Ukraine: Political spring break, economic downturn and waiting for “visa-free regime”

Sergiy Gerasymchuk, Foreign Policy Council "Ukrainian Prism"

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With a political instability and a looming threat of the political struggles escalating in the background, the MPs made a decision to take some time off and announced the spring recess in the Parliament. Yet the economy of the country saw a decline while foreign policy, on the contrary, was successful and made progress

Domestic Policy: Postponed “event of the year”

The government reporting on its work should have become the ultimate event of the year in the Ukrainian politics. 14 April marks the end of the immunity period for the Cabinet of Ministers, which was the result of the Parliament voting for the program of the governmental activity a year ago. Therefore, Verkhovna Rada has a right to either approve the further activity of the Groysman’s Cabinet or pass the motion of no confidence and dismiss the government. Despite many political powers expecting the report, and the government itself not ruling out this possibility while the Prime Minister called for a correspondent press conference, in the end the Cabinet failed to present the results of its work in the Parliament. On 14 April Verkhovna Rada held a morning meeting, after which the vice-speaker Iryna Herashchenko announced a spring recession until 16 May. Therefore, the decision on the fate of the incumbent Prime Minister is yet to be made.

Economy: Forecasts worsen

The economic situation in Ukraine did not demonstrate stable dynamics in April. On the one hand, the National Bank of Ukraine had an opportunity to purchase a currency surplus at the interbank currency market, as well as got a 100 million loan  from the Swiss National Bank. This amount was enough to service Ukrainian debts and current operations of the government and the National Bank. Positive dynamics also featured in export, which, according to the State Statistics Committee of Ukraine, increased in the first months of 2017.

At the same time, the international ratings agency Fitch lowered 2017 forecast of GDP growth in Ukraine from 2,5% to 2%. Furthermore, Fitch affirmed the Ukraine’s long term foreign- and local- currency issuer default ratings at B- with a stable outlook. B ratings  indicate that some material default risk is present, but the limited margin of safety remains.

Concerns are expressed regarding the risk of the foreign partners cutting their economic help. Namely, the Administration of the President of the USA Donald Trump is expected to cut USAID financial assistance to Ukraine from $571 million to $177 million 800 thousand.

Foreign Policy: Visa-free regime and the Hague

The Ukraine’s biggest success in April was a progress to its long awaited visa-free regime with the European Union. On 6 April the European Parliament voted for the visa-free regime  for the citizens of Ukraine, and on 26 April the Committee of Permanent Representatives in the EU (COREPER) approved it as well. Therefore, Ukraine entered the final stage on its way towards visa-free travel to the European Union. Visa-free regime is finally expected to function starting this summer.

The court ruled that Russia must refrain from imposing any limitations on the activity of Mejlis of the Crimean Tatars, and put an end to the minority discrimination in the Crimea

Some relative success was made in the landmark case of Ukraine vs. Russia at the International Court of Justice. At the very least, the highest UN Court urged Russia to fully implement the Minsk agreements. According to the President of Ukraine Petro Poroshenko, it means that the court recognized Russia as a conflicting party in the East of Ukraine. Moreover, the court agreed with the key claims made by Ukraine  on the elimination of all forms of discrimination, and ruled that Russia must refrain from imposing any limitations on the activity of Mejlis of the Crimean Tatars, and put an end to the minority discrimination in the Crimea. Even though Moscow is unlikely to agree to such court rulings, Ukraine gained the advantage of an additional juridical argumentation to resist the Russian aggression.

The attempts to reach some progress within a Normandy format have not been dropped yet. The Normandy four leaders held phone talks on 18 April. The parties confirmed their commitment to fulfill the Minsk agreements regarding the security issues and the political regulations