said not in the context of the negotiation process on a peaceful settlement, but in the context of “tightening the screws” inside the country. It seems that they are trying to intimidate or plunge citizens into patriotic anger by talking about an imminent military exacerbation, in anticipation of the continuation of the cleansing of the opposition information field, which began with the initiation of criminal cases against several anonymous Telegram channels, continued with a ban on the broadcasting of three TV channels, as we already wrote above is not over yet.
Of course, the more and more confrontational statements from both Kyiv and Moscow have an objective reason: the process of a peaceful settlement in Donbas is clearly at an impasse. This happened after it became clear that the Ukrainian side was not able to fulfill the obligations assumed during the meeting in the Normandy format at the end of 2019 (withdrawal of troops, prescribing a step-by-step mechanism for a political settlement, etc.). The new foreign policy priorities of the United States, which, under Biden, intend to more actively "contain" Russia, probably played a significant role in the return to confrontational rhetoric and deadlock in the issue of a peaceful settlement. The continuation of the armed conflict in the Donbas with periodic exacerbations and condemnation of the Russian side by the Western community in Washington is seen as one of the main means of such containment (fettering Russian resources).
4. NATO is increasing spending on fortification in Eastern Europe and expanding its military presence in Iraq.
On February 17, ahead of the NATO Defense Ministerial Summit - the first since Joe Biden took office - NATO Secretary-General Jens Stoltenberg called on European member states to fulfill their commitments to increase defense spending. Refusing to increase defense spending following the end of Donald Trump's presidency would be "the wrong signal," Stoltenberg said in an interview with the German newspaper Süddeutsche Zeitung.
Earlier, on February 15, Stoltenberg announced that he would offer his alliance colleagues to increase spending on strengthening the eastern European flank of the military-political bloc. Quote:
“I will propose increasing NATO spending on our core containment and defense activities. This will support the deployment of Allied forces in our battle groups on the eastern flank of the alliance, air policing, naval deployment and exercises".
According to the NATO Secretary-General, the increased financial revenues from European states should be directed to "strengthening containment on the eastern flank." Such statements fit quite organically into the return to the concept of "intensive containment of Russia", which has already been announced by the Joe Biden administration.
At the same time, on February 18, the heads of the NATO countries' defense ministries decided to increase the alliance's mission to train the Iraqi army eightfold. As NATO Secretary-general Jens Stoltenberg said at a press conference in Brussels, the number of military alliances in Iraq will be increased from 500 to 4000 people.
If the news of the "strengthening of the Eastern European flank of the alliance" means a transition to an increasingly active containment of Russia, then the news of the sending of new NATO forces to Iraq indicates the intention to similarly contain Iran.
In general, after the recent inauguration of Joe Biden as president of the United States, we are witnessing a transition in American foreign policy from the strategy of optimizing expenditures that prevailed under Trump to a strategy of new expansionism, designed to slow down the development of the already formed alternative poles of world politics. Probably, this foreign and military-political course of the Biden administration will become a stable trend in the next 4 years.
ECONOMY.
Briefly:
The Ukrainian economy continues to actively develop a tendency to increase the hidden and explicit tax burden for citizens, small and medium-sized businesses, caused by the need to return old IMF loans and receive new ones. The second trend is a complete rejection of any protectionism on the part of the Ukrainian government in favor of foreign business.
1. Criminalization of Article 212 of the Criminal Code of Ukraine (non-payment of taxes).
At the beginning of February, the parliament adopted in the first reading the bill No. 3959-1, which prescribes the legislative basis for the start of the work of the Bureau of Economic Security (BES).
Bill 3959-1 prescribes the return of criminal penalties for tax evasion. Under Yanukovych, this article was “humanized”, leaving only fines as punishment.
Penalties for non-payment of taxes are increasing:
● insignificant amounts:
from 3-5 thousand non-taxable minimums to 5-7 thousand - from about 85 thousand to 119 thousand hryvnia
● in large sizes by conspiracy:
from 5-7 to 7-10 thousand non-taxable minimums - from approximately 119 thousand to 170 thousand hryvnia (in the previous version of the law there was only a fine, but now there will be criminal liability up to 5 years in prison).
● especially large sizes:
from 255 to 425 thousand hryvnia
It also adds liability for VAT fraud.
Under the bill, the director of the BEB receives the right to pre-arrest property and accounts for 48 hours. Immediately after the adoption of this decision, the prosecutor submits a petition to the investigating judge for the seizure of property (the director of NABU has the same right). The BEB detectives, with the permission of the investigating judge, are entitled to monitor bank accounts. For encroachment on the life of detective BEB, imprisonment is provided for up to 15 years. The prosecution no longer needs to prove malicious intent in court to avoid paying taxes.
Considering the almost zero efficiencies of NABU's work, the criminalization of Article 212 threatens to end with yet another behind-the-scenes consensus between big Ukrainian business and the now newly created Bureau of Economic Security (BEB). In other words, the money not paid to the budget as taxes will be used to support the status quo. As for small businesses, it seems that their representatives will be the main victims of the tougher punishment for non-payment of taxes.
2. Introduce the practice of identifying informal employees by detecting the "seven signs of work and labor".
On February 9, the Cabinet of Ministers submitted to the Verkhovna Rada Bill No. 5054 on defining the concept of labor relations and determining their existence.
Article 21 of this draft law lists “signs of labor relations” to identify shadow employment, for example, firms register their employees as individual entrepreneurs. The adoption of the law may result in even greater “shadowing” of the economy and additional difficulties for Ukrainian citizens who want to work officially.
If there are only three of the seven signs of work, the aforementioned law already makes it possible to determine whether the fact of the employee's employment takes place. These seven signs of employment relate to the recording of any interaction if it is regular if it is monitored if it occurs in a certain place if there is a transfer of raw materials or equipment if there are regular transactions, the availability of a work schedule, and compensation.
At the same time, it is worth noting that civil law contracts already imply the payment of ERUs, personal income tax, and military duty.
An explanatory note to the Law indicates the desire of citizens to work officially and, accordingly, have the right to sick leave, leave, including maternity leave, and so on. Social guarantees.
This bill aims to increase the number of funds flowing into the budget, but it has every chance of leading to the opposite consequences - a complete rejection of civil law contracts and an even larger percentage of enterprises that prefer not to formalize labor relations with their employees.
3. Why are world oil prices soaring and what will happen to fuel, gas, and payments.
JP Morgan chief analyst for the oil and gas sector Christian Malek said this week that oil prices could jump to $ 100 per barrel and even higher in 2021.
“In 3.5 months, oil jumped from $ 37 to $ 65,” says Sergei Kuyun, head of the A-95 consulting company.
The sharp rise in oil prices is speculative, but it still entails an increase in other energy sources, such as coal, gas, and electricity, and of course - an increase in gasoline prices.
Globally, consumers around the world strive to improve the quality of life through increased consumption of resources, in particular fuel. At the same time, over the past five months, commercial reserves of "black gold" have been falling in various oil-exporting countries.
As a result, according to some estimates, the price of diesel fuel at Ukrainian filling stations may increase up to 35 hryvnias per liter during 2021.
In turn, the tariff for centralized heating may increase by 25-30%, and for hot water - by 20-25% by the next heating season 2021/2022.
4. Why Vitrenko wants to liquidate Vostochny GOK and advises his workers to leave for Poland.
On February 11, the Energy Ministry hosted a meeting on the Eastern Mining and Processing Plant, which caused a great response.
And about. Energy Minister Yuriy Vitrenko proposed to close Vostochny GOK and urged his workers to go to Poland.
Since 2014, Ukraine has embarked on a course of reorientation to American nuclear fuel to replace Russian, although Ukraine continued to sell raw materials for TVELs through Kazakhstan to Russia.
Energoatom buys uranium oxide concentrate from Vostochny GOK for $ 120 per ton, although it can buy a similar product from abroad for $ 70-80 per ton. Ukraine provides only 40% of its uranium demand through domestic production. To develop Ukrainian uranium deposits, 2.5 billion hryvnias of investment is needed. Decommissioning of two uranium mines - Ingulskaya and Smolinskaya, will cost Ukraine 1.2 billion hryvnias.
The Westinghouse company, according to Energoatom, refuses to take Ukrainian raw materials for the enrichment and a further return to Ukraine for the needs of nuclear power plants due to the high price. Nevertheless, Westinghouse already provides 7 out of 15 power units in Ukraine with finished products made from foreign raw materials and should provide all 15 units by 2023.
Thus, in the current situation, Vostochny GOK has no chance of survival, since the United States does not need its raw materials, and Kazakhstan is ready to buy Ukrainian raw materials only at a price lower than that which Vostochny GOK needs for stable operation (Energoatom buys Vostochny GOK products for 120 dollars, and Kazakhstan is ready to buy at 79 dollars per ton).
As you can see, Yuriy Vitrenko openly ignores the interest of the Ukrainian manufacturer for the sake of foreign business, potentially depriving the budgets of all levels of tax revenues, and the employees of enterprises - of their jobs, aggravating the economic and social situation in the country.
CONCLUSION.
In summary, it is worth noting that:
First, this week the Ukrainian authorities, represented by the Office of the President and the National Security and Defense Council controlled by it, continued the practice of depriving political opponents of resources (media, economic, and organizational) through the mechanism of imposing sanctions and launching criminal prosecutions. This is done mainly so that the president, whose rating is falling, does not become a "lame duck" in the eyes of the state apparatus and safely retains his post and control over the political processes in the country until the end of the presidential term. Also, the tactics of suppressing political opponents from the “anti-European” camp signal an escalation in relations with Russia and a slide into an increasingly tough confrontation.
Secondly, the political impasse in the issue of a peaceful settlement in Donbas is gradually turning into a political escalation, which may be followed by a military aggravation on the line of contact. The parties are being pushed towards such a scenario by the deadlock in matters of a peaceful settlement, and in the case of Ukraine, also by the position of the United States, which announced the transition to an increasingly active containment of Russia. They will be "restraining", including at the expense of Ukraine, trying to tie up as many Russian resources as possible on the Donbas problem and prevent their use in other points of geopolitical confrontation (the Middle East, Latin America, etc.).
Third, in foreign policy, one of the main trends in the US transition from pragmatic spending cuts in foreign policy to new expansionism. This is reflected in the strengthening of NATO's "eastern flank" and an increase in the military contingent of the United States and its allies in Iraq. If we add here the ongoing confrontation between Washington and Beijing, which we wrote about in previous reviews, it becomes clear that Biden's main foreign policy strategy is to contain the alternative poles of power in the world and regional politics in the form of China, Russia, Iran, etc. the trend seems to be relevant throughout the 4 years of Biden's presidency.
Fourthly, the trend towards an increase in the hidden and explicit tax burden for citizens, small and medium-sized businesses, caused by the need to return old IMF loans and receive new ones, continues to develop in the Ukrainian economy. Within the framework of it, responsibility for tax evasion is tightened, and the control authorities receive more and more powers to track down and punish non-payers. Also in the domestic economy, there is a complete rejection of any protectionism, in favor of foreign capital.
Edited by:
Ruslan Bortnik,
Daniil Bogatyrev.
The authors:
Daniil Bogatyrev,
Maxim Semyonov,
Oksana Krasovskaya,
Andrey Timchenko.
