Monday, December 22, 2008

What’s up, Ukraine? 15-21 December 2008.

Falling currency . On Thursday, 18 December the Ukrainian hryvnia dropped to its historical low against the US dollar – 10-10.5.
Less than a half of the year ago US dollar cost around 4.8 hryvnias. The Prime Minister of Ukraine Yulia Tymoshenko declared that the hryvnia’s value felt down due to “a special speculative operations planned at the currency market of Ukraine, and organized with the assistance of the National Bank (Central bank) and some other banks of Ukraine”, in particular, Nadra bank.
“The bank that was just bought for 600 million dollars, received from the National Bank financial resources of 7 billion 100 million hryvnias”, Yulia Tymoshenko said, adding that “the bribes made up from 3% to 7% of the total amount of financing”. Yulia Tymoshenko pointed out that Ukrainian businessman Dmytro Firtash (owner of the Group DF holding, which is famous also for a scandal around the financial support of the British Conservatives) and the Presidential Secretariat are standing behind the Nadra bank. “They need to tumble the hryvnia’s value to dollar”.

Getting closer. The U.S. Secretary of State Condoleezza Rice and Ukrainian Foreign Minister Volodymyr Ohryzko signed the U.S. – Ukraine Charter on Strategic Partnership.
The joint U.S. – Ukrainian declaration called a “Charter on Strategic Partnership”, signed in Washington on 19 December, appeals for the expanding of the economic and security ties between two countries, and strengthening of the cooperation in energy, trade and other areas.The document does not have a legally binding status.
The declaration states that the United States intends to open a diplomatic post in the Autonomy Republic of Crimea, a region that is highly influenced by Russia (there are many ethnic Russians and Russian-speaking people with Russian passports), and is hosting Russia's Black Sea fleet in Sevastopol (under a lease agreement until 2017). ”Ukraine welcomes the United States' intention to establish an American diplomatic presence (American presence post) in Simferopol, the capital of Crimea”, said the joint declaration.
State Department spokesman Sean McCormack has already said the Crimean diplomatic post would be a small one, dedicated to the organising of cultural events and doing political reporting. Mr. McCormack denied any intentions to provoke Russia by establishment of this post. ”This is about U.S.-Ukraine bilateral relations. If the Russian government chooses to be upset by ... my stating that we're considering opening up… a one-person or two-person American presence post, well, there's not much I can do about that,” he added. Russian officials haven’t made any statements on this point, but analysts are saying that this answer may be given in more sharp position of Moscow in gas-trade dialogue with Ukraine. Minister Ohryzko told reporters the post “probably will be done next year”.
Also Washington promised to help to strengthen the candidacy of Ukraine for NATO membership, which is another painful question for the official Russia. Nevertheless, U.S. would work within the NATO-Ukraine Commission to agree on a plan for training and equipping Ukrainian armed forces. “We plan to undertake a program of enhanced security cooperation intended to increase Ukrainian capabilities and to strengthen Ukraine's candidacy for NATO membership,” the document said.
Washington also promised to help Ukraine with “rehabilitating and modernizing the capacity of Ukraine's gas transit infrastructure”, cooling down Russian dreams to fort a consortium for the exploiting of Ukrainian gas lines.

Fitch Ratings: The credit outlook for the Ukrainian energy and utility sector during 2009 is negative.
The report issued on Thursday 18 December lists the main problems of the Ukrainian energy and utility sector: a funding crisis in the state-controlled power generation sector, downward pressure on regulated tariffs due to a severe recession, restricted access to bank lending and debt capital markets, and continued turmoil at NJSC Naftogaz of Ukraine (‘B’/Rating Watch Negative). Fitch expects an economic recession in Ukraine in 2009 to drive down power demand, providing only temporary respite to falling capacity reserve margins.
Fitch expects liquidity and refinancing risk to remain high for the Ukrainian energy and utility sector through most of 2009, as foreign banks and markets remain effectively closed to Ukrainian issuers. Naftogaz will continue to confront major challenges in 2009, including a lack of transparency, potentially insufficient state subsidisation for its loss-making residential business, higher import prices, accumulating gas payables and restricted access to external financing. However, Fitch continues to view Naftogaz as an important strategic asset for the Ukrainian government (Ukraine rated at ‘B+’/Outlook Negative) and factors state support into the company’s rating.
The 2009 credit outlook, entitled "Ukrainian Energy and Utilities – 2009 Outlook”, is available on the agency's public website

Eternal problem. Russia blocks Ukrainian famine-genocide resolution at the United Nations.
Russia blocked Ukraine-initiated UN resolution claiming Holodomor in the Soviet Union in early 1930s was famine-genocide aimed against Ukrainians, rather than a common tragedy of many nations in the country. “We succeeded to bloc the inclusion of the item into the agenda of the current UN General Assembly,” Russian Ambassador to the United Nations Vitaly Churkin said on Thursday, 18 December, according to the Russian media.
The Ambassador also added the United States and Great Britain backed the Ukrainian motion, which “ended in nothing.” Mr. Churkin said Russian representatives were active in explaining the history of Holodomor to foreign partners. As a result, nine EU countries did not sign the Ukrainian declaration, although “EU members usually act in a consolidated manner”.

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