January 23, 2017

Week's News Express Analysis № 03(34)/01


(January 16–22, 2017)


I. Major-Profile Events in the Development of the Situation around Ukraine

The decisive event in the development of the situation in the world and around Ukraine, which will directly impact the interests of our State was the official taking the office of the new President of the United States D. Trump after his inauguration on 20 January, 2017. On the same day, were made public the main directions of his administration's actions, providing for strengthening of the USA's role as the leading state of the world; strengthening the security of the country and its citizens; creation of favorable conditions for the development of the national economy; improving living standards of the American people and resolving their most pressing social and economic problems.

As part of the practical implementation of these plans, D. Trump announced his first steps as the President of the United States, in particular on the USA's withdrawal from the international trade and economic agreement “Trans-Pacific Partnership”, partial cancelation of the health care reforms initiated by B. Obama, and confirming General J. Mattis the US Secretary of Defense. Besides, the new US President announced plans for renegotiation on the North American Free Trade Agreement; ensuring US energy independence from OPEC and countries conducting hostile policies; building up the capacity of the American Army and Navy; to improve guarding the border with Mexico, as well as to intensify the fight against international terrorism.

It is significant that neither in D. Trump's inaugural speech, nor in the main directions of the activity of its administration, Russia is mentioned, which had been one of the main themes of political conflicts (including disagreements and scandals) around the new US President. Given the current situation, the reason for this is D. Trump's desire to avoid another wave of political speculations relating to his attitude to Russia. The issue became particularly relevant against the backdrop of mass protests that accompanied D. Trump's inauguration.

However, D. Trump's attitude to Russia, actually specified in a number of his statements and interviews on the eve of the inauguration, involves building relationships with Moscow from the positions of strength and on the basis of purely American interests. More candid views on Russia were expressed by the candidates for key positions in D. Trump's administration. In particular, during the hearings in the US Congress candidates for the posts of Secretary of State — R. Tillerson, the Minister of Finance — S. Mnuchin, Secretary of Defense — J. Mattis, Director of the CIA — M. Pompeo and US Ambassador to the UN — N. Haley called Russia the main source of threats to the United States, condemned the Kremlin's actions in Ukraine and Syria, and rejected the possibility of recognizing the Crimea's “belonging to Russia”. At the same time, they have supported the need to maintain the international political and economic sanctions against Russia.

In connection with this, there is a certain change in the tone of Russian media's publications — namely, a turn from euphoric expectations of rapid change in the US policy in favor of Russia to more pragmatic estimates of the future of the Russian-American relations. Thus, according to First Deputy Prime Minister of Russia I. Shuvalov, the United States and the EU's lifting of the sanctions against Russia can happen not sooner than the end of this year. A similar forecast was made by the head of the Russian state corporation “Rosnano” A. Chubais, who said there the Western sanctions policy against Russia won't change in the near future.

In his turn, the Russian President's Press Secretary D. Peskov denied his previous statements about the possibility of V. Putin's meeting with D. Trump in the nearest future. According to D. Peskov, the organization of such a meeting will take several months.

At the same time, representatives of the Russian leadership continue to express hope for possible improvement of relations between the USA and Russia (as the “manifestation of common sense on the part of the new administration of the United States”), and deny the Kremlin's interference with the elections in the United States and Russia's having compromat (compromising materials) on D. Trump.

Besides, the Kremlin pays special attention to justification of Russia's actions against Ukraine. First of all, in this regard, it highlights the “state and military coup” in Ukraine in February 2014 that “posed a threat to residents of the Crimea from the Ukrainian nationalists”.

They give the parallels between the “Revolution of Dignity” in Ukraine and D. Trump's opponents in the United States. On the basis of these comparisons they draw conclusions about “the need to unite the USA and Russia's efforts to counter political extremists”.


Against this background, an important international event was the World Economic Forum in Davos (January 17-20, 2017), held under the motto “Responsible Leadership”. The agenda of the Forum included a discussion of globalization and liberalization of the world economy in the context of these trends' possible replacement with isolationism and politico-economic selfishness of the leading countries of the world.

The Forum was attended by the leaders of several dozens of countries, including President of Ukraine P. Poroshenko, as well as representatives of big businesses and different international organizations. At the same time, the higher officials of the new US administration and Russia refused to participate in this event.

D. Trump's absence at the Forum was explained by his principle position on the priority of the US domestic economic development over the problems of the world economy. In his turn, Russian President V. Putin and the head of the Russian Government D. Medvedev have not been attending such events since 2014, which is a result of negative changes in the international community's attitude to the leadership of the Russian Federation due to Russia's armed aggression against Ukraine. Besides, Western sanctions against Russia and the critical aggravation of problems in its economy have significantly reduced the interest of potential partners in the Russian Federation.

Considering the above-said, a leading member of the forum this year was China, which showed the PRC's reaching a qualitatively new level of the main leader of the world economy. A public recognition of this fact was the opening of the Forum by President of China Xi Jinping. In this keynote speech, he called for the continuation of the process of globalization of the world economy and the openness of world markets, but also condemned the protectionist and isolationist measures in some countries. In particular, in this regard, Xi Jinping expressed concern about new US President D. Trump's attempts to complicate the PRC's access to the American market.

In view of the above-mentioned circumstances, other participants of the Forum pointed out the threat of increasing disagreements between the USA and China in trade and economic sphere, which can be a major challenge to sustainable development of the world economy. Besides, they called significant global problems the growing influence of populists in the Western world, which is a consequence of the crisis of the middle class and growing socio-economic problems in the United States and in the European Union.

The World Economic Forum in Davos was of great importance for our country in terms of the possibility of giving a broad and objective coverage of the situation around Ukraine in connection with Russia's armed aggression. At this, Ukraine's position was supported by most of the leading countries of the world, including by China's President Xi Jinping. The PRC's leader supported the territorial integrity and sovereignty of Ukraine and expressed readiness to develop trade and economic cooperation with our country.

In his turn, the current at that moment US Vice President G. Biden accused Russia of leading an aggressive foreign policy, and urged the international community to continue the policy of supporting Ukraine and containing Russia. Similar positions were expressed also by representatives of the leaderships of the EU and leading European countries.

Besides, evidence of the international community's increased attention to Ukraine was President of Ukraine P. Poroshenko's meetings with the new UN Secretary General A. Guterres, the High Representative of the European Union for Foreign Affairs and Security Policy F. Mogherini, Managing Director of the IMF C. Lagarde, President of the EBRD S. Chakrabarti, and with the leaders of more than 10 countries.


II. Russia's Armed Aggression against Ukraine

2.1. The East of Ukraine (The ATO Zone)

Last week's main political events in the development of the situation around the conflict in the Donbas were the next (the first this year) meeting of the Trilateral Contact Group in Minsk on January 16, 2017; new OSCE Chairman S. Kurtz' visit to Moscow on 18 January, 2017; and the discussion of the situation in the East of Ukraine during separate telephone conversations of President of Ukraine P. Poroshenko and Russian leader V. Putin with Federal Chancellor of Germany A. Merkel and French President F. Hollande.

Within the framework of these activities the Russian leadership continued its policy of imposing on Ukraine and its European partners Russia's terms of “settlement” of the situation in the Donbas. In its turn, Ukraine adhered to a firm position to defend its national interests, that is supported by the leadership of the OSCE and the EU's leading countries.

Thus, during the meeting of the Trilateral Contact Group in Minsk, the Russian side again raised the question of the need to implement the so-called Steinmeier's formula (provides for resolving political issues of settling the situation in the Donbas in parallel with security ones). In turn, Ukraine stated Russia's not fulfilling the ceasefire arrangements, and took the initiative to recognize the conflict in the Donbas a foreign aggression against our country (as it is already done by the UN General Assembly regarding the fact of Russia's occupation and annexation of the Crimea). At this, due to the “DPR”/“LPR” leaders' unacceptable (for the Ukrainian side) demands, again the issues of exchange of prisoners of war and hostages were not resolved.

The above-mentioned Russia's position was confirmed by Russian Foreign Minister S. Lavrov during talks with OSCE Chairperson S. Kurtz. According to S. Lavrov, Ukraine could gain control of its eastern border only in case of adoption of laws on special status of “DPR” and “LPR” and amnesty for militants, as well as holding elections in the breakaway republics — in agreement with their “leaders”. The Minister of Foreign Affairs of the Russian Federation announced Moscow's agreeing to monitoring of the elections by unarmed OSCE observers that should prove the “freedom and security of the expression of will by the population of the region”.

In his turn, S. Kurtz raised questions about the need to expand the OSCE Special Monitoring Mission in the Donbas and organization of the round-the-clock monitoring of the front line. He also pointed out the possibility of lifting the EU sanctions against Russia only in the case of a complete fulfillment of the Minsk Agreements. At the same time, according to S. Kurtz, this would not involve the sanctions imposed against V. Putin's regime for the annexation of the Crimea.

At the same time, during the telephone conversations of the Presidents of Ukraine and Russia with the leaders of Germany and France, an agreement was achieved to continue the dialogue in the “Normandy Format”. Besides, they acknowledged the continued differences in the positions of Russia and Ukraine concerning the principles and mechanisms for resolving the situation in the Donbas mechanisms.

Against this background, despite the previously reached peace agreements, the Russian-terrorist forces continued shelling the ATO forces' positions and civilian settlements with an average intensity of 35 to 55 per day.


2.2. The Crimean Peninsula

Within the framework of Moscow's general policy, aimed at justification of its actions against Ukraine, in January of this year, the occupation authorities of the Crimea drafted a UN resolution on “Human rights violations in the Crimean Peninsula when it was part of Ukraine”. The draft was prepared in response to the adoption by the UN General Assembly in December 2016 of the Resolution “Situation of the Human Rights in the Autonomous Republic of the Crimea and Sevastopol (Ukraine)”, where the United Nations for the first time clearly called Russia a country-occupier and the Crimea and Sevastopol — the occupied territories.

However, due to Western sanctions against Russia, the situation with the construction of a bridge from Russia to the Crimea through the Kerch Strait is becoming more and more difficult. In particular, as a result of private companies' refusal to participate in the construction of access roads to the bridge, the Russian government actually in invitum entrusted this to the “Stroygazmontazh” company, which is building the bridge itself. The head of the company is close to V. Putin Russian businessman A. Rotenberg, who already is under Western sanctions.


2.3. Other Aspects of Russia's Actions against Ukraine and the West

In order to influence the positions of Western countries and international organizations, the Russian leadership continues taking active measures for making the split between the United States and Europe, undermining the unity of the EU, weakening of NATO, and creating a “front” of Russian supporters in the European Union and in the former Soviet territories.

In particular, for this purpose the Kremlin widely uses quite emotional and often “undiplomatic” D. Trump's statements on “errors of Germany and France's immigration policy”. This is presented by Russia as evidence of “profound differences” between D. Trump and A. Merkel with F. Hollande. At the same time, the allegedly “pro-Russian” position of D. Trump is opposed to the positions of the leaders of France and Germany, who are the main agents of the European policy of pressure on Russia and support to Ukraine.

Similarly treated are D. Trump's statements on the need to strengthen the anti-terrorist component of NATO's activity and the fulfillment by member states of their financial obligations to the Alliance. Accordingly, the Russian mass media speak about the “intentions of the new US President to abandon the NATO” or “to revise the previous decisions of the leadership of the Alliance on concentrating NATO's main efforts on deterring Moscow”.

Besides, Russia is actively working with pro-Russian forces in the EU, in the Balkans and in the former Soviet Union. In particular, the result of such actions of Moscow are the statements made by: French presidential candidate Marine Le Pen on “the Crimea's belonging to Russia”; Italian Foreign Minister A. Alfano on the need to return Russia into the format of the “Big Eight”; President of Serbia T. Nikolic's readiness to send an army to protect the Serbs in Kosovo; President of Moldova I. Dodon on the country's possible withdrawing from the Association Agreement with the EU.

Russia also continues its actions to put pressure on Ukraine in the energy sector. January 16, 2017, the Russian company “Gazprom” send to “Naftogaz of Ukraine” a claim in the amount of 5.319 billion US dollars regarding the payment for the gas not taken by the Ukrainian side in the second–fourth quarters of 2016. According to forecasts of experts in the issues of Ukrainian-Russian relations in the gas sphere, if Ukraine does not fulfill these demands, Russia will resume accusing our State of “stealing gas”.

As before, such Moscow's actions are accompanied by demonstrations of force, including in the sphere of nuclear arms (it is possible, that as a response to D. Trump's words about the possibility of lifting the sanctions against Russia in exchange for a reduction of its nuclear arsenal). Thus, on 16 January 2017, from Plesetsk cosmodrome for the first time this year was launched an intercontinental silo-based ballistic missile “Topol-M”.


III. Ukraine, International Organizations and Leading Western Countries

3.1. International Organizations

The European Union. January 17, 2017, Italian politician, representative of the European People's Party — Antonio Tajani was elected the new President of the European Parliament (EP). According to the new EP President's statements, he will continue the implementation of the previous program of the European Parliament. At this, the priorities of his work will be as follows: development of the EU's economy and energy sphere, as well as the fight against terrorism, creation of new jobs and protection of European values at the global level. However, due to A. Tajani's certain pro-Russian views, we should not exclude weakening of the EU's support to Ukraine and the European Parliament's resuming cooperation with Russia.

Despite this, the EU High Representative for the Common Foreign and Security Policy, F. Mogherini has rejected the possibility of changes in the EU's common policy towards Russia and the Ukraine. According to her, the EU will maintain sanctions against the Putin regime to its full implementation of the Minsk Agreements and returning the Crimea to Ukraine. In particular, on January 19, 2017, the governing bodies of the European Union discussed the issue of the continuation of the first packet of non-sector sanctions against Russian officials involved in the annexation of the Crimea and the provocation of the conflict in the Donbas. A decision on this issue is expected to be taken in February.

NATO. The leadership of the Alliance preserves its strong position in support of Ukraine. This was confirmed by the Chairman of the NATO Military Committee, General P. Pavel on 17 January 2017, during the NATO-Ukraine special meeting. According to him, the change of the US administration will not affect NATO's plans to deepen cooperation with Ukraine in the sphere of defense.


3.2. Leading Western Countries

The United Kingdom. Despite Great Britain's plans to withdraw from the EU, its government shows the firmness of its plans for further development of partner relations with Ukraine. Thus, according to statements by the British Defence Minister Michael Fallon, London “is not going to forget Ukraine” and will provide assistance to strengthen its Armed Forces.

In particular, in the nearest future the UK plans to launch training program for the Air Force of Ukraine with the assistance of British military instructors. Since the beginning of Russia's armed aggression against Ukraine, about 5,000 Ukrainian military servicemen have been trained with the assistance of the UK.

Besides, M. Fallon advocated the need for the continuation of sanctions against Russia till its full implementation of its international obligations.

CEE and Baltic Countries. In the conditions of increasing threats from Russia, the countries of Central and Eastern Europe and the Baltic states are paying greater attention to issues of national security in the military sphere. According to Minister of Defence of Poland A. Macierewicz's statement of 17 January 2017, despite the deployment of US and NATO troops in Poland, Warsaw will continue its efforts to strengthen its own armed forces, able to withstand the Russian pressure. In particular, in this regard Poland will continue activities to create territorial defense troops with the main task of countering Moscow's “hybrid” wars. In turn, on 17 January 2017, Lithuania and Estonia signed a bilateral defense agreement with the US, which formalizes the presence of US troops and carrying out multilateral exercises in these countries.


IV. Other Important Trends and Developments that Affect Ukraine's National Interests

Russia. Russian experts continue to estimate the results of Russia's socio-economic development in 2016, which in many cases contradict the official statements by top state leadership of the Russian Federation. Thus, there is a further reduction in real incomes of the Russian population, which leads to an increase in the level of poverty in the country. To date, according to the criterion of lack of funds for the purchase of food and essential goods, 40 % of the population of Russia consider themselves poor. Thus, as of the end of 2016, purchasing power of the Russian citizens on average had decreased by 8 % compared to the end of 2015.

All this leads to further growth of protest moods in Russia. In particular, the leaders of the Russian movement of “truckers” are planning to move from individual actions of protest such as blocking roads and “marches” on Moscow — to conducting systematic strikes in terms of refusing to transport goods under one pretext or another. According to activists of the movement, it would threaten with the paralysis of the country's transport system, that will be a powerful lever of pressure on the government.


V. Major Trends in the Development of the Situation around Ukraine in the Future

5.1. Key Events and Trends that Will Be Most Important for Ukraine

In the current situation around Ukraine in the short and longer term, the principal value for our State will have the character of future US policy towards the Russian Federation. Thus, based on the analysis of the new US administration's priorities, Washington's main strategic interests regarding Russia may include the establishment of cooperation between the parties in the spheres of nuclear disarmament and the fight against international terrorism.

It is in these spheres that the United States may go to a certain rapprochement with Russia, including at the expense of Ukraine. At the same time, the United States are believed not to agree to the transfer of Ukraine into Russia's sphere of influence, as it would mean a significant strengthening of Moscow's positions. In its turn, this would undermine the value of the United States as the leading power center in the world, which is directly contrary to American interests. Besides, the USA's concessions to Russia would cause stiff resistance from the US Congress, which would have negative consequences for President D. Trump.

Based on this, we should expect the establishment of relations between the USA and Russia in the form of a “demonstration of willingness to compromises, but not their actual achievement”. A manifestation of this approach was D. Trump's statement about the possibility the USA's lifting sanctions against Russia if Moscow reduces its nuclear weapons (which is unacceptable for Russia, and was rejected by the Kremlin). In this context, the question of sanctions will remain the main lever of the USA's influence on Russia. At this, D. Trump can use the tools of sanctions policy in favour of the USA's economic interest to undermine Moscow's positions on the world markets of weapons and energy.

This USA's approach would have extremely negative consequences for Russia from the point of view of the failure of the prospects of a quick cancellation of Western sanctions as a prerequisite for improving the state of the Russian economy. With this in mind, the Russian leadership will continue to work actively to persuade the USA to change its policy towards Russia. As part of this work the Kremlin will use both, political and diplomatic channels, and the Russian lobby in the United States and the Russian special services. Moreover, Putin's regime will strengthen the information campaign to disguise and curvature in its favor the USA's real politics, the state of the US-Russian relations and the situation in Russia.


5.2. Prospects for the Development of Events in the Conflict Zones in Ukraine

The nature of relations between the USA and Russia will have a direct impact on Moscow's policy towards Ukraine. Thus, after a certain decrease in the activity of the Russian-terrorist forces for the period of D. Trump's inauguration, we should expect another intensification of hostilities in the conflict zone. This will be aimed at both, putting pressure on Ukraine and its Western partners, and discrediting our State before the new leadership of the USA by accusing Ukraine of non-compliance with the Minsk Agreements.

At the same time, Russia will keep delaying the process of peaceful settlement of the situation in the Donbas (including of the adoption of the “road map” for implementation of the Minsk Agreements) counting on exhausting Ukraine and in anticipation of possible changes in the USA's policy.


5.3. Other Important Events that Will Have an Impact on Ukraine's Interests and Security

After the World Economic Forum in Davos, which showed preservation of the world community's attention to Ukraine, the next “platform” to voice our state's position can become the Munich Conference on International Security Issues on 17-19 February, 2017.

The theme and focus of the Conference will help to more fully raise the questions about the negative consequences of Russia's armed aggression against Ukraine for European and world security. Besides, the Conference is an opportunity for our country to draw the world's attention to Moscow's not fulfilling the Minsk Agreements, and to possible changes in the format of international negotiations on the settlement of the Russian-Ukrainian conflict.

In turn, the Conference will be used by Russia as another reason for imposing on Ukraine and its Western partners Russia's terms of “settlement” of the situation in the Donbas. At this, V. Putin's regime will continue accusing Ukraine of “not fulfilling the peace plan”.

In this situation, of great importance for Ukraine will be our country's (as a non-permanent member's) presidency in the UN Security Council from 1st February 2017. Such a role of Ukraine will provide new opportunities for the promotion of Ukraine's interests in the UN, especially on the issue of completing the process of official recognition by the world community of the fact of Russia's armed aggression against our country.