Ukraine: Economic calm and political storm

Sergiy Gerasimchuk, Foreign Policy Council "Ukrainian Prism"

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Looming elections frequently intensify political processes quite dramatically in any country. Ukraine was not an exception. The last winter month was full of significant political events, radical statements and resonant discussions. The society is facing a difficult choice and fighting for electorate is getting more acute.

Domestic Policy

Fundamental decisions shadowed by corruption scandals

On February 7 the Verkhovna Rada of Ukraine (during the second reading and in general having 334 “for” votes) made amendments to the Constitution regarding Ukraine’s strategic course to become an EU and NATO member. Almost all parliamentary factions voted for these changes though time will show if these novelties in the Constitution will prevent Ukraine from turning back to the East.

Another significant and resonant development happened on the same day. The Ukrainian Parliament voted for the law on observers during Ukrainian elections. The document banned the observers from the aggressor-state and occupant from monitoring Ukrainian elections.232 MPs voted for this move. The law was criticized by the OSCE. Yet the decision of the Ukrainian Parliament was received with sympathy in the USA as the decision to ban Russian observers from the elections is believed to be well-grounded.

Some progress has been made in improving anti-corruption mechanisms. In particular, on February 22 the State Judicial Administration of Ukraine registered the Supreme Anti-corruption court as a legal entity. It is clear that this fact is an important step taken by the authorities; however, finishing the development of the entire anti-corruption vertical in Ukraine has been a rather time-consuming process that frequently was incomplete despite being under scrutiny both from Ukrainian society and international partners.

As for the developments in the last week of February, they clearly proved that there is still much work to be done in fighting corruption. Ukraine’s media space burst when the news of the corruption scandal in the top government echelons appeared. A high-profile journalistic investigation revealed the fact of illegal operations when purchasing spare parts for military hardware from the aggressor state. The investigators connect the reported facts with corruption schemes involving some officials close to the circle of the incumbent president This undoubtedly leads to Petro Poroshenko’s reputational damage, with the presidential elections looming in the near future. The National Anti-Corruption Bureau of Ukraine (NABU) launched its own investigation into the fact reported by the journalists.

The reputation of the authorities was further undermined when on February 26, the Constitutional Court of Ukraine declared unconstitutional Article 368-2 of the Ukrainian Criminal Code which deals with criminal liability for illegal enrichment. The NABU has already stated that striking down the article on illegal enrichment by the CCU is a step back in Ukraine’s anti-corruption reform. The Constitutional court decision is to be thoroughly examined by the EU, while EUACI, Anti-Corruption Initiаtive of Ukraine, has already made a statement that more ground should be given in order to declare Article 368-2 unconstitutional.


“Safe-haven assets”

Unlike Ukraine’s political front, its economy provides some peace and quiet. In fact, according to Oksana Markarova, Ukraine’s Minister of Finance, Ukrainian economy continues to grow 12th quarter in a row while the inflation rate is less than 10 %. Ukraine’s gold and foreign currency reserves reached a peak within the last 5 years.  

As for the country’s export, both President and Prime Minister quote promising figures: export of goods and services to the EU member states makes up almost 43%.

Foreign Policy

UN General Assembly and Kerch crisis sanctions

Just as in previous months the Russian aggression draws attention to Ukraine on the international arena. On February 20 at the UN General Assembly meeting the President of Ukraine made a statement that “Donbas literally became a production line for Russia’s killing machine”, providing significant figures of Russian armored combat vehicles, launch rocket systems etc. deployed at the temporarily occupied territories of Donetsk and Luhansk regions. The Ukrainian issue is not forgotten by European partners as well. EU foreign-policy chief Federica Mogherini announced that there is a political consensus on some further measures to be taken – personal sanctions in response to a naval clash in the Sea of Azov, Russian aggression against Ukrainian sailors, in November 2018. Lithuania’s Foreign Minister Linas Linkevičius is even more radical stating that EU sanctions in response to Russian actions against Ukraine are “sometimes too little, sometimes too late”. And credit is due as the minister’s statement is supported by actions. Already in December 2018 Lithuania introduced national sanctions against 20 people involved in the attack and capture of Ukrainian sailors.

In his turn Donald Tusk, the President of the European Council, made an emotional address to the Verkhovna Rada of Ukraine in February 19, by his very appearance affirming the unchanging support of EU institutions for Ukraine. He also declared his support for Ukrainian people and stated that the EU will not tolerate the Russian aggression in the Azov Sea.