Election weekend in Moldova

November 26, 2014

This weekend sees elections in Moldova – another nation that has signed and ratified the Association Agreement with the EU recently, much to Kremlin angst.

Currently the Communist party is polling at about 25%, and the Socialist Party, which is particularly weak this election, is on or about the threshold to enter parliament.  Whether that Socialist Party weakness has anything to do with President Putin’s overt support for the party is subjective – as is the outcome of any pondering as to why President Putin overtly backed the Socialists.  To kill their chances and divert their vote to either the Communists or a certain other runner soon to be commented upon perhaps?

In bygone days this combined Communist/Socialist approximately 30% polling, would have left the pro-European integration parties with a firm electoral mandate, in no way putting any doubt over the continued adherence to the recently ratified agreements with the EU.

However, this year there is a new candidate with some momentum polling about 18%.  Naturally “populist” in nature, a candidate who claims to be both anti Association Agreement and anti Eurasian Union too.  Currently, anyway.  His manifesto is more or less maintaining the status quo between Europe and Russia whilst eliminating corruption, renationalising previously privatised State assets, and espousing the imperialist nature of Romania toward Moldova.

The populist candidate is Renato Usatii, a thirty-something Moldavian who has made a fortune in business with a specific Russian client.  Indeed, he is very well connected in Moscow.  His business more or less has the monopoly in supplying specialist fabrication equipment to Russian Railways, run by Vladimir Yakunin.  Mr Yakunin being a long time friend and trusted ally of President Putin.

Whether or not Mr Usatii knows Mr Yakunin or Mr Putin personally is somewhat irrelevant.  Anybody who knows anything about Russia and the necessary maneuvering required to corner any significant market there, knows only too well, this does not occur by ability or business acumen alone – indeed often neither count for much.  It is about who you know and how a deal can be structured to insure “everybody eats” from it.  In short, cronyism/corruption – the combating of which is one of the cornerstones of the populist manifesto Mr Usatii is running under.

Anyway, a return to the polling numbers.  Approximately 25% + 5% + 18% comes to 48% of the vote that is for candidates who are either outright, or very likely to make, European integration a glacial process – or attempt to reverse it.  A somewhat safer margin for the pro-European factions should the Socialists fail to gain 5% or more of the vote and thus fail to enter parliament perhaps – but still a significant number that can make swift progress complicated.

Ergo, the question arises as to whether there will be a repeat of the Ukrainian scenario for Mr Usatii, when the populist support for the Radical Party significantly contracted on the day at the polling station?  Alternatively, will it significantly increase – if so, at a constituency cost to whom?

Keep a watchful eye on Moldova this weekend.  There will be repercussions both within and beyond its borders, whatever the result.



Odessa refinery shenanigans

November 25, 2014

Following on from yesterday’s entry and the successfully prevented appointment of Petr Hlytsov as Chairman of Odessa Regional Administration – and the anti-reform, ex-Regionaire, Klyuyev puppet constituency of the elite within Odessa that backed him – some commentators are rather speculatively see that his opponent, Mikhail Shmushkovitch, falling tantalizingly close to, but not reaching the 67 votes required to take permanent office, is really a battle between President Poroshenko and Ihor Kolomoyskyi for control of Odessa – when combined with the fact that Igor Palitsia, the current Govenor, is a Kolomoyskyi man who will also be required to resign to take his seat in the next RADA.

Time for a disclosure.

On Friday afternoon this blog was in the office of Alexie Goncharenko at the Regional Administration, shortly after his resignation as Chair.  Discussions about the next Chairman and Governor occurred – although that was not the purpose of being there.

To be blunt, the voting results would have been much closer if Mr Goncharneko had not spent the previous week lobbying the council members hard on behalf of fellow Block Poroshenko  party member Mr Shmushkovitch to become his replacement.

To be equally clear, Mr Goncharenko considers repelling the forces of Mr Hlytsov, albeit temporarily, a victory.

Two weeks ago, whilst Mr Goncharneko was in Strasbourg, Mr Hlytsov began gathering the corrupt and corruptible hordes, those about to be subjected to lustration within the council, and the external local Odessa “players of influence” to his flag.  A case of whilst the cat was away, etc.

Hence, demolishing a good deal of what was nefariously constructed in his absence, Mr Goncharenko deems a victory – and perhaps it is.

By the time the next vote takes place in mid-December, things may look different.  In the meantime, Mr Shmushkovitch assumes the position of “Acting Chair” in place of Mr Goncharenko.

What have all these Regional Council shenanigans got to do with Igor Kolomoyskyi? – Very little.  Whether Mr Shmushkovitch sits in the “Chairman” chair in an acting or substantive role, neither diminishes nor increases the power he holds.  Mr Kolomoyskyi has no candidate in the fight for Chairman of the Odessa Regional Council.  With Mr Hlytsov being a bought and paid for Andrei Klyuyev man, he seems hardly likely to be the preferred choice of Mr Kolomoyskyi.  Therefore, any muted supported for Mr Shmushkovitch from the Kolomoyskyi people (if indeed it was muted) within the Regional Council relate to concessions to be hopefully gained rather than toppling a Poroshenko candidate for the sake of it.

So, if Odessa Regional Council is so unimportant to Mr Kolomoyskyi that he has no runner in the race for Chair, what concessions could he be seeking in Odessa for any “currently restrained” support?  His active  business interests in Odessa at not particularly extensive.  They have not noticeably increased since his friend became Governor either.

Well, one of Mr Kolomoyski’s main interests in Odessa, is in an entity in which he has no interest – financially speaking.  That is the Odessa refinery.

Odessa refinery was sold to now fugitive Sergei Kurchenko, a man thoroughly emeshed within “The Family” Yanukovych regime, and who has currently taken refuge in Moscow for the foreseeable future.

Aside from a governmental need to prevent the refinery working, thus preventing a possibly fraudulently acquired asset generating illicit revenue for “The Family” whilst in Russia – there is also a Mr Kolomoyskyi interest.

Ihor Kolomoyskyi’s Privat Bank has a 42% share in an oil refinery called Ukranafta.  That refinery has not been working at full capacity – thus neither have its profits been all they could be.  Ergo it is in the interests of Mr Kolomoyskyi to see the Odessa refinery officially closed under the auspices of money laundering prevention/further facilitation of fraud that would benefit the previous regime – even if that is not his real driver.

Today, that closure is going to happen.  The Prosecutors Office in Odessa will arrest Odessa Refinery to prevent illicit oil sales.  Mr Kolomoyski’s comment?  “It’s not our asset, and we are not interested in it, we have underused Kremenchug plant, and the Odessa refinery should be closed so as not to spoil the ecology of Odessa.  Odessa should shine after the loss of the Crimea.”

There is no political need to own either Governor or Regional Council to achieve the closure of Odessa Refinery, and in doing so improving the output of Mr Kholomoyski’s Kremenchug refinery.  Owning or renting a prosecutor or a judge is all that is necessary for the asset to be arrested.

Once arrested, there can be no doubt that the refinery will remain closed for some time.  Ukraine is busy trying to privatise assets to get them off of the government books – not put them back on.  Mr Kurchenko will have great difficulty in releasing this asset – and until it is released, nobody can do anything with it.  Presumably all oil at Odessa Refinery will now be stored at the State owned Ukrtransnefteprodukt.

One of Mr Kolomoyskyi major interests in Odessa (in which he has no interest) has been achieved – no Governor or Regional Council (Chairman or otherwise) required.

As for who will become the next Governor of Odessa – a position in which Mr Kolomoyskyi current does have the top dog?  That discussion took place on Friday afternoon too, although all opined on that subject – for now – will remain unwritten.


Odessa politics – Resistance is not necessarily futile

November 24, 2014

A few days ago, within this entry, the following paragraph appeared:

“Locally, the fact the current Odessa Governor Igor Palitsia, and Chairman of the Regional Council Alexiy Goncharenko (both Block Poroshenko) become MPs when the new RADA sits, leaving an organised criminal for a Mayor, and a possible replacement for Goncharenko, his current council Deputy Chairman, a bought and paid for Andriy Klyuyev drone, are a concern – the new Chair of the Regional Council, an issue to be resolved this afternoon. Whomever the new Governor will be, will need to spend a significant amount of political energy trying to keep any reform agenda and implementation alive against the willing obstructionism that the Mayor, and possibly the new Regional Council Chairman, will surely robustly present. All rather grim when adding to that mix, many of the infamous returned single mandate seat MPs for Odessa, such as Sergei Kivalov, Anton Cisse etc. A toxic concoction.”

Perhaps an outcome, such as it is, should be given, prior to addressing the question in the title of this entry.

The current situation is as follows:  The Chairman of the Odessa Regional Council, Alexie Goncharenko resigned from that position on Friday – necessarily so having been elected to the RADA on the Poroshenko party list.  He officially cannot sit in two chairs, though historically many have tried to do so.  Thus the Regional Council is required to elected a new Chair following Mr Goncharenko’s resignation.  The same applies to Igor Palitsia the current Governor of Odessa – theoretically, he too must resign as Governor, though it falls to the president appoint a successor under current legislation – no elected replacement for Governor.

The runners and riders to replace Alexie Goncharenko as Chair are Mikhail Shmushkovitch, currently First Vice Chairman of Block Poroshenko Party in the Odessa region.

Secondly, Petr Hlytsov, a bought and paid for drone of the  Andrei Klyuyev.  Mr Klyuyev is currently wanted by the Ukrainian authorities in connection with his actions whilst highly placed in the Yanukovych regime.  Mr Hlystov supported by many ex-Regionaires and the pro-Russia Rodina Party lead by Igor Markov, currently in Moscow making televised appearances in support of the separatist cause in The Donbas.  Indeed, one Party Rodina deputy from Odessa Regional Council, Vadim Savenko, is actually fighting for the separatist cause in The Donbas against Ukrainian troops.

Also amongst that number, unsurprisingly, are those currently undergoing the “lustration process”.  The promises made for their support, should they be lustrated, that they would be appointed as advisors/councilors, and thus continue to “lead” (and bleed) the Oblast – albeit from a slightly different position.

In short, Mr Hlytsov went to great efforts to rally around him the anti-reformist ranks – whatever their reasoning and/or loyalty.

The voting required one candidate to gain 67 votes to be appointed as Chairman – which failed to occur.

The results were, Mr  Shmushkovitch – 62.  Mr Hlytsov – 44.  Abstentions – 6.

Thus, temporarily, Mr Shmushkovitch assumes the position of “Acting Chairman” until mid December when another vote is held.  Looking at the numbers, Mr Klyuyev, via his representatives, will have to dig deep and bribe a lot of Regional Council members to turn it  around.  Mr Shmushkovitch, need convince those who previously abstained and/or a few that previously voted for Mr Hlytsov of the hopelessness of their position – something perhaps easier to achieve from the position of “Acting Chairman”.

Thus the political forces of reformation verses regression continue to do battle for ascendancy – albeit  now at the local level and without any media attention.  Yet if the horribly captioned concept of “decentralisation” is to occur –   “devolution of power” would have been a far better expression – then the political fight for Odessa administration (and the administrations of every other city and Oblast) matters, and matters considerably.

The degree of resistance from the regions against any reform agenda is going to matter with regard to effective implementation – hopefully not something lost on those in Kyiv.


A sombre weekend – Holodomor remembered

November 23, 2014

Few words needed for this entry.


A time of sombre remembrance for the millions of Slavs who died needlessly as a result of Kremlin policy between 1932 – 1933.



The G3 Test for Ukraine – (and a shameless plug)

November 22, 2014

Regular readers will have noticed that yesterday there was no entry.

The reason for this was a meeting with some members of the western diplomatic community regarding the state of affairs in Ukraine (and Odessa) – particularly the present, and the immediate future.

Being a Chatham House Member, naturally the Chatham House Rule applies – Further, only the generalities of some of the subjects discussed will be retold.  This blog holds dear the relationships it has with both the domestic and foreign political and diplomatic establishment, and thus nothing that will jeopardise such relationships will ever be disclosed.

Disclaimers made, on to a few issues pondered.

The fact that most of the Ukrainian constituency, aside from awareness of the Hryvnia/US$ rate, seem somewhat unaware of the dire economic situation Ukraine finds itself in was agreed.

The fractious composition of the new coalition was also noted.  That almost one month after the RADA elections neither the newly elected deputies, nor an end to politicking within the new coalition, have started work cannot be ignored.  The clock is ticking and little is being done of note in the public realm.  That is not to mention what appears to be an already antagonistic relationship between some within the Presidential Administration and proposed government.

That President Poroshenko is clearly overstepping his constitutional parameters and meddling in the constitutionally defined playground of the RADA/Cabinet of Ministers is clear.  Whether he will step back when the new RADA eventually swears its oath and begins work remains to be seen.

Concerns about the hollowing out of civil society and the media as the better known enter the RADA as MPs were muted.

Locally, the fact the current Odessa Governor Igor Palitsia, and Chairman of the Regional Council Alexiy Goncharenko (both Block Poroshenko) become MPs when the new RADA sits, leaving an organised criminal for a Mayor, and a possible replacement for Goncharenko, his current council Deputy Chairman, a bought and paid for Andriy Klyuyev drone, are a concern – the new Chair of the Regional Council, an issue to be resolved this afternoon.  Whomever the new Governor will be, will need to spend a significant amount of political energy trying to keep any reform agenda and implementation alive against the willing obstructionism that the Mayor, and possibly the new Regional Council Chairman, will surely robustly present.  All rather grim when adding to that mix, many of the infamous returned single mandate seat MPs for Odessa, such as Sergei Kivalov, Anton Cisse etc.  A toxic concoction.

The fact that Odessa has almost 30 consulates – both “eastern” and “western” nations – be the fully-fledged consulates (most are) or honorary consuls (Germany, Austria etc), and none engage with the media, civil society or the public regularly if at all, also raised.  A large local diplomatic presence – no local diplomatic interaction outside consular premises.

So far, so patently obvious to those who follow these things even remotely closely – whether that be nationally or locally to Odessa.  So far, also, a clear statement that the foreign diplomatic corps “get it” regarding Ukraine – even if their capitals don’t, choose not to, or fail to heed the detailed reports that continuously flow, that they are provided.

In short, the consensus was the first 90 days of any new RADA and Cabinet of Ministers needs to deliver reform legislation and its robust and uncompromising implementation.  Whilst recognising that some reforms can be felt by society immediately, such as tax reforms, others simply do take time to work through the system.  The latter, of course, are likely to be those that meander, stray, lose momentum, and eventually result in no change.  Needless to say, the ability to effectively implement any reforms was of more concern than that of the ability to draft and pass the legislation creating the reforms.  It brought about a discussion of benchmarks, measurement, transparency and all those policy issues where Ukraine consistently fails.

The ability to actually implement reforms effectively will have a direct repercussions on inward investment.  And inward investment for Ukraine there will be.  Of that the discussion left little room for doubt – if Ukraine is seen to begin systematically delivering and implementing reform.

As such, one of the very first public and international tests Ukraine will face will be the national G3 tender and licensing, due to take place in January 2015.

Quite simply – Ukraine has to get it right!

Whether Ukraine is aware of it or not – there is a lot of corporate and private FDI watching the G3 tender very closely indeed.  In fact, it cannot be typed in bold or underlined heavily enough.  There can be no cock-ups with the G3 tender and licensing by Ukraine.

If it gets it wrong, or it is thought to be even slightly “smelly”, it is one of the (early) indicators that will have a notable impact on corporate/private inward investment.  It will certainly be a significant nail – although not the final nail – in the inward investment coffin for Ukraine.

If it goes as it should, however, from the discussion, there is quite clearly some solid and significant interest in Ukraine – despite the current situation in the east.

Naturally, not only the international/foreign national corporations/private investors are looking closely at the G3 tender – or it would not have been agreed as a significant event amongst those present from the various nations during the discussion with this blog.  The western political and diplomatic classes are also looking for clear signs of a perfect execution of this tender and licensing too.

Ergo, dear readers, keep a very watchful eye upon the events surrounding the G3 tender and licensing – for it has far greater implications for Ukraine than any communications (and security) issue.

As for the shameless plug mentioned in the title?

At the end of August a request to write a short essay for inclusion in the annual publication that is the “Eastern Europe, Russia & Central Asia  (2015 Edition)” – Routledge,  was received and duly submitted in double quick time – and thus subsequently forgotten about, until yesterday, when an email arrived stating it had gone to print.   Blimey!

Proof that this blog is capable of more than mere poorly assembled ramblings, and can turn out academic prose when necessary perhaps.

Anyway, as Christmas is coming and with all readers being erudite and enlightened, thus wanting to purchase something worthy of a read over the festive season and beyond, do try find yourself a copy – though it be a rather pricey tome.  Alternatively, for website members, the same essay can be found at the Europa World, imaginatively titled, “The Separatists Movements In Eastern Ukraine And Their Association With Russian State Structures” – and that association is far more interesting than it may seem.

End of shameless plug.


Revolting judiciary? Predictably so

November 20, 2014

On 5th October, an entry appeared here regarding the far from good “Lustration Law”.

“Amendments will surely follow once the Constitutional Court and Venice Commission recommendations are forthcoming, hopefully transforming the “OK” into “good” legislation – but will any amendments be made in a timely way? Lustration will surely begin very shortly after the law is signed, and certainly almost immediately after a new RADA takes up its mandate.

As the first branch of power for lustration necessarily need be the judiciary, how wise is it to subject those learned (and corrupt) individuals to a law that is “OK”, will probably be amended after they have been subjected to the original text, and therefore open a can of “appeal” worms?”

Prophetic words?  So it appears.

Indeed, as foreseen, subjecting those learned (and corrupt) individuals to a law that was clearly never more than OK, and far from being good, is subject to legal challenge from th learned (and corrupt) judiciary within their own corrupted court system.  27 of 43 Supreme Court Judges have voted to send the Lustration Law to the Constitutional Court.  Those 27 voting in favour of challenging the Lustration Law (informally) headed by the Head of the Supreme Court, Judge Romaniuk – whom perhaps would struggle to justify his wealth if ever subjected to the Lustration Law, as would many of his colleagues.

Under challenge are Part 1 – Clause 6. Part 2 – Clause 2.  Part 2 – paragraph 13.  Part 3 and Article 3.  Thus whilst not striking down the entire Lustration Law, it would certainly seem to hollow it out somewhat.

That (corrupt) judiciary will use the corrupt court system to have a thoroughly discredited Constitutional Court hear an appeal from the thoroughly discredited Supreme Court to hollow out a poorly crafted Lustration Law aimed at removing many of their number from public office is a trajicomedy at best, and a case of playing with matches amongst societal powder kegs at worst.  Either way, a political disaster potentially awaits.

That this occurs is clearly no surprise to some – lest how could this have been predicted here on 5th October?  To legislate in haste and repent at leisure is bad enough – to then be forced to repeal and/or amend at the hands of the corrupted judiciary saving themselves from within their corrupted system, comes at notable political cost when society demands the cleaning of the legal system of these corrupt practitioners.

In sum, all something of a mess.

The entry of 5th October now reads rather well, considering where we now – predictably – find ourselves.


Cherry-picking within the Association Agreement – EU CSDP

November 19, 2014

Now and again it pays to wander back through the now ratified Association Agreement and Deep & Comprehensive Trade Agreement in an effort to gauge the distance that need be traveled by Ukraine to fully meet its obligations under this legal instrument.

Having got no further than Title II,  Article 7 – “Foregin and Security Policy”, a topical subject for Ukraine and Europe, one may perhaps wonder how – or why – Ukraine will meet its obligations to the Common Security and Defence Policy (CSDP), when that policy is all but defunct, alive only on paper, but for all practical purposes – in intensive care, if not quite dead.

Article 7  Foreign and security policy

1. The Parties shall intensify their dialogue and cooperation and promote gradual convergence in the area of foreign and security policy, including the Common Security and Defence Policy (CSDP), and shall address in particular issues of conflict prevention and crisis management, regional stability, disarmament, non-proliferation, arms control and arms export control as well as enhanced mutually-beneficial dialogue in the field of space. Cooperation will be based on common values and mutual interests, and shall aim at increasing policy convergence and effectiveness, and promoting joint policy planning. To this end, the Parties shall make use of bilateral, international and regional fora.
EU/UA/en 17

Article 10  Conflict prevention, crisis management and military-technological cooperation

1. The Parties shall enhance practical cooperation in conflict prevention and crisis management, in particular with a view to increasing the participation of Ukraine in EU-led civilian and military crisis management operations as well as relevant exercises and training activities, including those carried out in the framework of the Common Security and Defence Policy (CSDP).

At the very core of the CSDP – and why it fails in  its task:

The CSDP offers a framework for cooperation within which the EU can conduct operational missions in third countries. Specifically, the aims of these missions are peace-keeping and strengthening international security. They rely on civil and military assets provided by Member States.

Before the Treaty of Lisbon entered into force, the tasks which could be carried out under the framework of the CSDP were:

humanitarian and rescue tasks;
conflict prevention and peace-keeping tasks;
tasks of combat forces in crisis management.

The Treaty of Lisbon adds three new tasks to this list:

joint disarmament operations;
military advice and assistance tasks;
tasks in post-conflict stabilisation.

The Treaty of Lisbon acknowledges the potential intervention of multinational forces in the implementation of the CSDP. These forces are the result of the military alliance between certain Member States who have decided to combine their capacities, equipment and personnel strength. The main “Euroforces” are:

Eurofor, regrouping land forces between Spain, France, Italy and Portugal;
Eurocorps, regrouping land forces between Germany, Belgium, Spain, France and Luxembourg;
Euromarfor, regrouping maritime forces between Spain, France, Italy and Portugal;
the European Air Group, regrouping air forces between Germany, Belgium, Spain, France, Italy, the Netherlands and the United Kingdom.

All but still born many would say, particularly so as it becomes increasingly clear that both the EU and NATO can only work at the lowest common denominator due to reticent Member States amongst their number.  As written here many times, coalitions of the willing within (and perhaps without) of these organisations seem the only possible way to do anything more than the absolute minimum.

Whatever, Ukraine is now legally bound to its agreement involving the CDSP – which is perhaps terminally ill, outside of being anything other than a talking-shop and budgetary waste.   Nicholas Witney, a former head of the European Defence Agency stated only last month “the vaunted battle group rapid reaction forces are terminally discredited after the latest failures to deploy them in the Mali and Central African Republic crises.  

If the EU is not going to do anything with the CSDP, then stop pretending and give the UN some of the support it needs as it is struggling to sustain operations across the world.”

If you are wondering why the CSDP failed to act in the aforementioned cases in Africa – France effectively vetoed it – in both cases.

The only way to save the CSDP?  Article 44 of the Lisbon Treaty:

1. Within the framework of the decisions adopted in accordance with Article 43, the Council may entrust the implementation of a task to a group of Member States which are willing and have the necessary capability for such a task. Those Member States, in association with the High Representative of the Union for Foreign Affairs and Security Policy, shall agree among themselves on the management of the task.

2. Member States participating in the task shall keep the Council regularly informed of its progress on their own initiative or at the request of another Member State. Those States shall inform the Council immediately should the completion of the task entail major consequences or require amendment of the objective, scope and conditions determined for the task in the decisions referred to in paragraph 1. In such cases, the Council shall adopt the necessary decisions.

There is no definition of a “task” in the Lisbon Treaty, and Article 44 is not specifically aimed at the CSDP either.  But what Article 44 does seemingly provide for is – a coalition of the willing – whatever any such “task” may be.

And so, back to Ukraine and its obligations under the Association Agreement, and by extension, to the CSDP.  Clearly, whilst the CSDP remains alive on paper, Ukraine is legally obliged to fulfill its commitments with the necessary integrity international instruments demand – even if in doing so it is clearly wasting political energy and time that could be better spent meeting other requirements of the agreements.

However, to ignore Article 7 and Article 10 and begin cherry-picking amongst its now ratified obligations to the EU and its Member States, then sets one off on a slippery slope of implementing only the parts Ukraine particularly likes or deems worthwhile, at the expense of other less favoured Articles that probably need to be adhered to, even if not liked, for the benefit of Ukraine.

There is a lot of decent stuff in the Association Agreement regarding frameworks to follow for Ukraine to meet the democratic aspirations of the nation.  How much stuff of dubious future worth, such as the CSDP, is also contained within the agreement is probably rather subjective – yet it will devour political energy just the same.


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