• The Oligarch Wars (Part 1): Firtash’s “Confessions of an Oligarch”: Oligarch Dmitro Firtash breathed a big sigh of relief on April 30th when a Vienna court declined to extradite him to the United States to face charges of bribery. While the case against Firtash was not remotely as serious as other cases which could be opened against him, it did not prevent Firtash from confessing on the witness stand and putting his spin on the events of Euromaidan. The oligarch’s legal team wove a tale of woe alleging that the US was punishing the oligarch for his support of Vitaliy Klitchko for President last year as well as his ownership of large quantities of titanium, a metal critical to the aerospace industry. They noted that an initial extradition request for Firtash was sent prior to October 2013 as a way to influence Yanukovych through the oligarch. Firtash claimed credit for securing a compromise between Yanukovych and the opposition leaders (including Klitchko) in February 2014 when ensured a return to the 2004 Constitution limiting the powers of the presidency. Upon achieving this result, Firtash noted that Yanukovych called him in Paris and accused the oligarch of “stabbing him in the back”. As proof of the old adage that the best way to kick someone in the face is when they are already on the ground, Firtash called Yanukovych a “coward” and added, “He should not have run away”.
Firtash’s court date brought detailed mentions of Kyiv Mayor Vitaliy Klitchko and Opposition Bloc MP and former Yanukovych Chief of Staff Serhiy Livochkin. Firtash took credit for backing Klitchko’s UDAR Party in the 2012 Parliamentary elections in which the party finished third and received 14% nationwide. Firtash added that he originally planned to back Klitchko for President in 2015 but later helped to orchestrate a compromise between the heavyweight champion and Petro Poroshenko. This deal allowed Poroshenko to become President, Klitchko to become Kyiv Mayor and most importantly, to prevent his arch nemesis Yuliya Tymoshenko from returning to power. “The main thing is that we got what we wanted” said Firtash. Tymoshenko has been a fierce critic of Firtash since his involvement in RosUkerEnergo, a gas intermediary between Ukraine and Russia. Firtash slammed Tymoshenko as someone who “only seeks power, from which Ukraine sustains losses. The first major loss will be the natural gas market. The second time we lost Crimea”. He went on to assert, “There will be an inquiry into how Prime Minister Yatsenyuk and Acting President Turchynov gave Crimea away”. Both Yatsenyuk and Turchynov were allies of Tymoshenko last March during the annexation of Crimea. Klitchko agreed to be interrogated behind closed doors about his relationship to Firtash. The interrogation took place privately because “confidential information relating to the economic and political situation in Ukraine may be divulged during the interrogation” according to Firtash’s legal team. Nine days after the court hearing, Klitchko publicly stated, “I have never signed agreements with oligarchs. Firtash has never funded me and my political force. I do not have any obligations to anyone, except Kyiv residents who elected me as their mayor and entrusted me with the management of the capital”. The Kyiv Mayor went on to add, “I am not going to play someone’s dirty games aimed at discrediting the Ukrainian authorities, and Kyiv authorities in particular, and the destabilization of the situation in the capital and in the country”. Former Yanukovych Chief of Staff and current Opposition Bloc MP Serhiy Livochkin was the other surprise in the Vienna courtroom. Livochkin confirmed Firtash’s account of a meeting with Poroshenko, Klitchko, the oligarch and himself in Vienna on March 24, 2014. “Firtash believed that the unification of democratic candidates Klitchko and Poroshenko brought Tymoshenko’s chances to naught” said the opposition MP. Livochkin refused to disclose details of the meetings and his role in it. However he said that Firtash supported the withdrawal of Klitchko’s candidacy from the presidential race because Poroshenko “had a higher level of public support”. Following the Vienna court decision, US prosecutors announced plans to appeal the decision so the case will continue. In the meantime though, Firtash is now free to travel outside Austria for the first time since last March when he was arrested. His record bail of $125 million Euros remains in force though.
While Firtash’s fortunes in Vienna improved with Livochkin’s testimony, the Ukrainian government opened a new front against the two individuals via Firtash’s Ostchem which is one of the world’s largest fertilizer producing companies. The day before Firtash’s court hearing, Prime Minister Yatsenyuk announced a police probe into the activities of Ostchem which he claims cost the state losses of 5.7 billion hryvnas. Interior Minister Arsen Avakov stated, “A number of big names and high-profile crimes have resurfaced in this situation…these include Kaskiv, there are also questions to Livochkin and several other MPs”. Upon the request of the Interior Ministry and Prosecutor General’s Office, the Kyiv Pecherskiy Court agreed to freeze 500 million cubic meters of gas belonging to Ostchem within the framework of the probe on April 30. Vlad Kaskiv was the Head of the State Investment Agency under Yanukovych. Previously he was elected a Member of Parliament with Our Ukraine in 2007. However Kaskiv is best remembered for being one of the key organizers of the 2004 PORA movement which participated in the Orange Revolution. His connection to Firtash and Livochkin in the Ostchem case bode poorly for his once promising political career.Oligarch Wars (Part 2); Akhmetov’s Lumps of Coal: While Dmitro Firtash was tied up in Austria, Rinat Akhmetov continued his wrestling match with the government. Last month’s coal miner protests in Kyiv were brought to an eventual end following the initiation of an SBU investigation into the funding of the protestors. SBU Chief Valentin Nalyvychenko announced “we have detained the couriers who brought money from Moscow from the office of the former Prime Minister (Azarov)”. President Poroshenko piled on by stating, “The policy of de-monopolization and de-oligarchization is fully consistent with the national security interests…no matter whoever and whatever is trying to blackmail Ukraine and me as President –by the so-called miners’ battalions, two-thirds of whom were ‘titushki’…” Akhmetov struck back at the government on May 12 via his Metinvest holding company by claiming the government owed their entities VAT refunds of a combined 3.6 billion hryvnas (about $170 million US dollars).
The Ukrainian government however maintains the upper hand against Akhmetov for now on three key fronts: 1) Energy Minister Demchyshyn called on the Anti-Monopoly Committee to determine if Akhmetov’s DTEK corporation is an energy monopoly since it supplies around two-thirds of the country’s coal. If the AMC makes such a ruling it could give the government the opportunity to force a breakup of DTEK into smaller parts with different ownership structures. With Parliament approving 39 year old lawyer Yuri Terentyev on Tuesday, expect the new Chairman to look into the matter promptly. ; 2) Yesterday Naftogaz Ukraine announced it was ready to take gas from DTEK to cover the debts of Kyivenergo which supplies electricity for the capital. Kyivenergo currently owes Naftogaz the amount of 3.4 billion hryvnas which is roughly equal to the amount Akhmetov’s Metinvest is claiming is owed to them by the government in VAT refunds. Thus, even if Metinvest gets their full VAT refunds, Akhmetov will essentially be taking money with his left hand to pay it to the government with his right hand; 3) To avoid the appearance of financing the Russian backed forces in the Donbass, Akhmetov’s Systems Capital Management (SCM) made a decision to suspend operations of its 54 Brusnychka supermarkets and Parallel-branded. Officially SCM cited “difficulties with supplies in the past several months” but the suspension appears to be a reaction to a bill introduced in Parliament last month to nationalize the Brusnychka supermarket chain. Government MP’s who sponsored the legislation alleged that “via the logistics of these chains, the lion’s share of smuggling goes between the self-proclaimed Luhansk and Donetsk people’s republics, annexed Crimea and the rest of Ukraine”. Thus, Akhmetov made a wise decision to abandon a smaller part of his financial empire in order to maintain the larger part. Now the only question is will he be able to keep the larger part?• Ukraine Calls the Bondholders Bluff: Jack London, the author of the novel “Call of the Wild”, once said, “Life is not always a matter of holding good cards, but sometimes, playing a poor hand well”. That quote certainly applies to Ukraine and Finance Minister Natalie Jaresko in the negotiations with bondholders over the country’s debt restructuring. Ukraine was dealt the effects of war and recession which made it seem destined for a default months ago. However, Ukraine managed to beat the odds and negotiate a record $41 billion IMF bailout package. As part of the agreement though, the country has to reach agreement with creditors on restructuring of existing debts including a cut in interest rates, longer maturities and possible debt write-offs.
The negotiations have been scheduled to wrap up by the end of this month. However, a group of bondholders led by Templeton Funds is stalling the negotiations by refusing to accept any reduction of debts. The amount remaining to be renegotiated is approximately $8.9 billion, which includes $3 billion of debt to the Russians set to come due this December. State owned entities and Ukrainian banks have largely reached agreement with the government. While every investor wants guarantees that they will receive back their original investment, a fundamental principle of investing is risk and the possibility that some investments will not be returned in full. With the IMF stipulating that a principal reduction is necessary to receive the full assistance package, Ukraine has no choice but to insist that the bondholders accept a “haircut” on their investments. Ukraine has truly been dealt a poor hand of cards. Nonetheless, the Ukrainian government and Finance Ministry are refusing to fold even though a debt default is now a distinct possibility. In such a case, Ukraine would suspend its’ debt repayment to creditors which would mean that the group of bondholders would not be paid anyway. As evidence of Ukraine’s readiness for the “nuclear option”, Parliament passed a law (with 256 votes) on Tuesday placing a moratorium on government debt payments to foreign creditors. Essentially, Ukraine is calling the bondholder’s bluff on not agreeing to a “hair cut”.In addition to calling the bondholders’ bluff on no reductions in principal, the Finance Ministry has called out the bondholders for their lack of transparency since some investors (Western fund managers) are refusing to disclose their identities. With the Western world united behind Ukraine in its struggle against Russian aggression, no one wants to be known as the “pro-Russian” guy these days – let alone big institutional investors with corporate responsibilities. For that matter, the United States and European Union are strongly backing Ukraine as they have a larger vested interest in seeing the IMF bailout succeed. Thus, in this situation, Templeton Funds and the bondholders look like the greedy Sheriff of Nottingham compared to Ukraine’s Robin Hood who simply is trying to help the poor. Meanwhile the Americans play the role of Richard the Lion Hearted who intervenes to save the day. Former US Treasury Secretary Larry Summers donned his Richard the Lion Hearted costume yesterday when he referred to the Ukrainian government “as the most reform minded economic team since independence”. Ukraine’s arguments were furthered reinforced when Summers attacked the audacity of the bondholders by stating, “if you lend money at a high spread to a country that is then invaded, you should not expect the world’s taxpayers to ensure that you are paid back in full…” Summers added, “The IMF and national authorities should call out the recalcitrant creditors on their irresponsive behavior. If necessary, Ukraine should be prepared to go into default and not meet its obligations. While at the same time the international community should make it clear that it will continue to provide support to Kyiv. In the context of these steps, creditors will have little choice but to accept the economic reality of the situation”. Ukraine may have been dealt a poor hand of cards, but it sure is playing them well…
• Moldovan Banking Scandal, Local Elections & a New Coalition? The June 14 National Local Elections in Moldova will take place in an environment of public anger and disillusionment over a banking scandal in which around $1 billion dollars has been stolen. For a country with a GDP of a little more than $6 billion, that amounts to almost 16% of the economy. In comparative terms that would be the equivalent of the disappearance of $2.1 trillion dollars in the United States. Simply put, the banking scandal is catastrophic. Businessman Ilan Shor is being held under house arrest and prosecutors hope he will give answers regarding the enormous losses in three mostly state owned banks (Banca di Economi, Unibank and Banca Sociala). While the political class is pointing fingers at each other, 75% of Moldovans say that the Moldova is on the wrong track and 72% blame the politicians for the bank scandal. The US firm Kroll was hired by the Moldovan government to investigate and their initial estimate is that 13.3 billion lei (about $1 billion US dollars) was stolen last October and November through a series of fraudulent loans. The banking scandal led to a devaluation of the currency by a third over the New Year’s holidays.
A public opinion survey (by Public Opinion Barometer) put the blame on former Prime Minister Vlad Filat (40%) and oligarch Vlad Plahotniuc (36%). An organized demonstration on May 3 produced 40,000 protestors in the capital – which rivaled (if not exceeded) the April 2009 protests which led to the fall of Voronin’s Communist government and creation of the pro-European coalition. A likely second investigation is expected to lead to arrests and jail time for Ilan Shor and possibly Filat and/or Plahotniuc. While there are links in the scandal to Russia’s Vneshekonombank Group (who is the largest shareholder of Banca di Economii with 25% and other Russian shareholders hold a combined 61% of the company) and allegations that the Kremlin backed Socialists also had a hand in the scandal (MP Ihor Dodon was Minister of Economy when many of the bad loans were issued to the then-government owned bank), the average citizen is stuck with eventually paying off the loses. Many have speculated that if justice is not served in the form of jail time for the ringleaders, it will result in massive public protests which could topple the government. In other words, a Moldovan Maidan.
Meanwhile, the local elections on June 14 may act as the short term catalyst for a change in the Premier’s Office as well as a reformatting of the parliamentary majority. Most pundits agree that the Socialists will continue their momentum by cannibalizing the former Communist electorate to make big gains in the election. Russian businessman Renato Usatiy, who fled the country after being banned from participation in the parliamentary elections due to foreign financing, is the front runner to win the Office of Mayor of Baltsi, the second largest city. That alone would be a significant victory for the Socialists but they are also expected to make the runoff in Chisinau with their candidate, former Prime Minister Zinaida Grecanii. Grecanii is challenging two term incumbent Dorian Chirtoaca with the Liberal Party. In the first round, Chirtoaca must defend his electorate from former two term Chisinau Mayor Serafim Ureachean (Liberal Democrats), Oazu Nantoi (with Iure Leanca’s European People’s Party) and Communist “clone” candidate Vasilie Chirtoca. Chirtoaca then faces the challenge in the runoff of uniting the pro-European forces behind his candidacy. Given the current rift in the relationship between the his party and Liberal Democrats/Democrats coalition, the task will not be easy.
However, a Chirtoaca victory is likely to instigate a reformatting of the parliamentary majority since the Chisinau Mayor’s Office was one of the points of contention in the coalition talks earlier this year. A Chirtoaca victory would give the Liberals control of the mayor’s office for another four years as well as a stronger bargaining position. The likely collapse of the Communists (via Socialist cannibalization) combined with the Liberal Democrat’s decline in popularity due to Filat’s troubles will redistribute the balance of power. The Democrats, the other ruling coalition partner, have an agrarian base of rural voters and are expected to maintain their support in the local elections.
How does all this play out? For now the situational majority of Liberal Democrats, Democrats and Communists have 61 members officially but only 42 in reality (see the Table 1 to the right). Prime Minister Cirill Gabiruci is increasingly viewed as inadequate for the job even though he has served just three months. This view gained steamed in a private meeting with Ukrainian President Petro Poroshenko earlier this month who questioned whether the 39 year old was up to the task of running the country. The recent scandal that he might have purchased his high school diploma and not actually graduated only reinforces the perception that he is a temporary figure. Key staffers for the Premier admit privately that every day when they come to the office they expect it to be their last. Gabiruci, an in-law of Voronin, is technically the candidate from the Liberal Democrats but is seen as a compromise “placeholder” in the power struggle between Filat and Plahotniuc. With the expected demise of the Communist’s party base in the local elections, Vladimir Voronin (who turns 74 next week) is likely to begin his exit from the political stage. The Communist faction in Parliament could then splinter into three parts: Voronin’s close allies under the (nominal) Communist banner; a group of European Socialists (i.e. pro-Chisinau and not pro-Moscow) and those who will join the Kremlin backed Socialist Party. These factors combined with a Liberal victory in the Chisinau Mayor’s election would give the Liberals an opportunity to return to the coalition with bargaining power. Gabiruci would be dumped as Premier and Speaker Adrian Candu (Democrats) is the likely replacement. The Liberals would then receive certain government ministries (mostly at the expense of the Liberal Democrats). In this scenario following the June 14 elections, the parliamentary majority can potentially look like Table 2 on the right . In this scenario, the Socialists would remain the largest faction and in opposition, but the governing coalition would be coherent and not situational, commanding up to 60 votes.
Such a re-format of the Parliamentary majority would be welcomed by the frustrated Western diplomatic corps in Chisinau which are increasingly worried about Moldova losing its’ momentum following the approval of the EU Association Agreement last year. With the EU Deep and Comprehensive Free Trade Agreement (DCFTA) set to take effect on January 1, 2016, the Ukrainian government finally enforcing trade requirements supporting Chisinau on the border and the Kremlin cutoff of funds for Transnistria, Moldova has more leverage than ever before to resolve matters with the breakaway region. Already more than 75,000 citizens on the territory of Transnistria (7% of Transnistria’s population) have applied for Moldovan passports which gives them the privilege of visa-free travel to Europe. Thus, while “all politics is local” as former US Speaker Tip O’Neill said, in Moldova’s case, local politics may help lead to national solutions.• Uncle Sam Plays Santa Claus in the Fight against Corruption: On a visit to Washington on April 28, Kyiv Mayor Vitaliy Klitchko and Ambassador Alfonso Lenhardt the Acting Administrator of the United States Agency for International Development (USAID) announced a $1 million dollar program to fight corruption in the city. While almost everyone agrees that fighting corruption in Ukraine as important as overcoming the recession and ending the war, the news story had the classic taste of Uncle Sam throwing money at a problem rather than fixing the fundamental issue. Acting Administrator Lenhardt said that USAID “will help Kyiv create a single electronic system of city procurements, improve the city’s parking infrastructure, increase the transparency of waste disposal systems, and improve the legal relevant basis that will facilitate better environmental protection”. He added that USAID “will also develop mechanisms of public control, transparency and accountability in Kyiv Investment Agency, which should limit the opportunities for corruption.” Given the length of the laundry list of activities on a mere million dollar budget, it was surprising that Lenhardt did not promise to find a cure for cancer, feed all the starving children in Sub-Saharan Africa and convince ISIS to institute a gender equality policy. Every bit of assistance is helpful in some way, however any one of the items listed (parking infrastructure, waste disposal, environmental protection, etc.) could easily require a million dollars each in technical assistance. Kyiv’s city budget for this year is 22 billion hryvnas or approximately $1 billion US dollars. That means the $1 million dollar USAID anti-corruption program amounts to 0.001% of the annual budget. If USAID wants to seriously fight corruption in Kyiv, then a $1 million commitment is insufficient. The best way for USAID to seriously tackle corruption in Kyiv is to target assistance to specific sectors rather than tossing out a million to cover a multitude of problems. Given that up until 15 months ago, Members of Parliament could receive up to $10 million US dollars for switching factions and joining the ruling Party of Regions, a million dollars barely scratches the surface of the problem. In the end of course, the assistance is appreciated by the Kyiv City Administration, and ultimately USAID is trying to make a positive contribution to fighting corruption. However, future technical assistance to Ukraine should be centered on specific tasks and realistic expectations, rather than Uncle Sam trying to play Santa Claus. • Personnel Moves: Refat Chubarov, Chairman of the Crimean Tatar Medzhlis and Member of the Board of the Anti-Corruption Bureau accepted his mandate to return to Parliament. Chubarov will now serve for the fourth time as a Member of the Ukrainian Parliament. He was next on the Poroshenko Bloc list following the appointment of MP Stefan Barna as Ternopil Governor last month. There was some speculation that Chubarov might decline to accept the mandate given his role on the Anti-Corruption Bureau Board of Directors. However since a director has now been hired, his duties as a Board Member will be less. It should be noted that yesterday marked the 71st anniversary of the deportation of the Crimea Tatars from the peninsula. The occupying Russian authorities refused to allow the quarter million Crimean Tatar the right to hold public commemorations of the event. This is the first time since 1991 that such commemorations have been banned. Chubarov claims that since the annexation, more than 20,000 Crimea Tatars have left the peninsula for mainland Ukraine.
Zorian Shkyryak’s term as Minister of Emergency Situations ended almost no sooner than it began. Shkyryak was criticized for not being able to rapidly mobilize the evacuation of Ukrainians in Nepal following the devastating earthquake. Shkyryak was appointed the Acting Head of the Ministry on March 25 following the arrest of the previous Head, Serhiy Bochkovsky at a meeting of the Cabinet of Ministers. Bochkovsky was arrested on charges of creating schemes to buy fuel at exorbitant prices for personal gain. Shkyryak’s term lasted just 48 days before he was replaced on May 12. He was replaced by Mykola Chechotkin, the Deputy Head of the Ministry.
Ihor Bilous returns to government after a three month absence as the Chairman of the State Property Fund (SPF). Bilous resigned as the Head of the State Fiscal Service on February 24th after Yatsenyuk fired two of his deputies for “violating the oath of a public servant”. A concurrent investigation into Bilous’ involvement in the matter cleared him of the charges but Bilous quit in protest. As a result, Parliament gave Bilous 258 votes to confirm his appointment as SPF chief on Tuesday. However the honeymoon is expected to be short as Bilous will have his hands full given the government’s plans to raise 17 billion hryvnas (about $850 US Dollars) from privatizations this year in an effort to fill holes in the state budget. It should be noted that two of the most recent SPF Heads, Mykhailo Chechetov and Valentyna Semenyuk have committed suicide within the last year.
Sasha Borovik was in line to be appointed to the post of First Deputy Minister of Economy and Trade Development. However, last week Borovik announced that he had been denied the appointment. Borovik is a London based attorney who previously worked for the US based Microsoft Corporation and is one of dozens of foreigners who joined the new Ukrainian government to help the reform process. President Poroshenko granted Borovik Ukrainian citizenship on March 17th in order for him to work as an official adviser in the Ukrainian government. While no one denied Borovik’s skills, Premier Yatsenyuk is said to have taken a particular dislike for Borovik because he interrupted him in meetings. Other government officials found him difficult to work with and overly ambitious – citing his alleged printing of business cards with the title of “First Deputy Minister of Economy and Trade Development” before he actually received the appointment. Minister of Economy Aivaras Abromavicius – one of the first foreigners to take Ukrainian citizenship to serve in the new government – explained his decision not to hire Borovik, “There will be human errors. It is life. The situation with Borovik is proof of that. He didn’t fit in. We move on”. In an effort to salvage the situation, Borovik appeared on Shuster Live television program last Friday evening. Borovik said, “Because being too enthusiastic, I was not looking at formalities. I would like to stay, but I want to make it clear that I am a technocrat…and I will work the way I am…Young people, who come and want to change the system, are hurried up and forced to work in the old system. We want to say that the system is rotten, it is not efficient and we believe it should be altered. When we see we are not heard, then we become confrontational”. Abromavicius added that the reform process in Ukraine is bigger than any one person.
On Tuesday the Parliament approved Yuri Terentyev with 266 votes as the Head of the Anti-Monopoly Committee of Ukraine. Terenyev has no background in public service and for the last three years has headed the Legal Department for the Kryviy Rih steel giant Arcelor Mittal Steel. Ironically, the case of Kryviyrizhstahl (the former name of the steel company where Terentyev has worked most recently) is the most successful privatization tender in Ukraine’s history. The 2006 sale to the India based Mittal Steel netted the country $5 billion dollars in revenues – more than all previous privatization sales combined up until that time. The steel factory was re-privatized and sold to the highest bidder after Viktor Pinchuk and Rinat Akhmetov obtained in a collusive tender for just $800 million US dollars in the summer of 2004. The 39 year old previously worked for Metro Cash and Carry as well as Bristol Myers Squibb. He replaces career bureaucrat Mykola Barash who has served since last March.
Volodymyr Stelmakh, former National Bank of Ukraine Head (2000-2002 and 2004-2010) was appointed the Head of Supervisory Board of Privatbank. The appointment of a respected professional like Stelmakh to Head the Supervisory Board is a coup for Igor Kolomoyskyi who owns 37% of the bank. Privatbank is Ukraine’s largest bank with around $12 billion US Dollars in assets.
Finally, expect a new Governor of Odesa soon –maybe within days. Kolomoyskyi ally Igor Palytsya is on the way out and a new appointment is imminent. Palytsya’s departure is part of the ongoing de-oligarchization of the government. Palytsya served as the former Head of Naftogaz and when his appointment as Odesa Governor was official, Kolomoyskyi – and not President Poroshenko – appeared in town to make the announcement. Given Odesa’s strategic importance for Ukraine economically (via the port), militarily (as the navy is now stationed there), and with Russia’s interest in getting control of the region, the new Governor will have a tough job. The leading candidate is former three term Odesa Mayor Eduard Hurvits. However Hurvits turned 67 this year and it is unclear if the Ukrainian law that prevents Presidents and Premiers from serving after the age of 65 applies to Governors. Former Odesa Governor and Energy Minister Ivan Plachkov has also been mentioned for the job. Plachkov, an ethnic Bulgarian was born in the region and owns the “Kolonist” winery. However his ties to Rinat Akhmetov when he was the Head of Kyivenergo now appear to be a liability. MP Sergiy Kunitsyn, the twice former Prime Minister of Crimea and Governor of Sevastopol is also rumored to have an interest in the post despite not being from the region. The dark horse is Oleksiy Goncharenko, who is the estranged son of the former, disgraced Odesa Mayor Oleksiy Kostyushyev. Goncharenko, a 35 year old MP, headed Poroshenko’s presidential campaign a year ago which finished first in Odesa. The recent appointment of Stefan Barna as Ternopil Governor bodes well for Goncharenko although as one observer stated, ‘Odesa ain’t Ternopil and it will take a proven leader to keep control of the region”. A possible compromise candidate is former Odesa Deputy Mayor and two time MP Volodymyr Kurennoy. Kurennoy, age 47, is Hurvits chief political strategist since the late 90’s and lacks the baggage of his mentor. If Hurvits can’t overcome the age problem then Kurennoy could emerge as the strongman who brings Hurvits’ organization into use and tame this tumultuous region.
Dates to Watch (for Ukraine unless otherwise noted):
May 19-22: Parliamentary Voting Session Scheduled
May 21-22: EU Eastern Partnership Summit in Riga, Latvia. There is still no optimism for Ukraine to receive a visa-free travel regime to Europe. Had Yanukovych signed the EU Association Agreement at the Vilnius Summit in November 2013, Ukrainians would have visa free travel to Europe (just like Moldova has now) and Yanukovych might still be President…
By May 31: IMF Talks with Bondholders Completed
June 2-5: Parliamentary Voting Session Scheduled
June 14: Moldovan Local Elections
June 16-19: Parliamentary Voting Session Scheduled
July 1: Date Decentralization will be approved by Parliament according to Speaker Groisman
July 1-3: Parliamentary Voting Session Scheduled
July 14-17: Parliamentary Voting Session Scheduled
September 23: Ukraine must repay $500 Million in Debt: If no deal is reached with the bondholders in negotiations this month, Ukraine would be likely to default as early as September 23.
October 25, 2015: National Local Elections for Mayor and City Council
February 2016: Stockholm Arbitration Hearings on Counter Claims between Naftogaz and Gazprom. Naftogaz is seeking $16 billion dollars and a decision is expected by June 2016.