February 13, 2017

Week's News Express Analysis № 06(37)/02


(February 06–12, 2017)


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

The main positive factor in the development of the situation around Ukraine is the confirmation by Western countries and international organizations of their support to our State in its confrontation with Russia. Evidence of this was the consideration of the Ukrainian issue in the EU and NATO, as well as the relevant statements and comments made by the new US administration.

The European Union. The Ukrainian issue was one of the main topics on the agenda of the EU Foreign Affairs Council meeting on 6 February 2017. The participants of the meeting expressed their concern about the significant sharpening of the situation in the Donbas, and stressed the need for sustained implementation of the Minsk Agreements. At this, the EU High Representative for the Common Foreign and Security Policy, F. Mogherini supported the “Norman Four” and the OSCE's efforts to put an end to the armed conflict in the East of Ukraine.

In turn, a number of representatives of the EU, in particular the Minister of Foreign Affairs of Great Britain B. Johnson, directly accused Moscow of escalating the conflict in the Donbas. Given this, an agreement was reached on the need to continue the policy of sanctions against the Russian Federation. In March this year, the EU plans to continue the first package of non-sector sanctions against Russian officials, politicians and businessmen involved in Russia's occupation and annexation of the Crimea.

Besides, as part of the practical implementation of the Association Agreement between Ukraine and the EU, the European Union is taking steps to expand the Ukrainian goods access to the European market. In particular, since February 10, 2017, the anti-dumping duties were abolished for certain types of metal products of Ukrainian origin. In April 2017, the European Parliament is going to consider adopting other trade preferences for Ukraine.

NATO. Due to the aggravation of the situation in the Donbas, on 8 February 2017, there was an extraordinary meeting of the NATO-Ukraine Commission at the level of Permanent Representatives of the Alliance. The participants came up with the unanimous support to Ukraine. At this, they expressed a clear position on Russia's responsibility for the intensification of hostilities in the conflict zone.

Taking this into consideration, the representatives of the Alliance emphasized the impossibility of resumption of full-fledged relations with Russia, and recognized the need for the continuation of sanctions against it. Besides, they confirmed the priority of the Ukrainian issue for NATO.

Following the meeting, the sides agreed to strengthen political pressure on Moscow. In this respect, the situation around Ukraine will remain the main topic of the talks between the Alliance and Russia.

The USA. The new US administration's position on the Russian and Ukrainian issues was expressed by US Vice President Mike Pence in his interview to the media on 5 February, 2017. According to him, Washington and Moscow have a wide field for cooperation in the struggle against international terrorism. At the same time, the possibility of lifting the sanctions against Russia will depend on its fulfillment of the obligations of the ceasefire in the East of Ukraine.

This position has been officially confirmed by the Press Secretary of the White House S. Spicer, who supported US Ambassador to the United Nations H. Haley's statement about the need to maintain sanctions against Russia until the Crimea has been returned to Ukraine. According to S. Spicer, the question of lifting the sanctions from Russia because of its annexation of the Crimea is not being considered at all. However, now the US President D. Trump is studying the situation around the armed conflict in the Donbas, and then a decision will be taken.

The US Congress' positions regarding Russia are hard and fast. In particular, at the end of January 2017, the Congress considered a bill to allocate additional 100 million US dollars to expand the Interagency Office at the US State Department, which deals with counteracting other states' destructive propaganda. Additional funds will be spent to fight Russia's information expansion. Besides, a number of senators made a legislative initiative to introduce additional sanctions against Russia because of the worsening fighting near Avdiivka, to provide the US Congress with the right to veto the President's possible decision to lift sanctions against Russia.

In general, the above-mentioned positions of the USA, EU and NATO suggest a high probability of the West's sanctions against Russia being maintained, at least until July, 2017. In the future, depending on the situation, the sanctions against the Russian Federation relating to the events in the East of Ukraine, could be revised. However, the sanctions related to the Crimea, with high probability, will be kept intact (legally the US President cannot single-handedly lift those sanctions, or recognize the Crimea's “belonging to Russia”, as this would be contrary to the US law “STAND for Ukraine Act”.


A Bill H.R. 5094 “Support for Stability and Democracy in Ukraine” (apart from the official full name, it is known by the shortened one, with the acronym: “STAND for Ukraine Act”) was approved September 21, 2016 only by the House of Representatives (lower House), of the US Congress and before the end of 2016 had not gone through the approval procedure in the US Senate.

February 2, 2017, Republican Congressman Elliot Engel, in co-operation with 24 members of the House of Representatives (including the Republican and Democratic Parties), re-introduced this bill to the House of Representatives. It is registered under number H.R. 830 — “To contain, reverse, and deter Russian aggression in Ukraine, to assist Ukraine's democratic transition, and for other purposes”. According to the procedure, now it must be re-adopted by both the Houses of the Congress.

II. Russia's Armed Aggression against Ukraine

2.1.The East of Ukraine (The ATO Zone)

The worsening situation in the conflict zone in the Donbas continues to be a significant concern to the leading European countries. In particular, this issue was discussed during a special phone talk of German Chancellor A. Merkel with Russian President V. Putin on February 7. During the call, A. Merkel urged V. Putin to influence the pro-Russian militants to stop fire. In response, V. Putin once again accused Ukraine of provoking the conflict.

Despite the fundamental differences, the parties agreed on the need to prepare a new meeting in the “Norman” format. According to preliminary agreements, the issue of a cease-fire in the Donbas is planned to be discussed at the level of Foreign Ministers of Germany, France, Ukraine and Russia on the sidelines of the meeting of G-20 Foreign Ministers, who will meet on 16 and 17 February 2017 in Bonn.


The Summit of the leaders of states and governments, as well as representatives of international organizations within the framework of the “Big Twenty” (G20) will be held on 7 and 8 July 2017 in Hamburg (Germany).

However, Moscow's demonstrating its readiness for peace talks does not mean that Russia will stop provoking hostilities in the Donbas. Evidence of this is the continued active shelling of the ATO forces' positions and peaceful settlements by the Russian-terrorist troops almost along the entire front line. Besides, Russia is delivering additional military units, fuels, heavy weapons and ammunition to the occupied Donbas.

At the same time, quite illustrative is another series of “sudden deaths” and murders of the “DPR”/“LPR” leaders in January and February 2017. For example, on 27 January 2017, in Moscow “from heart attack died suddenly” the former leader of the “LPR” V. Bolotov. On the same day in Donetsk also “suddenly” died the so-called Deputy Minister of Industry and Trade of the Government of the “DPR” S. Tretyakov. February 4, 2017 in Luhansk was killed “Chief of the Militia Directorate” O. Anaschenko, and February 10, 2017, in Donetsk, in his office, by the shot from a flame thrower “Shmel” (“Bumblebee”) was killed the Commander of the Battalion “Somali” M. Tolstykh (“Givi”).


2.2. The Crimean Peninsula

Against the background of Moscow's declarative-populist statements about “the significant improvement of the economic situation in the Crimea as compared with the period of its being part of Ukraine”, the representatives of the occupying power of the Peninsula actually recognize the economic problems and impossibility of quick solving them. Thus, according to “the head of the budget committee” of the Crimea I. Lukashev, “...The Crimean Peninsula has completely exhausted its resources and has become a heavy burden for Russia”. At this, he acknowledged considerable difficulties in obtaining loans from Moscow, as well as the negative effects of Western sanctions, which in fact makes the development of the Crimean economy impossible.


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

The development of the political situation due to another escalation of the armed conflict in the Donbas since January 29 showed the failure of Moscow's attempts to deny its involvement in provoking the conflict and to shift the responsibility for it to Ukraine. Instead, Russia has not only lost some of its positions on the front line, but also created a new precedent for international condemnation of its actions, including by the new US administration.

With this in mind, the regime of V. Putin has stepped up an information campaign to discredit the Ukrainian leadership, accusing our government to “conscious steps to foment conflict in the Donbas region in order to create obstacles to the establishment of relations between the US and Russia.”

At the same time, Russia has again raised the question of “illegitimacy of the Ukrainian leadership” due to “the coup of 2014”. At this, it speaks about the USA and EU's support for “Ukraine's anti-people policy”, which supposedly is the “reason for the continuation of the conflict on the Ukrainian territory”.

To make such claims look more authentic and resonant, the Russian Federation involves in its propaganda activities representatives of the former Ukrainian government, which took refuge in Russia. Statements and interviews of these collaborators are presented as “eyewitness accounts of events taking place in Ukraine” and “the views of the majority of Ukrainian society”.

On the basis of such accusations, Russia conducted a coordinated diplomatic action in terms of Russian Ambassadors' to the leading Western countries (in particular the USA and the UK) appeal to the governments to “influence Ukraine to settle the conflict in the Donbas”.

Besides, within the framework of the general policy of discrediting Ukraine, Moscow is implementing another informational provocation against our country based on the “disclosure and cessation of the activity in the territory of the Russian Federation of a drug cartel “KhimProm”, organized in Ukraine”. In this regard, they report about “Russian law enforcement authorities' detaining about 50 Ukrainians, who were involved in drug trafficking”.


These actions of Russia in the information and diplomatic spheres were reinforced by a continuation of intensive activities of operational and combat training of the RF Armed Forces, similar to those carried out on the eve of the attack on Ukraine in 2014 and during the “Caucasus-2016” Strategic Command Post Exercise (SCPE) last year.

February 7–9, 2017, there was a sudden inspection of the combat readiness of the Aerospace Forces (VKS) of Russia. It included the 1st Air Defense Army and the 15th VKS Army (part of the Moscow Air Defence District), 4th, 6th, 11th, 14th and 45th Armies of the Air Force and Air Defense (subordinate to the Military Districts and the Joint Strategic Command “North”), and the Commands of the Long-Range and Military Transport Aviation.

In the course of the inspection they were mastering to counteract to an enemy's air attacks (in particular they tested Moscow's system of air and missile defense), as well as to conduct an air strikes using aircraft of the tactical and long-range (strategic) bombardment aviation (was deployed at forward airfields in western Russia). As part of the training combat activities, on 9 February 2017, two Tu-160 carried out a provocative flight along the coast of Northern Europe to the Eastern Atlantic.

At this, the Russian Federation's media, citing “military-diplomatic sources”, directly connected the inspection of the VKS with the worsening situation in the Donbas, including “Ukraine's plans to begin large-scale offensive to regain control over the lost territories”. As “evidence of such intentions” were cited “facts” of the alleged “massive movement of the Ukrainian troops in the area of the conflict zone”, as well as the training of the Ukrainian Air Force on the Eastern direction.

Against the background of these events, February 8, 2017, Director of the Department for weapons control of the RF Ministry of Foreign Affairs M. Ulyanov in an interview with the media stated about “the Kremlin's readiness for both, diplomatic and military response in case of Europe's actions unfavorable for Russia”. At this, he did not rule out the possibility of “aggravation of the situation in European countries, which will need Moscow's appropriate response” (i.e., within the framework of preparation of the “West-2017” SCPE, there was a hint about the possibility of a repetition of the “Ukrainian scenario” in the Baltic States) .


III. Ukraine, International Organizations and Leading Western Countries

3.1. International Organizations

The European Union. Along with Russia, a significant problem for the EU is the sharpening of the “migration” crisis in Europe due to the intensification of the armed conflicts in the Middle East and North Africa. February 9, 2017, this issue was discussed at the special meeting of the European Commission. The leadership of the European Commission criticised some EU countries for refusing to accept refugees, which leads to their excessive accumulation in Italy and Greece. To avoid further complication of the situation, it was decided to fine the EU member states that do not adhere to certain quota for the resettlement of migrants.

NATO. The question of strengthening the security in Europe from the South is becoming increasingly important also at the NATO level. February 6, 2017, Ministers of Defence of France, Italy, Portugal and Spain called on the Alliance's leadership to strengthen NATO's military presence in their region — in the Western Mediterranean. The need for this was justified by the growth of threats to the Alliance from the sources of extremism from the conflict zones in the Middle East and North Africa.

In turn, February 10, 2017, President of Lithuania D. Grybauskaite addressed the United States and NATO with the request to take additional measures to protect the Baltic countries due to the Russian Federation's increased military activity on the Western strategic direction. In this regard, concern was expressed about the actions of the Russian Federation on preparation of the “West-2017” SCPE, during which there will be a large-scale deployment of Russian troops near the borders of Lithuania, Latvia and Estonia, as well as mastering the scenario of war with NATO.

These trends have a direct impact on Ukraine's interests. Thus, on the one hand, they contribute to the growth of NATO's importance in collective security in Europe, including Ukraine, and on the other — they distract the Alliance's attention and resources from our State.


3.2. Leading Western Countries

The USA. The new US administration confirms Washington's consistent position to fulfill its obligations to NATO and member countries of the Alliance.

February 6, 2017, D. Trump in a telephone conversation with NATO Secretary General J. Stoltenberg expressed strong support for the Alliance. The parties agreed on the importance of steady implementation by all member countries of NATO of their obligations regarding the financing of defense sector at the level of 2 % of their GDP. They also discuss ways of resolving the situation in the East of Ukraine.

On the same day, during their meeting in Washington, the Ministers of Defence of the United States and Canada agreed on deepening cooperation between the two countries in the sphere of defence of North America, including within the framework of the North American Aerospace Defense Command (NORAD).

In regard to fulfilling his election campaign promises, on 8 February, 2017, US President D. Trump announced his intention to significantly increase the funding of the US Armed Forces. According to him, the need is due to the “historical role of the US Armed Forces, which are at the center of the struggle against international terrorism”.

At the same time, more and more complicated is becoming the situation around D. Trump's decree to restrict immigration into the country. The decree was challenged in the courts and currently is subject to quite sharp legal disputes between the US administration and its opponents. This again confirms the inability of the US President to make unipersonal important state decisions, due to the peculiarities of the United States political system.

The same applies to the issue of US sanctions against Russia. In this regard, illustrative were the US media reports about the “validity confirmation by the US intelligence agencies some of the compromising materials about D. Trump's ties with the Russian Federation”.

Germany. February 12, 2017, the Federal Assembly of Germany elected a new President of the country, the former Foreign Minister of Germany F. Steinmeier (representative of the Social Democratic Party, part of the coalition with the CDU/CSU led by A. Merkel).

In his keynote address, F. Steinmeier announced his intention to conduct a constructive dialogue with the United States and Russia. However, he acknowledged how difficult negotiations with the new leadership of the United States of America and the Russian Federation can be.

Taking into consideration F. Steinmeier's positions in his previous post, we should expect continuation of his policy of compromises with Russia, including on the Ukrainian issue. However, the representative character of the presidential office in Germany actually deprives him of the possibility of real influence on the country's foreign policy.

At the same time, according to German experts, F. Steinmeier can play a positive role in the protection of democratic values and in struggle against the growing populism in Germany and in the whole of the European Union.


IV. Other Important Trends and Developments that Will Have an Impact on Ukraine's National Interests

Russia. According to Russian experts, in case of the USA and the EU's continuing sanctions against Russia, as well as maintaining the current level of world oil prices, the Russian Reserve Fund will be completely exhausted in the first half of this year. So, the government will be forced to turn to the National Welfare Fund (NWF).

As of the beginning of February 2017, the NWF had accumulated up to 72.5 billion US dollars — almost as much as there was in the Reserve Fund (72.9 billion US dollars ) in August 2015. Thus, the NWF assets will allow to cover the state budget deficit and the cost of support for the Russian economy for not longer than one year.

In a year, Russia will be forced to sharply increase foreign and domestic borrowing, and to move to more drastic budget cuts. Thus, the Russian Federation would be in deep fiscal crisis, which will be the most severe since the time of the Soviet Union's collapse.

This problem becomes especially critical for Russia, given the approach of presidential elections in the country in 2018.

The USA-Russia. Given this kind of trends in the Russian economy, a very negative for Russia is the USA's efforts to increase production and export of energy carriers, which adds to keeping oil prices relatively low. In particular, in this respect, very important were D. Trump's decisions to lift the restrictions on oil production in the United States, and to construct the pipelines from Alaska to American refineries. Besides, according to Vice-President of the United States Mike Pence, it is planned to increase the volume of supply of the US liquefied natural gas to Europe.

A significant obstacle to the normalization of US-Russian relations is the preservation of a number of other fundamental differences between the US and Russia, which became even sharper after the election of D. Trump the United States' President. First of all, it concerns the United States' stronger line against Iran — Russia's main partner in the Middle East.

Thus, at the end of January, the United States stepped up sanctions against Iran due to its missile program. Besides, on 5 February, 2017, US President D. Trump accused Iran of financial support of international terrorism. With this in mind, the White House Press Secretary S. Spicer announced about the USA's intention to “firmly respond to all Iran's threatening violations, as Washington sees fit”.

These USA's actions have already caused backlash and condemnation from Russia. In particular, on February 6, 2017, Minister of Foreign Affairs of the Russian Federation S. Lavrov chided the United States for “Washington's biased approach to Iran”, as well as for “groundless accusations against it”. Besides, Russia proposed to bring Iran to the international coalition to combat Islamic extremism that is unacceptable to Washington.

Moldova. In the face of the increasing confrontation between pro-Russian and pro-Western forces in the country, the President of the Republic of Moldova I. Dodon continues to promote the idea of the Moldovan state's ”multi-vector” policy. Thus, on February 7, 2017, I. Dodon initiated the trilateral negotiations between the Republic of Moldova, Russia and the European Union on the resumption of strategic partnership between the Republic of Moldova and the Russian Federation while maintaining the Agreement on Association of Moldova with the European Union.

A similar “ambivalent” attitude was demonstrated by I. Dodon during his meeting with NATO Deputy Secretary General R. Gottemoeller on 7 February 2017 in Brussels. The President of Moldova expressed interest in continuing cooperation with the Alliance in the implementation of some joint programs. At the same time, he spoke against the opening of the NATO office in Chisinau explaining this by “the threat of complications of the settlement of the Trans-Dniester conflict”.

Thus I. Dodon actually confirmed the agreement with the Russian plan to resolve the Trans-Dniester conflict on the basis of federalization of Moldova. He spoke about “the possibility of returning the Trans-Dniester into the Moldovan state, in case of providing a special status to the breakaway republic”.

Turkmenistan. According to the results of the presidential elections in the country (February 12, 2017) the acting leader Gurbanguly Berdymukhamedov was elected President of Turkmenistan for the third term. Despite the presence of eight candidates, the elections were actually uncontested. G. Berdymukhamedov was expectedly elected by more than 97 % of voters.

Taking into consideration G. Berdymukhamedov's previous policy, Turkmenistan will continue the neutral course of mutually beneficial cooperation with other countries. In 2016, on G. Berdymukhamedov's initiative, amendments were introduced into the Constitution, which cancelled the 70-year age limit for presidential candidates and increased the presidential term to seven years. That is, G. Berdymukhamedov will remain in his post until 2023.

Romania. The large-scale protests in the country forced the Romanian government to cancel its decision on mitigation of the anti-corruption legislation. However, this did not stop the protest activity in the country, which continues under the slogan of the resignation of the government and parliament. At this, despite the rejection by the Parliament of Romania of the opposition's demands for a vote of non-confidence in the government of the country, the country has in fact a government crisis. February 9, 2017, Minister of Justice of Romania F. Yordake resigned from his post.


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 short term, crucial for Ukraine will be the USA's and EU's decisions in March 2017 on sanctions against Russia, imposed in 2014 due to the annexation of the Crimea by V. Putin's regime. The continuation of these sanctions would mean the immutability of the West's policy on the Russian and Ukrainian directions at least for the next six months. Given the prospects of a budget crisis and the financial and economic collapse in the Russian Federation due to the depletion of its reserves, it could force the Putin regime to a certain (tactical) compromise with Ukraine (which is unlikely because of his attitude to the sovereignty and statehood Ukraine), or lead to Russia's large-scale aggression against Ukraine (if the sanctions policy of the West continues and V. Putin personally is cornered in the dead end).

Besides, an additional factor influencing Moscow's positions will be the UN International Court of Justice in the Hague considering Ukraine's claim against Russia because of the annexation of the Crimea and occupation of the Donbas. It is with these aspects that a number of expert associate the recent massive “cleansing” of the most odious (including most informed on Moscow's secrets) leaders of the separatists and mercenaries.

Russia will also continue to insist on a settlement of the conflict in the Donbas exactly according to the so-called “Steinmeier's formula” that would let Moscow to implement its interests in relation to Ukraine. First of all, this concerns preservation of the Russian military presence on Ukrainian territory and its influence in the “DPR” and “LPR”.

In turn, the USA and the EU's refusal to continue sanctions against Russia would in fact “untie the hands” of Moscow for actions on the Ukrainian direction. In this situation, Russia would intensify its pressure on Ukraine (including by agreement with the leading Western countries) in order to make Ukraine fulfill Russia's terms of the “settlement” of the conflict in the Donbas. The basis of these terms would be the same “Steinmeier's formula”, but without any compromise with Ukraine.


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

Next week, one of the main factors influencing the development of the situation in the conflict zone in the Donbas will be events connected with the preparation and conduct of a possible meeting between the Foreign Ministers of the countries-participants of the “Norman Four”.

Given the peculiarities of the current situation around Russia, Moscow during the meeting can go to a certain decrease in the intensity of the armed conflict on the front line, in order to demonstrate the Putin regime's “peace-loving” intentions. In turn, it will be presented as a prerequisite for lifting the sanctions against Russia.

At the same time, we should not exclude the possibility of Moscow's organizing various kinds of provocations to discredit Ukraine in the eyes of the West. Based on previous practice, the most likely forms of provocations may be shelling residential areas of cities and settlements in the occupied territories, and terrorist attacks on the territory of Ukraine.

At this, another meeting of the “Normandy Four” at the level of Foreign Ministers will be used by Russia exclusively to justify its actions and promotion of Russian interests, and to accuse Ukraine. Any decisions will not mean Moscow's real willingness to resolve the conflict. Russia will only delay the time in anticipation of the change of position of the USA and the EU.


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

Despite a number of challenges in addressing mitigation of the visa regime between the EU and Ukraine, this process gradually advances. Thus, the next important step on this path should be a tripartite meeting of representatives of the European Parliament, the European Commission and the European Council on 28 February. In the words of EU Ambassador to Ukraine H. Mingarelli, a fundamental decision on the abolition of EU visas for Ukrainian citizens has actually been adopted and just needs the implementation of mandatory technical procedures.