Monday 7 April 2014

Ukraine update - 04/07/2014

Pro-Russian protesters seize govt buildings in Ukraine's Donetsk, Lugansk and Kharkov
Thousands of people waving Russian flags flooded the streets of eastern Ukraine on Sunday. Demonstrators in the cities of Donetsk, Lugansk, and Kharkov seized state offices, while in Donetsk they also demanded an independence referendum.




RT,
7 April, 2014

Over 2,000 people gathered in Lenin Square in the center of Donetsk to petition for the Berkut officers, who – they believe – are falsely accused of using fire arms against the rioters during the Maidan standoff.


The participants in the event called on the “illegal junta in Kiev” to end political repressions and persecution of dissidents, the Itar-Tass news agency reports.


They demanded their right for self-determination to be respected, pushing for a Crimea-style referendum on independence from Ukraine.


The protesters carried Russian national flags, chanted “Russia! Russia!” and displayed banners urging the new Donetsk Region governor, Sergey Taruta, who was recently appointed by Kiev, “to get out.”





An effigy of a Nazi zealot was also burnt in the square, with the action labeled “an act of annihilation of fascism” by the protesters in view of neo-Nazi radicals playing a key role in the Ukrainian coup this February.


The people then moved out towards the regional administration’s headquarters, carrying a giant Russian flag.


The confrontation with the police broke out on the porch of the government building, with the pro-Russian protesters depriving a dozen officers of their riot shields.

Pro-Russian supporters deploy a Russian flag and the flag of the so-called Donetsk Republica as they storm the regional administration building in the eastern Ukrainian city of Donetsk on April 6, 2014 (AFP Photo / Alexandr Khudoteply)Pro-Russian supporters deploy a Russian flag and the flag of the so-called Donetsk Republica as they storm the regional administration building in the eastern Ukrainian city of Donetsk on April 6, 2014 (AFP Photo / Alexandr Khudoteply)


The demonstrators used the confiscated shields to make their way through the main entrance of the building and occupied the balcony. The Ukrainian flag in front of the administration was replaced by a Russian standard.


Eventually, police blocked the demonstrators inside.


The violence in Donetsk might’ve been provoked by a banner saying “Goodbye, Russia,” which was placed on the administration, Life-News reports.


The administration headquarters were empty, with only guards inside, as Government officials don’t work on Sundays.


The situation is pretty tense. The demonstrators are occupying the city council building and are demanding that an independence referendum is held to determine the future of the region of Donetsk,” activist Aleksandr Borodin told RT.


"The protesters are calling on officials to conduct a special session over the referendum situation. If it doesn’t take place, the demonstrators say they will organize an initiative group to settle the issue. The protesters say they will not acknowledge the Kiev-appointed authorities and are also demanding freedom for the recently elected so-called "public governor.”


Lugansk

The events evolved in a similar way in Lugansk where around a thousand people rallied in front of the local Ukrainian Security Service (SBU) office.


They demanded the release of protest leader, Aleksandr Kharitonov, who has been in detention since mid-march, as well as 15 pro-Russian activists detained on Saturday.


The people carried Russian flags and chanted “Shame on the SBU!” and “Freedom to political prisoners.”


Pro-Russian activistshold a rally in front of Ukraine's regional security service of Ukraine in Lugansk on April 6, 2014 (AFP Photo / Igor Golovinov)Pro-Russian activistshold a rally in front of Ukraine's regional security service of Ukraine in Lugansk on April 6, 2014 (AFP Photo / Igor Golovinov)


Up to eight people were injured as demonstrators stormed the Ukrainian Security Service (SBU) office, Ukraine’s Channel 5 reported. According to the Russian Spring website, a policeman was injured and hospitalized.


The governor of Lugansk region and the local Ukrainian Security Service (SBU) chief went out to talk to the demonstrators, which resulted in six of the detained anti-Maidan activists being released from custody.


Kharkov

Violence also broke out in the city of Kharkov where pro-Russian protesters clashed with alleged activists from the far-right Right Sector movement.


Fireworks were used as weapons during the scuffle, with several explosions heard. However, there were no reports of injuries as the police managed to quickly separate the sides.


Following the incident, the Maidan activists had to crawl inside the corridor, erected by police for their protection, as the crowd threw foreign objects at them.





Following the rally, around 1,500 pro-Russian activists have made their way to Kharkov’s regional administration headquarters, UNIAN news agency reports.


Despite the administration being guarded by police in riot gear, a group of protesters have managed to penetrate the building.


The storm began after the organizers of the protests urged participants “to support Donetsk and Lugansk where government buildings were seized earlier in the day.”


According to anti-Maidan activists, around 10,000 people participated in the protest in Kharkov on Sunday.


Pro-Russian rallies are taking place almost every weekend in major cities in the Russian-speaking part of Ukraine since the nationalist coup ousted Ukrainian president, Viktor Yanukovich, in late February.


One of the first laws the new government revoked was the regional status of the Russian language, which sent a clear message to the people in the country’s east.


The Republic of Crimea refused to recognize the change of power in Kiev and declared its independence from Ukraine, following the March-16 referendum, in which 96.77 percent of the voters chose to rejoin Russia.


Derek Monroe from Foreign Policy in Focus described the situation in Ukraine as politically chaotic.


There are a lot of political plays taking place in Kiev itself, specifically when it comes to positioning certain groups within the government itself,” Monroe said.


He added that the oligarchs that were places as governors in eastern Ukraine are not very popular with the people. “They have little following in popularity among the people, so the issue is simply to maintain some type of degree of nominal control, where in fact there is very limited control whatsoever.”


The situation is very fluid, so it is very hard to say where the government itself has particular strong control in the region or not. All the evidence looks like they don’t have much control unfortunately.”


Monroe described the Maidan movement as an “absolute disaster.” He argued that it was the provisional government which was selected, not elected, that made the schisms within Ukrainian society very visible.


This resulted not only in the loss for Ukraine, but loss of credibility among the people of the East,” he stated.


5 unanswered questions surrounding Kiev killings


Riot police are to blame for the deadly sniper fire during February's riots in Kiev - at least that's how Ukraine's coup-appointed leaders see it. They announced their investigation results, after first clearing themselves of accusations of wrongdoing brought by the former authorities. Let's recap those glaring holes in Kiev's argument in this blame-game.







Fears of gas war as Ukraine refuses to pay increased prices set by Russian firm
Dispute comes as tensions in eastern Ukraine remain high, with pro-Russian protesters storming government buildings



6 April, 2014

The prospect of a new gas war between Russia and Ukraine drew closer at the weekend as the government in Kiev said it would refuse to pay for gas at a new, inflated price set by Gazprom last week. The dispute comes as tensions in eastern Ukraine remain high, with pro-Russian protesters in two cities storming government buildings on Sunday.


In Kiev, interim prime minister Arseniy Yatsenyuk told the cabinet over the weekend that the new price for gas was unfair and Ukraine would not pay it.


"Russia has not managed to grab Ukraine through military aggression, so now they are pursuing a plan to pressure and grab Ukraine through gas and economic aggression," said Yatsenyuk. He said that Ukraine would continue buying gas at the "acceptable market price" of $268 (£162) per 1,000 cubic metres.


Last week, Russia announced two successive price hikes in gas for Ukraine, taking it up to $485.50. It is unclear what Russia will do if Ukraine refuses to pay the new price, but in the past it has shut off the supply. Last week, Gazprom's CEO, Alexei Miller, gave televised comments explaining why Russia was raising the gas price, noting that part of the discount had come when Russia extended credit to Ukraine last December as part of a package that was given to the former president, Viktor Yanukovych, for turning his back on an association agreement with the European Union.


"The discount was given on the condition that Ukraine would pay all its gas debts and pay 100% for the current deliveries, and it was clearly indicated that if this did not happen, the discount would be annulled in the second quarter of 2014," said Miller. He said that Gazprom had "not received a single dollar" in payment for March deliveries, and thus the discount had automatically been annulled.


Miller also said that Ukraine had received huge savings on gas based on its agreement to prolong the so-called Kharkov agreements, by which Russia retained the right to base its Black Sea fleet in Crimea.


The agreement, signed in 2010, extended the lease from 2017 to 2042, but now that Crimea has been annexed by Russia, the agreements have been annulled by Vladimir Putin. Miller said that the cheaper gas price was an "advance discount" for future rent which was now irrelevant, meaning that Ukraine had accrued a debt of more than $11bn on cheaper gas, which ought to be paid back. Ukraine says it owes Russia $2.2bn and plans to pay the debt.


Gas prices have long been a thorny issue between Russia and Ukraine, with Europe accusing Russia of using energy supplies as a political weapon. Russia has cut off gas to Ukraine twice before, in 2006 and 2009. In the first stand-off Gazprom accused Ukraine of siphoning off transit gas meant for the EU to serve its domestic needs, while in 2009 gas was cut off completely, leaving some EU markets without gas in the depth of winter.


The prospect of a new gas cut-off will send jitters through markets, although the potential consequences for the rest of Europe are less severe now. "Since 2009 new alternative routes have been built for Russian gas transfers to the EU, bypassing Ukraine, which now transfers roughly 50% of the Russian gas compared to 85% in 2000 and 95% in the mid-1990s," said Lilit Gevorgyan, senior economist at IHS Global Insight. "Moreover, due to the mild winter, the EU has enough stored gas to weather any disruption."


Additionally, the peak season for gas consumption has already passed, meaning Europe does not face the threat of facing cold weather without adequate gas supplies. Gazprom is also keen not to do too much damage to its image as a reliable supplier, whatever the Kremlin's goals may be.


"Still, should there be a gas cut off to Ukraine, the commodity markets are expected to react negatively," says Gevorgyan.


Since the annexation of Crimea, there have been fears of Russian moves on east Ukraine, with a concentration of troops on the border and repeated official statements about defending the rights of Russian speakers in the regions.


On Sunday, pro-Russian crowds in Lugansk, Donetsk and Kharkiv surrounded and stormed government buildings, waving Russian flags. Some want more autonomy from Kiev, while others support a Crimea-style annexation. Kiev says the unrest is being whipped up by Moscow, and the vast majority of those living in the regions would not welcome a Russian incursion.


Diplomatic relations between Russia and Ukraine remain strained, with each country in effect accusing the other of state-sponsored terrorism. Ukraine's interim government, without presenting much evidence, said Russian special forces had been involved in the shooting that left more than 100 people dead in Kiev in February.


Russia, meanwhile, said a group of Ukrainians supported by the country's security services had been detained for planning terrorist attacks.





Ukraine Loses State Buildings In Key Eastern Cities To Protesters; Blames Putin


7 April, 2014

Earlier this morning we reported that "Pro-Russia Protesters Seize Government Building In East Ukraine, Demand Autonomy." We suggested that this was only the first city in eastern Ukraine that would see this kind of internal revolt. Sure enough, hours later, the largest city in East Ukraine and one located in close proximity to Russia, Kharkiv, also saw its state building fall to what appear to be pro-Russia protesters, making it the third major city after Donetsk and nearby Luhansk. This coordinated and largely unexpected pro-Russian action triggering accusations from the pro-European government in Kiev that President Vladimir Putin was orchestrating "separatist disorder."


From Reuters:


Ukraine's Interior Minister Arsen Avakov accused Russian President Vladimir Putin of being behind the seizure of state buildings by pro-Russia protesters in eastern Ukraine on Sunday and promised that police would restore order peacefully.

He also accused Ukraine's ousted president Viktor Yanukovich of conspiring with Putin to fuel tensions in the region.

Earlier, pro-Russian protesters demanding a referendum on whether to join Russia seized a regional government building in the city of Donetsk and the offices of security services in nearby Luhansk.

"Putin and Yanukovich ordered and paid for the latest wave of separatist disorder in the east of the country. The people who have gathered are not many but they are very aggressive," Avakov said in a statement on his Facebook page.

"The situation will come back under control without bloodshed. That is the order to law enforcement officers, it's true. But the truth is that no one will peacefully tolerate the lawlessness of provocateurs," he said.

As expected, Kiev is scrambling to restore the semblance that it is under control, which as we noted earlier, it isn't:


Acting President Oleksander Turchinov called an emergency meeting of security chiefs in Kiev and took personal control of the situation, the parliamentary press service said.

The problem for Kiev is that suddenly the scramble for a referendum is reminiscent of what happened in Crimea. And everyone knows how that ended. Which means the acting government has to promptly halt the momentum toward sovereign independence or else East Ukraine is about to become a separate country, if not the latest annexation success for Russia.


Around 1,500 people protested in Donetsk on Sunday before breaking into the regional administration building, where they hung a Russian flag from a second-floor balcony, a Reuters witness said. Protesters outside cheered and chanted "Russia! Russia!".

In the Luhansk protest, Ukrainian television said three people had been injured. Police could not confirm the report. Talking to the crowd over a loudspeaker, protest leaders in Donetsk said they wanted regional lawmakers to convene an emergency meeting to discuss a vote on joining Russia like the one in Ukraine's Crimea region that led to its annexation.

"Deputies of the regional council should convene before midnight and take the decision to carry out a referendum," one of the protest leaders said, without identifying himself.

A local Internet portal streamed footage from the seized building, showing people entering and exiting freely. Soviet-era music was being played over loudspeakers outside. The building houses the offices of Serhiy Taruta, a steel baron recently appointed by the interim government in Kiev as governor of a region with close economic and historical ties to Russia.

"Around 1,000 people took part (in the storming of the building), mostly young people with their faces covered," said Ihor Dyomin, a spokesman for Donetsk local police. "Around 100 people are now inside the building and are barricading the building," he added.


Поступила информация что обл. взята под контроль протестующими













Ukraine PM Warns Russia's "Economic Aggression" is Unacceptable

6 April, 2014

"Russia was unable to seize Ukraine by means of military aggression," Ukraine's PM Yatsenyuk blasted, 


"Now they are implementing plans to seize Ukraine through economic aggression." His comments come after Russia's Gazprom raised prices for gas 81% from $268.50 to $485.50 (on the basis that the previous discount was a subsidy for allowing the use of the Black Sea port of Sevastopol, which Russia now has annexed) to which Yatsenyuk chided "political pressure is unacceptable, and we are not accepting the price of $500." Mr. Yatsenyuk, as WSJ reports, said his government will not pay the new price and will raise the issue in the Stockholm Arbitrage court, which was selected by the two countries years ago to settle the gas disputes - but warned his people that the country should prepare for Russia switching off natural-gas supplies.

As The Wall Street Jorunal reports, Ukraine's prime minister warned Saturday that the country should prepare for Russia switching off natural-gas supplies, as the energy monopoly Gazprom said it will raise the price for gas for Ukraine by 81%.







Speaking at a cabinet meeting, Arseniy Yatsenyuk, said Moscow's price increase was a form of "economic aggression," adding that Kiev will not recognize the new price and is ready to challenge it in the international arbitrage court.
 
Russia's natural gas monopoly Gazprom's Chief Executive Alexei Miller said Saturday in a televised interview the company has raised the cost of gas to Ukraine to $485.50 from $268.50 for 1,000 cubic meters from April 1.
 
Moscow says the price change is due to Kiev's failure to pay its bills.
Mr. Yatsenyuk responded aggressively:







"Political pressure is unacceptable, and we are not accepting the price of $500," Mr. Yatsenyuk told ministers.
 
"Russia was unable to seize Ukraine by means of military aggression," Mr. Yatsenyuk said. "Now they are implementing plans to seize Ukraine through economic aggression." he added.
 
He said Ukraine " will not touch" any of the gas destined for Europe if Russia limits supply for Ukraine. Mr. Yatsenyuk said Ukraine will continue to try to negotiate the new gas deal with Russia.


Gazprom's additional argument for raising the price (aside from credit-risk-adjusting for the billions already owed) is somewhat remarkable...







Mr. Miller said Ukraine owes Gazprom $2.2 billion for March deliveries, and another $11.4 billion the country saved as part of a discount agreement that Moscow recently scrapped.
 
Mr. Miller the discount was a prepayment for the Russian Navy's use of Ukraine's Black Sea port of Sevastopol through 2017, but as that port had been annexed by Moscow, along with the rest of Crimea, Ukraine should repay $11.4 billion it saved, Mr. Miller said, following similar statements by Russian Prime Minister Dmitry Medvedev.


In other words, because we annexed territory for which we had previously given you a discount for, you now need to pay us full price.







Mr. Yatsenyuk said his government will not pay the new price and will raise the issue in the Stockholm Arbitrage court, which was selected by the two countries years ago to settle the gas disputes.


With the US and IMF lining up to give "aid" to Ukraine, we wonder how all those taxpayers will feel when the hard-earned money gets greatly rotated from Ukraine's balance sheet straight to Gazprom's... or how the 'newly liberated' people of non-Crimean Ukraine will feel about their leaders when the country goes dark and cold...


And if Yatsenyuk thinks he can wait it out... starving Gazprom of potential revenue (that they are not even paying anyway) think again...As Reuters reports,







Gazprom Neft has not been affected by Western sanctions over Russia's annexation of Crimea but is ready to move away from dollars in its contracts and to redirect oil flows to Asia if needed, the CEO of Gazprom's oil arm said.
..
"As for sanctions, they have not affected the company's business in any way," Dyukov said in St. Petersburg, where Gazprom Neft is now based.
He suggested that Western companies did not want broader sanctions imposed on Russia, but that Gazprom Neft would reduce its reliance on the U.S. dollar if necessary and turn to Asia if doorways to the West were shut.
...
 
"No such task has been set (by the government)," he said. "But ... we have discussed with our buyers the possibility of switching contracts to euros and ... 95 percent said they are ready."
 
"This shows that in principle there is nothing impossible - you can switch from dollars to euros and from euros, in principle, to roubles," he told reporters in remarks authorised for publication on Monday.
 
"Of course, I have had meetings, contacts with representatives of Western business circles ... In principle, they are not interested in escalation of tensions," Dyukov said.

So once again, actions by the West that were supposed to show strength will 'boomerang' back and do more to weaken the appearance of any global might that may remain.


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