Analytical review of the week No. 149 of 20.02.2022.

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

14.02.- 20.02.2022

 

CONTENT:

SUMMARY AND MAIN TRENDS.

DOMESTIC POLICY.

1. Volodymyr Zelensky approved a new holiday in the country - Unity Day.

2. Sociology.

FOREIGN POLICY.

1. The State Duma adopted an appeal to Putin with a call to recognize the independence of the so-called "DPR" and "LPR".

2. Aggravation of hostilities in the Donbass.

3. Russia provided a response to the official US response to the demand for security guarantees.

4. Speech by Vladimir Zelensky at the Munich Security Conference.

ECONOMY.

1. SE Antonov will receive less than 1.4 billion US dollars in orders from the state, which will receive the French Airbus.

2. In Cherkassy, the property of the bankrupt plant Bogdan, owned by O. Gladkovsky , an associate of P. Poroshenko, is being sold.

3. The law on the "legalization of cryptocurrencies" came into force.

4. The EU continues to increase its influence in Ukraine by providing loans in exchange for reforms.

5. The growth of pensions will exceed inflation by 0.88%.

SUMMARY AND MAIN TRENDS.

Summing up the results of the week, we note that:

Firstly , this week the OP took advantage of the hysteria fueled by the West around the “Russian invasion” and tried to play on the public mood on the - вday of the failed Russian invasion Президент Украины. V. Zelensky established a new holiday - Unity Day.

Secondly , the results of sociological studies demonstrate the continued gradual growth in the ratings of the main competitors of the incumbent president and the ruling Servant of the People party, represented by Petro Poroshenko and his political force European Solidarity. In these conditions,власть пытается work to stabilize ratings and “minus” competitors with the help of information campaigns and criminal cases.

Thirdly , the text of the response of the Russian Federation to the American position on the requirements of security guarantees, published this week, indicates that the trend towards escalation and raising rates continues to dominate in Russian-American relations. The sharp statements of the parties and the escalation in the Donbass that is taking place this week fully fit into this trend.

Fourth , the more obvious the impasse in the implementation of the Minsk agreements becomes, the more likely the scenario of Russia's recognition of the independence of the territories not controlled by Ukraine becomes. At the moment, the probability of it is very high. The evacuation and mobilization carried out in the uncontrolled territories can be preparatory measures as part of the transition of the Russian Federation to the implementation of this scenario.

Fifth , in the economic sphere, Ukraine is exacerbating its position as a market for foreign high value-added products to the detriment of domestic producers. The authorities are going to tax the crypto -currency savings of citizens, extending the rules of financial monitoring to them . The EU will provide Ukraine with a loan of 1.2 billion euros in exchange for reforms, the implementation of the Association Agreement and the Memorandum with the IMF.

DOMESTIC POLICY.

Briefly :

На этой неделе в ОП воспользовались нагнетаемой Западом истерией вокруг «российского вторжения» и попытались сыграли на настроениях общества - в день несостоявшегося российского вторжения Президент Украины В. Зеленский учредил новый праздник - День единения.

The results of sociological studies demonstrate the continued gradual growth in the ratings of the main competitors of the incumbent president and the ruling Servant of the People party, represented by Petro Poroshenko and his political force European Solidarity. Under these conditions, the Office of the President is trying to work on stabilizing the ratings and "minus" competitors with the help of information campaigns and criminal cases.

1. Volodymyr Zelensky approved a new holiday in the country - Unity Day.

On February 14, President Volodymyr Zelensky signed a decree "On urgent measures to consolidate the Ukrainian society", by which he declared February 16, 2022 the Day of Unity of Citizens of Ukraine. The President instructed to raise the national flag on houses and structures in all settlements and perform the national anthem at 10:00. Foreign diplomatic institutions were instructed to hold appropriate image events in the host states aimed at uniting and supporting Ukraine. The Cabinet of Ministers has approved a plan of measures to celebrate Unity Day on February 16. In particular, they assumed an increase in payments to military personnel and the creation of an information platform " UAraz ".

The formal reason for the establishment of a new holiday was that on this date - February 16, foreign media "planned" another Russian attack on Ukraine. In addition, official representatives of the United States and a number of other countries spoke about this 1.

For their part, representatives of the Ukrainian authorities, in response to the hysteria fanned to the detriment of the Ukrainian economy by the West, expressed bewilderment and said that Ukraine does not see a real threat of a Russian offensive in the near future 2. The president said there was no evidence of a Russian attack on February 16. As a result, the Russian invasion did not take place that day, and V. Zelensky recorded a video message in the morning in which he congratulated everyone on the new holiday and actually formalized a “new victory” for himself.

The establishment of the Day of Unity on the day of the failed Russian invasion on February 16 is an attempt by the authorities to use social energy for self-promotion purposes. Initially, Bankova was sure that there would be no attack from Russia that day.

2. Sociology.

This week, the results of sociological research by the Kiev International Institute of Sociology (KIIS) 3and the Sociological Group "Rating" were published 4.

According to a poll from KIIS, V. Zelensky continues to lead in the presidential rating with a score of 25.1% of respondents. Compared to the poll conducted by KIIS in January 2022, the president's rating increased slightly (+1.6%); was - 23.5%.

In the parliamentary rating, European Solidarity is leading - 22.9% (+3% compared to January 2022).

"Servant of the people" - 16.4%. Compared to January 2022, the party's rating has slightly increased (+2.7%).

In general, the gradual growth of the ratings of the leader of the nationalist electoral field continues - "ES" of P. Poroshenko is confidently leading in the party rating with a margin of 6.5% from the "Servant of the People".

As for the presidential rating, despite the fact that V. Zelensky continues to occupy the first place, the gap between him and P. Poroshenko is only 3%. Thus, the leadership of the incumbent President becomes shaky and the authorities need to take measures to strengthen it.

In contrast to the KIIS sociological survey, the survey by the Rating group does not yet demonstrate a critical situation for the authorities. V. Zelensky is in the lead (24.6%), with a margin of almost 8% from P. Poroshenko, while Servant of the People still occupies the 1st place in the party rating, but with a margin from the EU within the margin of error of -1.2 %.

Regarding the Minsk Agreements, the results of the Rating study showed that:

• 21% of respondents are not familiar with their content

• 67% - know about it superficially.

• 12% know well

In spite of this:

• 63% - believe that the Minsk agreements should be reviewed and new ones signed. From December 2021 the number of those who think so increased by - 9%

• 18% - believe that it is generally necessary to withdraw from the negotiation process and make decisions without the participation of international mediators.

• 11% are convinced that Ukraine must fully comply with the Minsk agreements.

Interestingly, the number of interviewed citizens of Ukraine who are well acquainted with the content of the Minsk agreements and those who believe that they must be implemented actually coincides. The increase in the number of those who believe that the Minsk agreements need to be revised is probably due to the fact that it is precisely this line that is now actively promoted by the current authorities of the country and it is dominant on the agenda of all mainstream media.

FOREIGN POLICY.

Briefly:

The published text of the response of the Russian Federation to the American position on the requirements of security guarantees indicates that the trend towards escalation and increase in rates continues to dominate in Russian-American relations. The sharp statements of the parties and the escalation in the Donbass that is taking place this week fully fit into this trend.

The more obvious the impasse in the implementation of the Minsk agreements becomes, the more likely the scenario of Russia's recognition of the independence of the territories not controlled by Ukraine becomes. At the moment, the probability of it is very high. The evacuation and mobilization carried out in the uncontrolled territories can be preparatory measures as part of the transition of the Russian Federation to the implementation of this scenario.

1. The State Duma adopted an appeal to Putin with a call to recognize the independence of the so-called "DPR" and "LPR".

On February 15, the State Duma voted for an immediate appeal to Russian President Vladimir Putin with a request to consider the need to recognize the self-proclaimed "DNR" and "LNR", choosing not the "United Russia" option introduced the day before, but a tougher project of the Communist Party of the Russian Federation, proposed back in January 5.

Later, on February 17, against the backdrop of aggravation in the Donbass, the press secretary of the Russian president, Dmitry Peskov, said that Vladimir Putin did not respond to the State Duma's appeal on recognizing the independence of the self-proclaimed "republics" of Donbass, but took it into account 6.

The described situation is unfolding against the backdrop of Russia’s insistent demands for Kiev to enter into direct negotiations with representatives of the “DPR” and “LPR”, accompanied by equally persistent refusals of the Ukrainian leadership to do this, as well as refusals to implement the Minsk agreements in their current form.

Under these conditions, the creation of prerequisites for Russia's recognition of the "DPR" and "LPR" should be considered as a threat and, at the same time, a fallback option for Moscow, in case Kiev fails to implement the Minsk agreements . According to the appeal adopted by the State Duma, now V. Putin can decide on recognition with one stroke of the pen at any time.

The more obvious the impasse in the implementation of the Minsk agreements becomes, the more likely the scenario of Russia's recognition of the independence of the territories not controlled by Ukraine becomes. At the moment, the probability of it is very high.

2. Aggravation of hostilities in the Donbass.

On February 17, a military escalation began in the Donbass. "DNR" and "LNR" reported massive mortar and artillery attacks on their territory 7.

The headquarters of the JFO also accused the troops of the "republics" of shelling. And they said that the enemy was firing at schools and kindergartens.

The next day, February 18, the "republics" unexpectedly announced the evacuation of their population and began demonstratively taking buses with refugees to Russia.

The reason stated by the "heads of the DPR and LPR" is an imminent attack by Ukraine. Kiev categorically denies such intentions.

In parallel, a series of explosions began in the uncontrolled territories. And in the West they are again talking about Russia's "invasion" of Ukraine in a few days.

The most politically serious events of all of the above are the announcement of evacuation and mobilization in the uncontrolled territories. Given the massive nature of these events, it would be unreasonable to consider them simply “information warfare measures”. The economic cost of such events for Russia is very high. Unlike, for example, the cost of evacuating a small number of diplomatic workers from Ukraine by Western countries.

In this regard, three main reasons for the announcement of evacuation and mobilization in uncontrolled territories are likely:

1. Russia fears US provocations in Donbas. Based on the intensification of military hysteria by the Americans, such provocations are possible. And their result will almost certainly be a war of armed formations of uncontrolled territories with the Armed Forces of Ukraine along the entire line of contact. This can be the undermining of chemical enterprises, terrorist attacks, etc. (moreover, carried out on the initiative not of the Ukrainian side, which does not need it, but of the Americans and various proxy tools, such as PMCs, saboteurs, etc.) In this situation, Russia wants to avoid accusations of "unwillingness to protect its citizens in the Donbas" and announces the evacuation of the civilian population of the so-called "DNR" and "LNR".

2. Russia is preparing to recognize the so-called "DNR" and "LNR". The ground for this has already been prepared in the State Duma. The decree lies with V. Putin and he can sign it. In this case, it is likely that the Ukrainian side will try to initiate an aggravation in order to prevent the entry of Russian troops into uncontrolled territories or the establishment of stable Russian economic activity there. In anticipation of such a decision, it is logical (from the Russian point of view) to evacuate civilians, and then, possibly, immediately after recognition, officially introduce Russian troops there, after which hostilities will almost certainly freeze according to the "Transnistrian" scenario, since fighting directly with the RF Armed Forces the Ukrainian side does not intend to.

3. Russia is preparing a military solution to the conflict in its favor (at least in the Donbass) and is evacuating the population to minimize casualties.

It should also be noted that Ukraine, at the moment, does not have a serious motive for a military solution in the Donbass.

Firstly, it is technically unlikely and only creates a pretext for direct intervention by the Russian army and a military crisis for Ukraine. Any serious casualties among military personnel or a military defeat is a political crisis for the authorities with the risk of losing power itself.

Secondly, to unleash a war today is to confirm the correctness of both the United States (about the attack of the Russian Federation) and the Russian Federation (about aggressive intentions), which the authorities denied for a long time, and show, at a minimum, their incompetence in assessing the situation. It is also a direct road to crisis.

Thirdly, the inevitable significant sacrifices of such an operation offset any political gain.

Fourthly, an attempt to resolve the conflict in Donbas by force is capable of inflicting a severe blow on the economy of Ukraine and strengthening the nationalist-oriented forces (including P. Poroshenko's associates and others).

3. Russia provided a response to the official US response to the demand for security guarantees.

On February 17, Russia handed over to the US Ambassador and published its reaction to the previously received American response on the Russian draft treaty between the Russian Federation and the United States on security guarantees.

The 10-page document says that "the American side did not give a constructive response to the basic elements of the draft treaty prepared by the Russian side with the United States on security guarantees."

These elements in the message include:

- rejection of further NATO expansion,

- on the withdrawal of the "Bucharest formula" that "Ukraine and Georgia will become members of NATO"

- on the refusal to create military bases on the territory of states that were previously part of the USSR and are not members of the alliance, including the use of their infrastructure for conducting any military activity,

- about the return of military potentials, including strike ones, and NATO infrastructure to the state of 1997, when the Russia-NATO Founding Act was signed.

"These provisions are of fundamental importance for the Russian Federation," the document says.

Russia, as warned in the Russian Foreign Ministry, will be forced to respond.

“In the absence of the readiness of the American side to agree on firm, legally binding guarantees to ensure our security from the United States and its allies, Russia will be forced to respond, including through the implementation of measures of a military-technical nature,” the response says 8.

The main conclusion from the above is that Russian-American relations continue to be dominated by an escalation and rate hike trend. The sharp statements of the parties and the escalation in the Donbass that is taking place this week fully fit into this trend.

4. Speech by Vladimir Zelensky at the Munich Security Conference.

On February 19, President of Ukraine Volodymyr Zelensky spoke at the Munich Security Conference.

Below are the main points of his speech 9.

1. The West is escalating the situation with the "invasion", this is killing the economy of Ukraine. At the same time, no security guarantees are given to Kiev and they are not accepted into NATO.

2. In the West, Ukraine is openly "bred" by telling it about a "guaranteed war", but at the same time they do not even publish a list of sanctions against Russia.

3. While Germany and France are demanding that Ukraine fulfill Minsk-2, people are dying in the Donbas again. That is, the President is using the aggravation as an excuse to "move out" from the promises to introduce laws on the Minsk agreements. By the way, V. Zelensky said that he had already prepared some "drafts" of bills for the political part of "Minsk-2". But so far no one has seen them.

4. Instead of whipping up panic about an "invasion", it would be better for the West to open "long" loans to Ukraine without political preconditions. According to Zelensky, one cannot demand from a warring country to implement reforms for which IMF loans are issued.

5. Volodymyr Zelensky initiated consultations within the framework of the Budapest Memorandum. If the result does not suit Kiev, Ukraine may question the obligations of the guarantor countries and withdraw from the Budapest Memorandum.

Thus, against the backdrop of the American and British media fomenting rumors about an imminent Russian invasion of Ukraine, the contradictions between the current Ukrainian authorities and Western partners again made themselves felt. The main complaints of Volodymyr Zelensky against the United States, Britain and the EU are “insufficient military and financial support for Ukraine”, “unwillingness to accept it into NATO”, and forcing military hysteria by the Western media, due to which Ukraine suffers economic losses.

However, in the USA and Britain they prefer not to notice the above-described claims from Kiev.

ECONOMY

Briefly:

Ukraine is exacerbating its position as the market for foreign products with high added value to the detriment of domestic producers.

The authorities are going to tax the cryptocurrency savings of citizens, extending the rules of financial monitoring to them .

EU will provide Ukraine with a loan of 1.2 billion euros in exchange for reforms, the implementation of the Association Agreement and the Memorandum with the IMF.

1. SE Antonov will not receive approximately 1.4 billion US dollars in orders from the state, which will receive the French Airbus .

According to the text of the memorandum dated November 25, 2021, which was signed by the Ministry of Infrastructure of Ukraine with Airbus, it is planned to purchase 22 aircraft: six short-haul narrow-body aircraft (type A220); 12 medium-haul narrow-body aircraft (A320/A321 type); and four wide-body aircraft (A330/350 type) 10.

At the same time, Ukraine has its own state-owned aircraft manufacturing company "GP Antonov".

Below is a comparison of the cost of aircraft:

AIRBUS:

A220 - from 76 to 86 million dollars.

A320 / A321 - from 94 to 110 million dollars.

A330 - from $220-225 million.

A350 - from 317 to 366 million dollars.

ANTONOV:

An-158 - from 30 - 32 million dollars.

An 158 is a direct competitor of the short -haul and medium-haul A220, A320/A321, at a price 2-3.5 times cheaper.

For the A330 / 350, there are currently no analogues ready for production in Ukraine, but the Antonov Design Bureau has developed a project for the long-haul An-218, which, if desired, could be implemented.

Thus , the Antonov State Enterprise will receive less than 1.4 billion US dollars in orders from the state, which the French Airbus will receive .

2. In Cherkassy, the property of the bankrupt plant Bogdan, owned by O. Gladkovsky , an associate of P. Poroshenko , is being sold .

On February 11, at the Prozorro.Sales site , the acceptance of applications for the auction scheduled for March 3, 2022 for the sale of Bogdan Motors Automotive Company PJSC, which declared bankruptcy , began 11.

The joint-stock company "Bogdan Motors" is owned by Oleg Gladkovsky . This is the former First Deputy Secretary of the National Security and Defense Council, known for the major corruption scandal of 2019 .

In 2021, the Economic Court of the Dnipropetrovsk region declared the corporation bankrupt. The total amount of creditors' claims is UAH 6.7 billion 12.

The business empires of big businessmen are based solely on a non-competitive corrupt position, when one or another financial and industrial group in power provides preferences to its close entrepreneurs. As soon as P. Poroshenko was not in power, the Bogdan corporation was declared bankrupt.

3. The law on the "legalization of cryptocurrencies" came into force.

On February 17, the Verkhovna Rada at a meeting for the second time adopted bill No. 3637 on virtual assets, which was vetoed by President Volodymyr Zelensky in October 13.

This Law is an element of the policy of total fiscalization pursued by the authorities of Ukraine . The authorities are trying to tax the crypto -currency savings of citizens and apply financial monitoring rules to them .

4. The EU continues to increase its influence in Ukraine by providing loans in exchange for reforms.

On February 16, the European Parliament voted for a proposal to allocate a 1.2 billion euro loan to Ukraine 14.

The concessional loan within the framework of assistance will be divided into two tranches of 600 million euros each 15. Ukraine will receive the first part as soon as the Council of Europe approves the decision, and the EU and Ukraine approve the Memorandum of Understanding. The document will define the structural reforms, the implementation of which is necessary to receive the second part of the assistance.

To receive the second tranche, Ukraine will have to work. The condition for obtaining it is the fulfillment of the Memorandum. Ukraine must also comply with all structural requirements agreed with the IMF. The approved macro -financial support is aimed at supporting the implementation of structural reforms, as well as encouraging the implementation of measures defined by the Association Agreement with the EU. The EU notes that during the first IMF review of the stand-by program in November 2021, the Fund stated the following: restricting access to financial markets this year will increase Ukraine's need to finance the balance of payments deficit by at least $2.5 billion. In addition, the geopolitical aggravation that began back in November is leading to an outflow of capital, the weakening of the hryvnia and the depletion of international reserves. In order to provide financial assistance to Ukraine, the European Commission will issue bonds with a maturity of up to 15 years. In addition to the main €1.2 billion credit line, the EU plans to allocate €120 million in grant funds to Ukraine for projects aimed at maintaining the country's resilience.

5. The growth of pensions will exceed inflation by 0.88%.

On February 16, the Cabinet of Ministers ordered to index pensions from March 1, and also increased payments for vulnerable segments of the population 16. The task of indexation is to cover the rise in prices. Thus, more than 10 million citizens will receive an increase. The average increase is UAH 260, the minimum is UAH 100. So, from March 1, an indexation of 14% will also be carried out for payments to military personnel (on average +705 UAH), disability pensions for victims of the Chernobyl disaster (+1100 UAH) and additional payments to citizens aged 75 and over (+456-570 hryvnia). For those whose pensions are not subject to indexation ( they were assigned within the last three years), from March 1, a monthly additional payment of UAH 135 will be made. The minimum pension payment for persons with an insurance record of 30/35 years and persons with a disability of group I will increase to UAH 2,300, and for unemployed persons with a shorter insurance record - up to UAH 2,100. Social assistance for persons with disabilities from childhood and children with disabilities; persons not entitled to a pension, and persons with disabilities receiving state social assistance , is set at the level of 2100 hryvnia. In addition, assistance for each child brought up in a large family is being increased to UAH 2,100.

According to the NBU, inflation at the beginning of 2022 slowed down from 10% in December 2021 to 7.7% in January 2022, while the initial target was 5% 17.

Edited by:

Ruslan Bortnik,

Daniil Bogatyrev.

The authors:

Daniel Bogatyrev,

Oksana Krasovskaya,

Andrey Timchenko.