The last month before the political summer break brought some significant developments. The head of Ukraine’s National Bank resigned which brought about stirring up the currency market. Meanwhile, the attempts to make amendments to the legislation on education spawned tensions in the hot language issue. The statements of Hungary’s ambassador in Ukraine resulted yet again in strenuous relations between Hungary and Ukraine.
Domestic Policy
Hyperactive Parliament ahead of Summer Break
Early June brought some high-profile appointments and resignations in Ukrainian political establishment. On July 1 Yakiv Smolii, the head of NBU (National Bank of Ukraine – the central bank of the country), submitted his resignation to the President of Ukraine. The motivation behind such a decision was systematic political pressure. In just two days MPs approved such a decision by 286 votes. This is quite an extraordinary event (Smolii was supposed to act as NBU’s Head until 2025) and it spawned light panic at Ukraine’s currency market. Among other things, some questions were raised by Ukraine’s international partners and creditors: one of the main conditions of receiving IMF’s next tranche was the independence of the central bank.
Two weeks later Kyrylo Shevchenko, who had previously acted as the head of one of Ukrainian state banks, was appointed the main banker of the country by 332 votes. It is worth noting that two pro-European parties – “European Solidarity” and “Voice” (or “Holos”) – did not give a single vote for appointing the new head of the National Bank.
However, the parliament’s work was not limited to resignations and appointments. In the middle of July MPs, despite the outbreak of COVID-19 epidemic in the country, adopted the bill to hold upcoming local elections in late October.
Another significant development happened when a draft bill by M. Buzhansky, a member of a ruling party, on the state language in terms of learning process, was “frozen”. Among other things, this draft bill provided for the cancelation of some chapters of the law on language – namely, the one on pupils of 5-11 classes in Russian-language schools switching to studies in Ukrainian starting from September 1, 2020. The notorious draft bill got neither the support of the profile committee nor the support of some MPs and was not part of the session.
However, if the “battle” for Ukrainian as the main language of education was won in the Verkhovna Rada, “the war” is still ongoing. The battle moved to the Constitutional Court of Ukraine. At the beginning of the month the latter launched the claim made by 51 MPs of the previous convocation – mostly members of the parliamentary faction of the pro-Russian “Opposition Bloc” on compliance with the norms of the Constitution of Ukraine and its law “on ensuring the functioning of the Ukrainian language as the state language”.
Economy
NBU, IMF, Eurobonds and Eternal State Budget Deficit
Kyrylo Shevchenko, recently appointed head of the National Bank of Ukraine, despite all the pessimistic forecasts, started by holding a meeting with IMF representatives – IMF mission chief to Ukraine Ivanna Vladkova Hollar, the IMF resident representative in Ukraine Goesta Ljungman, and IMF alternative executive director Vladyslav Rashkovan. During the meeting, the leading banker of the country highlighted that IMF has always been and will continue to be Ukraine’s key strategic partner in general and the partner of the National Bank in particular. The head of the central bank also reassured his western colleagues that full and complete implementation of IMF cooperation is his personal priority among other things. To reduce the level of gossip surrounding NBU’s independence, Kyrylo Shevchenko comforted the representatives of international organizations that he has the outmost respect for the independence of the National Bank. Against the backdrop of banking twists and turns the State Treasury Service of Ukraine found a fly in the ointment and reported state budget deficit making up UAH18,8 bn (approximately $671 mln) in the six months of 2020. However, things brightened up a bit when the news of Ukraine successfully settling record USD2 bn in Eurobonds of 12 years maturity came up.
“The resignation of the head of Ukraine’s National Bank spawned light panic at Ukraine’s currency market”
Foreign Policy
Non-Existing Truce
In late July in the framework of the TCG (Trilateral Contact Group – Ukraine, Russia and OSCE) another agreement was reached between the opposing sides, Ukraine and Russia, with OSCE acting as a mediator, with this agreement ensuring ceasefire and peace and calm for the population in Donbass starting July, 27. However, just as previous dozens of ceasefire agreements, this one was no exception: already during the first hours following reaching the truce Russian terroristic forces violated the agreement. Despite their bitter experience of “ceasefire agreements”, Ukrainian diplomats continue to actively cooperate with their western allies to create new formats in order to assure their support including their fights with the aggressor state, the Russian Federation. One of such formats is the so-called “Lublin Triangle”, the creation of which was announced on July 28 by the Ukraine’s minister of foreign affairs D. Kuleba during his visit to Poland. This triangle included Ukraine, Poland and Lithuania. According to the Ukrainian minister, the main focus of this format is “developing and strengthening Central Europe as well as establishing Ukraine’s role as a full member of European and Euroatlantic family”.
Ukraine manages to find common language with its Polish and Lithuanian partners. However, the situation remains controversial in relations with its Hungarian neighbors, despite recent visits and agreements. In his recent interview Hungary’s ambassador in Ukraine Istvan Íjgyártó stated that Hungary will continue to veto Ukraine-NATO commission meetings at the ministerial level due to particular three reforms, allegedly “extremely negative to Hungarians”, that are now being implemented in Ukraine. According to the ambassador, these reforms are the following: the administrative reform, the educational reform and the language use reform.
Photo: Former head of the National Bank Yakov Smoliy
Photo credits: https://biz.censor.net.ua/
