The January holiday break in Ukraine resulted in drowsy dynamics of domestic political process. The impression of stability allowed international financial institutions to make cautious projections on its further economic development. Meanwhile, Ukraine’s active position on the international level and the attention paid to it by international players remain intense.
Domestic Policy: Christmas Lull
The season of January holiday break affected the dynamics of domestic political activity in Ukraine. Probably the most notable political statement was made by Verkhovna Rada Speaker Andriy Parubiy. He said that Ukraine is not going to have snap parliamentary elections in 2017. Despite the fact that such a scenario is being lobbied by Moscow both in Ukraine and in the Republic of Moldova, Ukraine will not follow Russia’s provocations, and the current coalition will remain united.
Despite Speaker Parubiy’s optimism, the risks of resumed political battles in Ukraine in the coming months are high since they are inspired both from the outside and from inside the country as well.
Economy: Cautiously Optimistic Forecast
The World Bank provides cautiously optimistic forecasts on the development of Ukraine’s economy in 2017. GDP is projected to grow 2%. This forecast will be realistic if there is positive security dynamics and political stability.
In February Ukraine is expecting the next $1 billion tranche from the International Monetary Fund, while the EU has pledged to provide 100 million Euro of additional assistance to establish the Energy Efficiency Fund.
Meanwhile, work continues on the reform of NaftoGaz Ukrayiny National Joint Stock Company. In particular, Board Chairman Andriy Kobolev said the company will be split and the function of gas transportation will be delegated to an independent operator. In addition to that, the company will no longer need to be subsidized and will even be able to contribute nearly 60 billion hryvna (approximately $2 billion) to the state budget. This optimistic forecast is based on the fact that the company’s profit exceeded 20 billion hryvna in 2016. Meanwhile, the government opponents claim that NaftoGaz profit growth is the result of increasing utility rates. Speculations on this issue are likely to continue.
Foreign Policy: Minsk Process, Red Lines and Hope that Springs Eternal
The topic shaping Ukraine’s foreign policy remains to be its conflict with the Russian Federation. In January the Ukrainian side outlined clear red lines regarding the conflict solution in the article of Deputy Chief of Staff Kostiantyn Yeliseyev published at the Wall Street Journal. According to Yeliseyev, Kyiv is not prepared to reject EU and NATO integration, has no intention to make concessions to Russia regarding the territory of the Autonomous Republic of Crimea and the Donbas, and will not consent to hold elections on the territory of the Donbas until Russian troops withdraw. According to the Russian side, the last point is not in line with the previous Minsk Accords (Moscow agrees to return control over the border to Ukraine only after local elections are held in the Donbas).
Ukraine prepared a lawsuit against Russia and filed it with the International Court of Justice in the Hague
Another January scandal was the statement made by Marine Le Pen, the leader of the National Front and a candidate for presidency in France, who said that the annexation of Crimea was not illegal, and Ukraine’s response to it: the Security Bureau of Ukraine (SBU) put her on the persona non grata list.
Also, Ukraine prepared a lawsuit against Russia and filed it with the International Court of Justice in the Hague. In it, Ukraine blames Moscow for violating international conventions in Crimea and the Donbas.
At the same time, there was a fairly sharp statement made by Sebastian Kurz, Minister of European, Integration and Foreign Affairs of Austria, the country that chairs the OSCE this year. During his visit to Ukraine on January 3 – 4, he made the following statement: even though the issue of Ukraine remains a priority for the Austrian Chairmanship, the efforts of the OSCE in the regulation of the conflict are not sufficient and the Minsk Accords should remain the foundation for the negotiating process.
Federica Mogherini, the High Representative of the European Union for Foreign Affairs and Security Policy, mentioned the need to fulfill the Minsk Accords among the priorities of 2017.
The Kremlin, too, does not see any reason for amending the Minsk Accords, as Russia’s Foreign Minister Sergey Lavrov stated clearly, while German Chancellor Angela Merkel and French President Francois Hollande have agreed with the Russian President to preserve the Normandy Format.
Before the end of his term in office, US Vice President Joe Biden visited Ukraine on January 16. During his meeting with Ukraine’s President Poroshenko he also stated that the fulfillment of the Minsk Accords is Ukraine’s best hope to move forward as a united country. In his response to the question of Ukrainian journalists on how Kyiv relations with the Trump Administration will develop, Mr. Biden said: “Hope springs eternal”.
