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KYIV -- Ukrainian central bank chief Valeria Hontareva has resigned amid political pressure.

Hontareva, a reformist who won praise from the West, told reporters Kyiv that she submitted a letter of resignation to President Petro Poroshenko on April 10.

"I think my mission is accomplished as the reforms have been implemented," Hontareva said.

She added that her successor will face the same political pressure that she faced, and that the National Bank of Ukraine (NBU) should be independent from politics.

Hontareva's efforts to clean up Ukraine's financial sector irked tycoons who critics say have treated the country's banks like their private coffers.

She also came under fire from some ordinary Ukrainians who blamed her for losses they suffered after she was appointed to follow the International Monetary Fund's advice to partially abandon state support for the hryvnya currency.

The hrynvya has fallen from 12 to the dollar on the day of her appointment in June 2014 to 27 on April 10, diminishing people's savings and stoking inflation hat reached almost 50 percent in 2014.

But Hontareva's decisions helped the central bank stay afloat and helped bolster ties with the IMF and other lenders.

On April 3, The IMF approved a $1 billion tranche of its $17.5 billion bailout program, in what Proshenko said was "recognition of Ukrainian reforms."

The IMF had postponed the disbursement of the tranche after Kyiv imposed a trade embargo on eastern parts of the country that are controlled by Russia-backed separatists.

Originally posted here:
Ukraine's Reformist Central Bank Chief Resigns Amid Pressure - RadioFreeEurope/RadioLiberty

Ukraine's State Space Agency is currently in accession discussions with the European Space Agency (ESA) to become its member, Chairman Yuriy Radchenko told Sputnik on the margins of the Space Symposium in Colorado Springs.

Last Tuesday, Radchenko said during the symposium that Ukraine was actively cooperating with the ESA with a goal to become a member of the agency.

When asked whether Ukraine is holding discussions on the accession with the ESA, Radchenko said, "Yes."

"Today, we held talks with the Head of the European Space Agency on this matter," he explained. "The strategy and the tactics on the matter have been worked out. It is required to fulfill a number of conditions to become a member of the European Space Agency."

He said the membership could be secured within "a reasonable" timeframe.

"We continue to wish to become a member of the European Space Agency, and I think that this program will be implemented by Ukraine within a reasonable period of time, because there are some conditions there," Radchenko added.

Radchenko did not specify what the accession conditions are.

The annual 33rd Space Symposium brings together representatives of the world's space agencies, commercial space businesses as well as military, national security and intelligence organizations to discuss and plan the future of space exploration.

Moreover, Ukraine's State Space Agency is discussing various projects with the NASA, the agency's Chairman Yuriy Radchenko told Sputnik in Colorado Springs.

"We have a number of projects that we are discussing with the Americans," Radchenko said. "We are working, we are in the working process. Therefore, today [NASA] is our very serious partner in space exploration and space activities."

Radchenko is currently in the United States where he participated in the 33rd annual Space Symposium. Earlier at the symposium he said that Ukraine was considering missions related to lunar exploration.

The event brings together representatives of the world's space agencies, commercial space businesses as well as military, national security and intelligence organizations to discuss and plan the future of space exploration.

Source: Sputnik News

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Ukraine in talks with ESA to become member - Space Daily

This article first appeared on the Atlantic Council site.

While the world is distracted by multiple crises, Ukraines ruling elites are trying to undo the modest progress the country has achieved since the Maidan Revolution.

Despite the mainstream narrative, when it comes to reforms in post-revolutionary Ukraine, the record has been anything but black and white.

But if you need a consensus on the most outstanding achievements, most Ukraine watchers would probably agree on four: the establishment of market prices on gas; a globally hailed e-procurement system; the creation of the National Anti-Corruption Bureau of Ukraine; and the launch of an electronic declaration system that discloses the assets of public officials.

The last two are now at the epicenter of the biggest attempt to rollback reforms since the Maidan Revolution.

Ukraine has fallen out of focus in the last year. Local rent-seeking elites havent wasted the opportunity and have started rolling back reforms that impede the profitable coexistence of big business and politicians.

The former head of Ukraine's tax and customs service, Roman Nasirov, under investigation for embezzlement, attends a court hearing in Kiev, Ukraine, March 6, 2017. Maxim Eristavi writes that the democratic freedoms won in the Maidan protests are being steadily eroded by crooked politicians, elites and oligarchs. Valentyn Ogirenko/reuters

Ukrainian oligarchs, whose positions were damaged by the popular uprising of 2014, still managed to retain control over many key state institutions.

The real picture started to emerge last year with the governments almost full purge of reformers. Around mid-2016, almost all key reforms in the country had come to a halt. But things quickly escalated this spring.

In March 2017, the newly created National Anti-Corruption Bureau indicted Roman Nasirov, the head of the State Fiscal Service of Ukraine. Nasirovs arrest is the biggest anticorruption case in history and a huge embarrassment for the General Prosecutors Office. Prosecutor General Yuri Lutsenko had been promising to launch big anti-corruption cases but never did.

Related: How Putin Uses Fake News to Wage War on Ukraine

The retaliation was swift: the presidents parliamentary majority, in a bipartisan effort with key oligarchic groups and opposition politicians tied to former President Viktor Yanukovych, sped up the nomination of the auditor for the National Anti-Corruption Bureau (NABU). The auditor must determine whether the current management of the two-year-old institution was successful enough in fighting corruption.

Anticorruption activists see this move as a disguised tactic to sack Artem Sytnyk, the 37-year-old head of NABU, and install someone less eager to prosecute graft. Auditor candidates from civil society were brushed off and a virtually unknown protg from the ruling party was pushed forward through procedural violations.

Only an uproar among key reformist MPs, foreign allies and Ukrainian civil society stopped the candidacy. But another vote is soon to follow.

The next step was to curtail civil society, which plays a crucial watchdog role. It was cunningly combined with an attempt to water down the key reform of electronic declarations. Packaged in manipulatively formulated legislation, the same bipartisan group exempted junior officers, sergeants and rank-and-file combatants who fought in eastern Ukrainian from the e-declaration requirements. One can easily see how bureaucratic maneuvering can add virtually any official to this group.

This vote happened with procedural violations, too. The same amendment forces Ukrainian nongovernment organizations and their sub-contractors as well as journalists who write about corruption to declare their assets the same way officials do.

Like Russias foreign agent laws, the move puts severe operational restrictions on Ukraines vibrant civil society. By adopting the amendments, the authorities have openly declared war on civil society for the first time since the Maidan Revolution, Mykhailo Zhernakov, an expert at the Reanimation Package of Reforms, wrote, and hes right.

Related: The Ukraine Payments That Link Manafort to Putin

With Ukraine awash in a record amount of foreign aid and grants in recent years, theres no doubt that enhanced transparency for NGOs is a must. At the same time, the new law exploits the drive for transparency in an effort to weaken the anticorruption movement.

As someone who works extensively with NGOs in Ukraine, I find the environment in Kiev one of the harshest in Eastern Europe. Already facing a human resources deficit, such a substantial increase in the operational obligations the new law requires will push plenty of civil society initiatives over the edge.

Corrupt elites have marshaled enormous wealth in Ukraine in the last twenty-five years of their unchecked rule. For example, during pre-trial hearings, Nasirov had nine lawyers arguing on his behalf. NABU had just two detectives making their case. So, forcing the same transparency requirements on the anticorruption movement as the corrupt officials they are supposed to expose will make for a tragically unfair game.

Poroshenko signed the controversial amendment on March 27 amid growing calls from civil society and foreign allies to veto it. In a rare move, even the EU Commissioner for Neighborhood Policy criticized the law. Some of my anonymous high-profile sources in Brussels told me that it has the potential to endanger the implementation of Ukraines pending visa-free regime.

Buoyed by the passage of this amendment, Ukraines ruling elites will keep at it. A lack of international attention and ineffective diplomatic strategies on the part of Ukraines allies will embolden the counterrevolution forces. Things could quickly get out of control, with the rise of populism and the blockade in eastern Ukraine threatening the countrys recently restarted growth and the IMFs $17.5 billion program.

It is time for Ukraine's friends and donors to call the bluff of the countrys ruling elites by making clear that recent counterrevolutionary moves must be rolled back and Ukraines political leadership will face serious consequences in terms of political and economic support for any future ones. Trivial statements and tweets wont work this time; old-school political pressure is needed.

One of the main lessons of the Maidan Revolution for Ukrainian allies has been that local civil society is the best partner in delivering progressive change in Ukraine. Now is the time to reaffirm strong vocal support for it. And making sure that Ukraines ruling elites know the exact price for attacking reforms.

Maxim Eristavi is a nonresident research fellow with the Atlantic Council and co-founder of Hromadske International, an independent news outlet, based in Kiev.

Here is the original post:
Ukraine's Corrupt Elites Make a Mockery of Western Support - Newsweek

Ukraines DTEK Trading, owned by Rinat Akhmetov, and Moldovas state-owned intermediary, Energocom, signed a one-year contract, on April 1, for the supply of electricity to Moldovan distributors. Energocom/DTEKs only competitor was the Kuchurgan Power Station, which is located in Transnistria and belongs to the Russian state-owned electricity giant, Inter RAO. According to Moldovas Ministry of Economy, the winning bid offered to sell power at $50.20 per megawatt/hour (MWh), compared to Kuchurgans offer of $54.40 per MWh (MEC.gov.md, April 1). However, questions remain as to why DTEK had to go through the Moldovan intermediary and did not submit a bid directly. Moreover, there are concerns about DTEKs capacity to cover Moldovas energy needs in full (Exprt-Grup.org, March 31). The arrest of the deputy minister of economy in charge of the energy portfolio on the day of the auction deadline added further intrigue, despite, so far, corruption charges not being connected to the bidding process. Speculation mounted as the auction deadline was extended repeatedly without a clear justification. Nonetheless, the fact that Moldova switched from the Russian supplier in Transnistria to a Ukrainian company is significant in ways that go far beyond market economics.

The decision took many by surprise, as the key figure in Moldovan politicsthe head of the ruling Democratic Party, oligarch Vlad Plahotniuchad a vested interest in maintaining the old contract despite accusations that importing energy from Transnistria not only legitimates, but also, in effect, sponsors separatism. Moldovan independent experts, as well as politicians, accused Plahotniuc of benefiting from the shell-company that had served as a middleman between Moldova and Kuchurgan Power Station since January 2015 (Adevarul.ro, April 1). The Tiraspol-based offshore-owned intermediary Energokapital (second-largest taxpayer in Transnistria) is considered the brainchild of Transnistrias former leader Yevghenii Shevchyk and Moldovan leaders Vlad Filat and Plahotniuc (Ecfr.eu, July 7, 2016; Jurnal.md, July 24, 2016). Maintaining the existing deal was Plahotniucs preferred option following Filats arrest; but the status quo did not sit well with either Ukraine or Moldovas Western partners. Related:Oil Heads Higher As Iran And Saudi Arabia Draw On Reserves

Having lost control over its large coal mines in the east (see EDM, February 28, March 29), Ukraine is eager to compensate as much as it can by exporting power generated by its nuclear power stations. DTEK Trading bought the export rights from Energoatoma Ukrainian state enterprise that operates the countrys four nuclear power stations. Coincidentally or not, the day before the deadline of Moldovas energy import auction, the Washington Times featured a piece titled Ukrainian Corruption Casts Nuclear Pall Over Europe, stoking fears about Ukraines alleged inability to ensure the safe operation of its nuclear facilities (Washington Times, March 30). The article leans in favor of Russia. Of course, Ukraine had long sought to replace Russia on the Moldovan energy market, but to date, Chisinau had only used this as leverage with Moscow and Tiraspol. Moreover, the lucrative kickbacks from Energokapital (about $19 million a year) were likely difficult to pass up (Jurnal.md, July 24, 2016). Yet, several factors had been making it increasingly difficult for the Moldovan government to continue with business as usual. For one, Transnistria does not pay Russia back for the Russian natural gas it consumes to produce electricity, passing the debt onto Moldova. Second, the Russian aggression in Ukraine had alarmed the small country with a separatist region. And, last, but certainly not least, the election of a pro-Russian president has compelled Moldovas government to forgo business as usual in order to mollify pro-Western Moldovans and the countrys development partners.

It remains unclear why Kuchurgan decided to submit a price higher than the $49 per MWh they had been charging last year. Given that the intermediary Energokapital was no longer in the picture, the price should have been lower still. Yet, the bigger question now is what Transnistria does with its energy surplus. In 20052009, when Moldova had a contract with Ukraine and not Inter RAO, Transnistria was able to sell part of the electricity generated by the Kuchurgan Power Station to Romania. Currently, Romania is unlikely to help Tiraspol out and neither is Ukraine. Losing such a significant revenue stream puts incredible pressure on an already austere Transnistrian budget. Spending cuts in Russia will also make it difficult for Moscow to pick up the tab (see EDM, June 29, 2015). Therefore, Moldovas decision has even larger geopolitical implications. Related:Did The Banks Just Give U.S. Shale A Carte Blanche?

Due to increased domestic contestation by the opposition, Plahotniuc has been trying desperately to boost his legitimacy by proving himself to the West, yet without antagonizing Russia directly. The Moldovan leadership has gone to great lengths to avoid linking the Russian government to the actions of its intelligence services. This is despite accusations of Russian special services harassing Moldovan officials traveling to Russia, their sabotage of a Moldovan law enforcement investigations into a major transnational money laundering scheme, and the recruitment of a former Moldovan Democratic Party legislator as a spy for Moscow (Adevarul.ro, March 9). But following the election of a pro-Russian president in Moldova, Moscow is now focused on ensuring that pro-Russian forces secure a majority in Moldovas next parliamentary elections, scheduled for 2018. Consequently, Russia has diminished its space for maneuver. It cannot retaliate against Moldova without undermining the chances of the pro-Russian parties in the next election. Vladimir Putin recently made President Igor Dodon several token concessions regarding Moldovan exports and labor migrants. Dodon is also creating expectations about progress in the Transnistrian conflict settlement (see EDM, January 26). If the Kremlin were to retaliate on any of these fronts, it would undermine its own political projects in Moldova.

The politically agile Plahotniuc may have hoped to persuade the European Union that cutting Transnistria out of the energy deal would be detrimental to the conflict settlement process, but Plahotniuc has lost the battle, even while saving face for now. Clearly, the deal is a major win for Ukraine. Apart from the much-needed cash inflow and a snub at Russia, Ukraine is also hoping to access the EU energy market via Moldova. The new contract may ultimately prove to be a big win for Moldova if DTEK is able to ensure supply and price stability, since Plahotniuc is likely to use any hitches as a pretext to go back to his preferred option. In light of the difficult economic conditions in Transnistria and Russias increasingly limited leverage over Moldova, there is some hope that pressure for a positive development in the conflict settlement may emerge at the grass roots level to the point when it can no longer be ignored or stifled by the authorities.

By The Jamestown Foundation

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Original post:
Moldova Picks Ukraine Over Russia In New Energy Deal - OilPrice.com

This article first appeared on the Atlantic Council site.

Russias occupation of Crimea has reached its third anniversary, and there is no evidence in sight that President Vladimir Putin will withdraw his occupation forces.

Both the United States and Canada have reiterated their support for continued sanctions against Russia as long as Crimea continues to be occupied. Still, ending Russias illegal occupation could take decades.

To increase the effectiveness of Western pressure on Russia, three additional policies are necessary.

First, Ukraine must stop expecting the West to assume the heavy lifting of sanctions against Russia while Ukraine itself continues to trade with Crimea and the two Russian proxy enclaves, the so-called Donetsk and Luhansk Peoples Republics (DNR and LNR).

Ukrainian leaders have no moral leg to stand on when they call on Washington, D.C., and Brussels to continue the sanctions regime while Ukraine benefits from trade with Crimea and the DNR and LNR.

In fact, Ukraines policy of supporting Western sanctions while reaping profits from trade with the occupied regions was dashed only by Ukrainian and Crimean Tatar activists, not by government policies.

A boy aims a sniper rifle during an exhibition of weaponry and military equipment in the Black Sea port of Sevastopol, Crimea, on November 26, 2016. Taras Kuzio writes that Putins biggest export to the West is not oil and gas, but corruption. In the West, political consultants, lobbyists, lawyers, tax advisers, private schools and journalists have all been corrupted by their acceptance of dirty money. Pavel Rebrov/reuters

It is time for the United States to demand that Ukrainian leaders get real about sanctions. Activist-initiated blockades only serve to increase tensions and political instability, and could threaten Ukraine with a third Maidannone of which are in the U.S.s interests.

Second, Western diplomats and policymakers should advise members of Russias opposition that they cannot be expected to be viewed as democrats if they continue to support Putins illegal annexation of Crimea, or back Putins claim that Ukrainians are not a separate people from Russians.

Western democracy-promoting foundations that receive funding from the U.S. government such as the National Endowment for Democracy should threaten to withdraw their support for those members of Russias opposition who endorse Russias chauvinist and imperialist actions.

Related: How Putin uses fake news to wage war on Ukraine

Until now, the majority of Russias opposition groups have supported Putins land grab in Crimea. A Russian democrat ceases to be a democrat when he talks about Ukraine, former Ukrainian President Leonid Kuchma presciently wrote in his book, Ukraine Is Not Russia.

Indeed, of Russias fractured opposition, only Boris Nemtsovwho was assassinated in February 2015and the very marginal Yabloko party have not held chauvinistic views of Ukrainians and opposed Putins occupation of Crimea.

Alexei Navalny, who was behind the massive March 26 protestsRussias biggest in five yearsis typical of Russias opposition; members tend to be more nationalistic than democratic. Like Putin, Navalny believes that Ukrainians are not a separate people; he supports the integration of Russia and Ukraine, and opposes sending weapons to Ukraine.

Related: Putin's supervillain adventures have cost him dear

Third, the EU needs to get its act together.

Until now, the EU has supported sanctions with one hand while simultaneously serving as a "global laundromat" and accepting billions of dollars of dirty money from Russia with the other. A new report by the Organized Crime and Corruption Reporting Project found that Putins Russia laundered $20 billion to $80 billion between January 2011 and October 2014.

According to Anders Aslund, an expert on Russian economic policy, Russia and Ukraine have exported over $700 billion and $100 billion, respectively, to the EU and offshore tax havens since 1991.

Accepting dirty money from Russia encourages corruption by providing outlets for stolen funds. These can be used for subversion, information warfare, corrupting European politicians, undermining trust in banks and purchasing real estate.

In truth, Putins biggest export to the West is not oil and gas, but corruption. In the West, political consultants, lobbyists, lawyers, tax advisers, private schools and journalists have all been corrupted by their acceptance of such funds.

Accepting dirty money deepens the cynical belief among Russian leaders that everybody has a price: it is just a question of negotiation. This, in turn, undermines the Wests moral stance on the benefits of good governance and the rationale behind the EUs sanctions policy.

U.S. policymakers should advise Ukrainian leaders, Russias opposition and the EU to end their contradictory policies, which have permitted Russia to erode and evade the sanctions regime.

Taras Kuzio is a senior fellow at the Canadian Institute of Ukrainian Studies at the University of Albertaand a nonresident fellow at the Center for Transatlantic Relations at Johns Hopkins-SAIS. His book, Putins War Against Ukraine: Revolution, Nationalism, and Crime,was published in March.

Read the rest here:
How Ukraine and the West Could Push Putin Out of Crimea - Newsweek