Wealthy Nations Daily Update - Ukraine

The latest round of the “Normandy Four” talks took place in Paris between the Foreign Ministers of the Ukraine, Russia, Germany and France on March 4.  Jean-Marc Ayrault, the French Minister of French Foreign Affairs, made a statement at the end of the meeting noting that the Minsk agreements are a “roadmap…to achieve an effective result”, and the key areas discussed at the meeting were the ceasefire, the practicalities of holding elections and making them safe.  The statement read, “We emphasized the importance of the Ukrainian Parliament and government drawing up and adopting an electoral law, to enable local elections to be held, and we expressed the wish for those local elections to be held before the end of the first half of 2016, according to the sequence adopted by the heads of state and government in Paris on 2 October“.

Sergey Lavrov, the Russian Foreign Minister, although describing the meeting as “productive” highlighted the key area of contention, “During our talks today we pointed out that a direct dialogue between Kiev and Donbass on military aspects, security or the political process is the key to and the backbone of the Minsk process. Unfortunately, this dialogue has not been launched primarily due to Kiev’s unwillingness. Another attempt has been made today to reject the fact that the Minsk Agreements have been also signed by Donbass representatives. It has been suggested that these representatives should be considered illegitimate and that the special status issues should be addressed when some other representatives are nominated.”

The Ukraine is clearly reluctant to devolve power and award a special status to the Donbass area yet Russia will not cede control of the border with the Ukraine until this has been done.  But with France and Germany clearly advocating the implementation of the Minsk II agreement as the solution, Ukraine must sooner or later realise there is little in the way of alternatives.

Moreover, the Ukrainian economy is in a dire position not helped by the breakdown in its economic relationship with Russia.  Compounding this, the IMF has raised concerns about the Ukraine’s compliance with the bailout agreement and progress on reforms after the resignation of the Minister of Economic Development and Trade who cited corruption as a problem.  The whole situation has been made worse by infighting amongst the ruling coalition.  The submission of a new memorandum to allow the disbursement of the new tranche of IMF funding has been pushed back as a result.  But the Ukraine will also have to face up to the reform program to secure further IMF funding.