After a relative lull in January, February for Ukraine was rich with various events. Most of them had a unifying topic, namely the situation in Donbas and certain areas of Donetsk and Luhansk regions as well as relations with Russia. In this context, some progress on European and American tracks gave reason to cautious optimism.
“Donbas” in domestic policy
At the beginning of the month Ukrainian political space was stirred up after the interview of the German Ambassador to Ukraine Ernst Reichel for RBC-Ukraine. The Ambassador conceded that the elections in the occupied part of Donbas could take place even in the presence of the Russian army. He stated that everything depends on the conditions in which these elections would be held. The Ambassador’s statement became a catalyst for the already acute political dialogue between Ukrainian political forces. Questions have been raised both about the future of certain areas of Donetsk and Luhansk regions, as well as about the legitimacy of economic cooperation with the separatists. On the one hand, the President of Ukraine and the political parties supporting him recognize the need for such cooperation. The situation in the Ukrainian energy sector might deteriorate without coal from Donetsk. On February 16 the President even enacted the decree of the National Security and Defense Council “On urgent measures to neutralize threats to energy security of Ukraine”. On the other hand, opposing politicians call for restraining the blockade of the occupied parts of Donbas, avoiding “trade on blood”. The situation grew into a clash between the supporters of the blockade (mainly the representatives of volunteer battalions and the Organization of Ukrainian Nationalists) and law enforcement agencies on February 19, the third anniversary of the shootings of Heavenly Hundred on the Independence Square in Kyiv.
There is reason to expect that the issue of Donbas will continue to remain relevant to Ukrainian political establishment and in case of early parliamentary elections (such a scenario cannot be excluded) will be used by different players as a marker definition of “friend-or-foe”.
Economy: The impact of Russian aggression
The economy of Ukraine maintains a moderately positive trend. On February 24, the Prime Minister of Ukraine Volodymyr Groysman admitted that in 2017 GDP growth is to surpass 3%. At the same time, Ukrainian authorities are trying to limit the risks arising from the conflict with Russia. In particular, the National Bank of Ukraine has strengthened measures to prevent capital outflow to the Russian Federation by adopting a corresponding regulation on February 21, 2017. In addition, Kyiv Commercial Court of Appeal upheld the decision from December, 5, 2016, according to which “Gazprom” is obliged to pay a fine and a penalty imposed by Anti-Monopoly Committee for the transit market excessive use (about $6.4 billion).
Foreign Policy: Moderate achievements
As for developments in the foreign policy, they were mainly related to Russian-Ukrainian relations and the war in Donbas. On February 12, the head of the Ministry of Foreign Affairs of Russia Sergei Lavrov said that Ukraine needs to go back to the idea of decentralization. He insists that the United States, EU, Ukraine and Russia have already approved this idea on the ministerial level in April 2014. In its turn, Ukrainian leadership gave no encouragement to the Russian side initiatives, relying on Western support.
The reason behind optimism in Kyiv is tougher rhetoric of the White House
The reason behind optimism in Kyiv is tougher rhetoric of the White House. On February 15 the US Secretary of Defense James Mattis appealed to NATO member-states to address Russia from the position of strength, US Secretary of State Rex Tillerson at a meeting with Sergei Lavrov called on Russia to keep the Minsk Agreements, and on February 26, the United States urged Russia to immediately cease fire in the Donbas.
Certain progress has been made in the European direction. On February 23, the Dutch Lower Chamber of Parliament officially confirmed the ratification of the EU-Ukraine Association Agreement. Now to complete the ratification by the last EU country Ukraine has to wait for ratification in the Senate, after which the last ratification instruments will be sent to Brussels.
Approving the mechanism for the suspension of the visa-free regime with third countries by the Council of the European Union on February 27 can be considered the greatest achievement of the month. It unblocked EU approval of visa free regime with Ukraine and gives the country a chance to join in together with Moldova and Georgia.
