UkraineAlert

As Kyiv Slashes Spending, the Economy’s Real Shrinkage This Year May Be 10, Not 6, Percent

The International Monetary Fund last month threw what looks like a much-improved financial lifeline to Ukraine—and indeed, the new loan program is welcome help for a desperate need. But a check on the math of one prominent IMF realist suggests that the cost of the overall aid package could be a Ukrainian economic shrinkage this year of an extremely painful 10 percent—much more than the IMF predicts publicly.

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Vladimir Putin

Putin’s War is Not Over Donbas, but a New Russian Empire

According to Vladimir Putin, Crimea and Ukraine are where the spiritual sources of Russia’s nationhood lie. And he “always saw the Russians and Ukrainians as a single people. I still think this way now.”

People observing the crisis triggered by Putin’s aggression against Ukraine therefore ought to understand what these words mean. Quite simply they mean that for Putin—and for much of Russia as well, even without the constant incitement of Kremlin propaganda—there is no such thing as a separate Ukrainian people, national identity, culture, or history. Seen through this Russian lens, the concept of a Ukrainian state independent of Russia is at best a legend or fantasy. At worst it incarnates a threat to the very existence of the Russian state. And obviously Moscow will meet that threat with violence.

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Russian-backed separatists are planning a fresh offensive in eastern Ukraine that could come within a matter of months, retired Gen. Wesley Clark, a former NATO Supreme Allied Commander, warned March 30.

“What is happening now is preparations for a renewed offensive from the east,” and this could take place following Orthodox Easter, on April 12, and “most probably” before VE Day on May 8, Clark said, citing multiple local sources he spoke with on a recent fact-finding mission to Ukraine.

“That’s what all the talking is about right now, preparing the cover for the next attack,” he said.

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On March 19, delegates at the European Union Summit in Brussels agreed to extend tough sanctions against Moscow—until year’s end if necessary—to get Russian President Vladimir Putin to implement the Minsk II ceasefire. Under terms of that deal, signed on February 12, EU sanctions won’t be lifted until Ukraine takes back full control of its border. And that’s a problem for Putin.

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Viewed historically, the ongoing Russo-Ukrainian war is the product of four deeper causes and one trigger. First, the Soviet empire’s collapse in 1991 propelled its successor state, Russia, to seek reimperialization for structural and ideological reasons. Second, the emergence of a “fascistoid” (or almost fully fascist) regime made imperial revival a central feature of Vladimir Putin’s hyper-masculine strategy of self-legitimation. Third, European Union and NATO expansion placed Ukraine in an untenable security vacuum, between a Europe manifestly uninterested in Ukraine and an imperial Russia that was increasingly making claims on Ukrainian sovereignty. Fourth, the “colored revolutions” in Georgia, Ukraine, and Kyrgyzstan in 2003-05 directly threatened Putin's imperial regime and legitimacy—compelling him to wage war against Georgia and launch a variety of protective measures vis-à-vis Ukraine and Kyrgyzstan.

Finally, Ukraine’s 2014 Maidan Revolution was the trigger that led Putin to exploit that country’s post-revolutionary weakness by invading Crimea and eastern Ukraine in the hope of promoting Russia’s empire and consolidating his regime.

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Dnipropetrovsk’s Kolomoyskyi: Patriotic, Corrupt, Threatening—Or All Three?

Ukrainian billionaire politician Ihor Kolomoyskyi resigned today as governor of Ukraine’s strategically critical Dnipropetrovsk province after clashing with the central government and parliament over control of two state-owned oil-sector companies. In that clash, Kolomoyskyi last week sent troops of an armed militia he controls to occupy the Kyiv headquarters of Ukrtransnafta, the country’s main pipeline operator.

Kolomoyskyi has been both an asset and a risk for Ukraine’s government, spending his money and political capital to make his province a firm bulwark against the Russian-sponsored insurgency in neighboring Donetsk. But his power, which includes a bloc of deputies in parliament, extends far beyond his province and in some respects has rivaled that of the central government. Civic and pro-democracy activists have said he is a prominent source of political corruption.

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Europeans do not want to undermine Minsk II, says analyst

European Union leaders meeting in Brussels on March 19 are unlikely to either ramp up or lift sanctions on Russia over its actions in Ukraine, says Edward W. Walker, a professor of political science at the University of California at Berkeley.

“It’s very likely that the EU will decide on the 19th to kick the can down the road,” Walker said in an interview with the New Atlanticist.

It does not want to undermine whatever chance the Minsk II agreement has of being implemented,” he added, referring to the ceasefire agreement between Ukraine and pro-Russian rebels.

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Last week, UkraineAlert linked to an interesting piece by Clifford Gaddy criticizing the West’s sanctions on Russia for its aggression in Ukraine. His point is this: Putin believes that Russia is “under assault” by the West and cannot allow Ukraine “to be brought fully into the sphere of influence of its enemy.” Therefore, the West cannot “force a change in Putin’s calculus” by sanctions. Putin will pursue his objectives in Ukraine by any means possible despite sanctions. For the West to “win” in Ukraine, Gaddy says, “Russia must collapse completely.”  

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A Criminal Case Could Turn the City’s Political Strongman Back into a Kremlin Ally

 
In Russia’s campaign to re-assert control over Ukraine, a logical target for its “hybrid war” is Kharkiv, Ukraine’s second-largest city and a center of its Russian-speaking population. And indeed, Russia has been working steadily to destabilize Kharkiv (just 25 miles from Russia’s border) as it has done the cities of Lugansk and Donetsk, further south.

Russian-backed separatists have organized public demonstrations in favor of a pro-Russian “Kharkiv People’s Republic,” and dozens of bombs have exploded in the past year, often targeting groups working for Ukraine’s continued independence from Russia. The bombings have accelerated, with seven “terrorist attacks” in the city this year, according to Ukrainian authorities. Ukraine says it has arrested members of a group called the Kharkiv Partisans that officials say is backed by Russia’s Federal Security Service (or FSB, formerly the KGB secret police agency).

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Kyiv Has Begun the Hard Steps of Reform; IMF and Allies Must Now Deliver Quickly


The dramatic plunge last month in the value of the hryvnia, Ukraine’s currency, sparked speculation about an immediate, national economic collapse. Despite the drama—the hryvnia lost more than half of its value against the dollar in February, hitting a record low of 33.75 before regaining (to 23 to the dollar)—a close look at Ukraine’s financial numbers shows that panic is unfounded.

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