Posts Tagged ‘society’

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Odessa Port Side shuts down

December 30, 2016

Having twice failed to privatise the Odessa Port Side plant during 2016, and with debts mounting to creditors such as Naftogaz, the decision has been taken to temporarily, or perhaps better stated indefinitely, close the plant down with effect from 30th December.

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Valery Gorbatko, the plant Director since 1986 has resigned – which for any eventual buyer or State operational reshuffle/efficiency/transparency policy for the plant is no bad thing.  Accepting that resignation promptly would be a wise move.

From now the cost to the State will be dramatically reduced to those of maintenance and salaries – minor costs in comparison to running the plant with a (currently) low global demand for product and high gas demands to produce it.

It remains an open question as to when or even if a buyer (or long term leaser) will be found for Odessa Port Side.

Some 2017 national budgetary discipline implemented before 2016 has ended?

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The new Governor of Odessa is (not going to be a media celebrity) Maxim Stepanov

December 20, 2016

A few days ago an entry appeared listing the 31 candidates to replace Misha Saakshvili as Governor of Odessa, and within which made brief observation of the most suitable (and unsuitable) applicants.

After tests, situational tasks, and interviews a winner has emerged.

Maxim Stepanov scored the most points and is now awaiting presidential appointment.

Naturally Maxim Stepanov is not Misha Saakashvili and most readers will have never even heard of him.  The international media are unlikely to be beating down his door for an interview either.

So a few lines about Mr Stepanov.

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He is 42, graduated from Donetsk State Medical University in the late 1990s and then further studied International Economics at Kyiv National Economic University, completing his studies in 2004.

He has worked in both the private and public sector.  His early public sector resume consists of roles within energy.

The last decade has been spent thus; 2003/04 – Deputy Chairman of the State Tax Authority.  2004 -08, Chairman of the National Legal Union.  2008-10 Mr Stepanov was the First Deputy Head of the Odessa Regional Administration, thereafter Viktor Yanukovych came to power and he was banished from political life and exiled in a purely civil service role as the Director of Ukraine Printing Plant – the entity charged with producing passports, driving licences et al. – where he has sat ever since.

Clearly Mr Stepanov is a man well versed in Ukrainian bureaucracy and not indifferent to the politics of Odessa having previously spent 2 years within the Odessa Regional Administration.  Thus the tedious, systematic, boring and predictable work of a governor will no doubt be well within his grasp.

It now falls to President Poroshenko to appoint him and bring him in from political exile to fill the most senior civil service role in the oblast.

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A note to readers – You are all granted a 48 hour hiatus from the daily churn of the blog as your author will be traveling.

 

 

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Privat nationalisation and political weight loss

December 19, 2016

Ukraine has eventually taken the decision to nationalise Ihor Kolomoisky’s (and others) Privat Bank.

In some ways it is a surprise that the will to do so was actually found, despite that for more than 2 years everybody and anybody with any knowledge of Privat Bank has hardly been shy in opining that it presented serious risk to the Ukrainian economy and had it not been systemically vital to the Ukrainian banking system it would otherwise have been closed.

To a man/woman, of those spoken to one to one by the blog, be they politicians, economists, diplomats or international bankers, all recognised that the Privat problem had to be addressed and that nationalising it was the better of the options available – if the will could be found to do so.

Lo it has come to pass that 100% of Privat shares are now owned by the State.

How grubby the deal struck between Ihor Kolomoisky and The State is, remains unknown.  For a man like Ihor Kolomoisky to “voluntarily”  “sell” his shares to the State in what has been a significant political and financial lever over the State for him for many years with no gains to him pushes the boundaries of belief.  With the ability to simply put the Ukrainian banking sector into melt down, there is presumably a quid pro quo no matter how small yet favourable that may be in return for the “voluntary” handing over of all shares.

So be it.

Questions will undoubtedly be asked regarding the large amount of PrivatBank loans to its owners (Mr Kolomoisky and friends), other companies with the same owners, and to those associated with the owners, that have consistently been taken out with no intention of repaying them.

What is the exact cash figure these nefarious loans amount to?  What are the chances of those loans now being serviced and eventually repaid by those that took them and who are extremely skilled at historically saddling the State with their debts?

On balance, should a reader accept that those loans will probably not be repaid, thus in assuming these non-performing loans (debts) in however many $ billion they amount to, is that still a price worth paying to insure that PrivatBank can no longer collapse the entire Ukrainian banking system?

Even if agreements have been reached to now begin to repay these loans, the question is then over what period of time (in the unlikely event they will be repaid in full and in the spirit of any agreements made)?

The question presented is therefore one of short term (debt assumption leading probable loses when loans are not repaid) verses the medium/longer term view of what price is put upon insuring the entire national banking system will not collapse due to Prvat?

Financial issues aside, there is of course politics to consider.

The last time the nationalisation of Privat was mentioned by the blog in September, the politics were “Tymoshenko orientated”.  Mrs Tymoshenko is not in favour of the nationalisation of Privat as it doesn’t really work to her advantage.

Ms Tymoshenko aside, broader questions need now be asked about how the nationalisation of Privat changes the political and/or oligarch power dynamics with a major Kolomoisky lever now surrendered.

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Mr Kolomoisky can no longer use Privat as a personal piggy bank.  How does it change his ability to buy parliamentary votes for hire and/or buy entire political parties?  Will it effect any future voting outcomes?  To mitigate, will key voting personnel previously simply bought, now start to appear in Kolomoisky business structures instead for the purpose of leverage over their vote?

In short, just how much political weight loss has been incurred by Mr Kolomoisky – if any?

Without the “ace up the sleeve” of a persistent ability to cause national banking melt down, how does that effect the Kolomoisky position when negotiating how next to screw the State?

How will the rest of the oligarchy class react?  Will they make peace with the State or solidify around a common cause yet further in screwing it over?

How will this effect a poor presidential poll rating if he is perceived to have engineered the right thing for the country, or alternatively is perceived as having used his position to weaken yet another oligarch to his own advantage?  The two are not mutually exclusive, but that is how it will be presented.

Can Mr Kolomoisky now be certain that in what appears prima facie to be a weakened position, he will now not be called to account for innumerable scams and schemes over the years?  Was a de facto arrangement made that in effect grants amnesty via a promise of non-prosecution as part of the deal?  Are there other “compensatory” arrangements reached that will filter into the system over time that will be beneficial to Mr Kolomoisky’s other interests?

The repercussions of this nationalisation financially are on balance likely to be beneficial for Ukraine and the least worst option that could have been taken.  As long as Privat is managed prudently henceforth over the medium term this act is the most sensible option available.  In the long term, it would be wise to eventually return Privat to the private sector – once its systemic and internal risks have been mitigated against.

What is far less clear are the political and oligarchy/power behind the curtain repercussions.  It may be some time before those become fully evident.

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Local elections, the CEC, and political control by proxie – Ukraine

December 18, 2016

December witnesses local elections in several areas in Ukraine.  11th December and 18th December respectively saw voting in newly formed combined territorial communities designed to best leverage local politics (in particular budgets) within “decentralisation” – or so the theory goes.

Clearly at the time of writing the results of 18th December voting is unknown.

Results from 11th December are known.

Yulia Tymoshenko’s Batkivshchyna Party secured 123 local deputies, in part because when it comes to party outreach into local politics Batkivshchyna has always had the best party administrative set up in Ukraine.  No other party can or does come close to Batkivshchyna when it comes to the number of local and regional party offices.

A reader may ponder just how well Batkivshchyna would do if it were actually a real political party if only it could free itself from being nothing more than a political vehicle for Yulia Tymoshenko.  It could then develop some genuine policies that define what the party stands for rather than having to cope with Ms Tymoshenko’s ego, her empty populist rhetoric, and politically expedient flip-flopping.

When it comes to the number of elected deputies, second with 86 came Nash Krai, and Block Poroshenko coming third with 60 elected officials.

As regular readers will know however, Nash Krai is a technical party created by The Bankova (Presidential Administration) to split the Opposition Block (former Party of Regions) vote in October 2014.  This it successfully did and has continued to do.

That is not to imply that Nash Krai is without agency.  It certainly can and does do its own political thing and also votes in the interests of its parliamentarians (not necessarily its constituents) – ergo not always in line with the designs of the President or Government does it vote.  That however is within the parameters expected of a technical party if the facade of independence is to be projected.  When it truly counts support for The Bankova is expected.

However, Nash Krai as a technical party may prove to be problematic in the near future.  It is starting to convincingly out perform Block Poroshenko at the ballot box frequently.  Technical parties also expensive.  Not only does Block Poroshenko require financing, so does Nash Krai.  If finances are diminishing and the electorate continue to swell the Nash Krai machinery via electoral success after electoral success, then sooner or later the tail may start to wag the dog.

That tail wagging dog issue may start in the provinces, but eventually it may reach the centre.  This combined with quality local candidates preferring to run for parties other than that of the president will, by extension, make the next Verkhovna Rada elections interesting.  Even if (or when) state administrative resources are misused by the current powers that be to further their cause, how likely is it that it will be returned the largest party?

For now The Bankova’s pet project (Nash Krai) may remain loyal when required to be so – but for how long?

It is perhaps now necessary to focus upon how well it does vis a vis Block Poroshenko in every electoral vote henceforth, for losing control of the provinces because a pet project goes rouge will have an impact come larger national elections if the decentralised local budgets cannot be abused for the electioneering benefit of those at the centre of power.   Things begin to fray at the edges – and can completely unwind if care is not taken.

(Lo it is no surprise that since new legislation came into force in May 2016, new regional Governors selected by transparent “competition” have all been Block Poroshenko.)

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Further, these elections occur under an illegitimate Central Election Committee.  As noted in an October entry, 12 of the 15 CEC members have long since lost their legal mandates to be part of the CEC.  That elections continue under a clearly illegitimate CEC is no surprise.  (The entry also explains why the current electoral laws are unlikely to change.)

As stated in the aforementioned link – “However, despite any and all the political rhetoric that will surround the CEC issue prior to the year end, it seems extremely unlikely that those who currently compose the current CEC will be changed or be given new mandates.

Firstly the budget and other legislative matters will simply take priority.  Thus it follows that the issue will (once again) be put on the back-burner.  Sometime in early 2017 would appear to be the most hopeful (perhaps even fanciful) time frame when it will be addressed.   Secondly a reader may question any real political desire to actually do anything about changing the current CEC composition, providing doubt that early 2017 is indeed realistic.

As is always the case in Ukraine far too much attention will be given to who is put forward for the CEC positions rather than the institution, its role, and the legislation that it is charged with implementing and overseeing – and that legislation is certainly poor.”

Since that entry was written, the Chairman of the Central Election Committee, Mikhail Ohendovsky is now subject to criminal investigation by NABU (the anti corruption agency).  Thus the “fanciful” early 2017 timeline in the above quote may now be a little more realistic.  With the Chairman subject to criminal investigation and 12 of 15 committee members with mandates that expired in June 2014 it remains to be seen just how much longer this can be willfully ignored.

Thus the usually headline avoiding local elections this December may yet again avoid the headlines – but (local governance and local democracy aside) they act as a timely reminder of increasing reliance upon The Bankova technical party Nash Krai in the provinces by the Poroshenko centre and the prospect of tail wagging dog, and also the potential time frame for dealing with the still willfully unaddressed CEC issues.

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31 candidates to replace Misha Saakashvili as Governor of Odessa. Who’s who?

December 16, 2016

Although most readers will not be particularly interested in the replacement for Misha Saakashvili as Governor of Odessa, having written an occasional  few lines on the subject as potential candidates expressed interest, a full list therefore follows now that candidate applications are closed.

Surprisingly Pavel Zhebrivskyi, the former head of the Donetsk military and civil administration is not listed.  Sadly, for his eccentricity, flamboyance, questionably effeminate nature, and pure entertainment value Garik Korogodski is also absent.

Those successfully registering their candidacy are as follows (and appear in no particular order):

Igor Romanenko, Alexandr Vashenko, Alexandr Ostapenko, Sergei Pomazan, Elizabeth Pyshko-Tsibylyak, Volodymyr Levitskyi, Artem Vaschilenko, Vladislav Grigorchyk, Gennady Chekita, Dmitry Sokolyanskyi, Roman Saromaga, Anatoli Vorohaev, Volodymyr Gavrish, Yulia Melnik, Vasily Horbal, Igor Smirnov, Alexandr Tymoshenko, Valeri Stepanov, Dmitry Spivak, Maxim Berdnik, Oksana Tomchuk, Maxim Stepanov, Alexandr Vinglovskyi, Igor Skosar, Sergei Mazur, Petro Lykyanchuk, Hanna Trifan, Yevgene Chernvonenko and Yuri Chizhmar.

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The most (in)famous among the candidates was the first to throw his hat into the ring, Yevgene Chernovenko – a member of Tymoshenko’s first government and also a former Governor.  A man that if allowed to emerge the winner will have clearly have had to strike a deal with The Bankova to do so as his loyalty to the president is not exactly robust historically.

Gennady Chekita may have no loyalty issues as far as The Bankova is concerned (he is the MP for the Malinovsky district elected under Block Poroshenko and Verkhovna Rada Economics Committee member) but it is questionable if he will to be allowed to emerge the winner as it would mean a by-election for his single mandate seat – which may not go the way of Block Poroshenko.

Another current MP in the Verkhovna Rada is Yuri Chizhmar of the Radical Party – and therefore unlikely to get the tacit nod from The Bankova to emerge as the top candidate for a region as strategic as Odessa (both geographically and by way of large, healthy, illicit money channels).

The current Mayor of Balta, Sergei Mazur is also a candidate.

Also among those holding local governance office previously are former Governor Vasliy Horbal, former Vice-Mayor Anatoly Vorohaev, a former chairman of a Regional State Administration, Volodymyr Gavrish and former City Deputy Dmitry Spivak.  Also former Deputy Governor of Luhansk Elizabeth Pyshko-Tsibylyak.   Last but by no means least from the civil service , former Odessa Deputy Governor and Deputy of the Tax Administration Maxim Stepanov.  Also former Deputy Chief of Staff Lieutenant General Ihor Romanenko is noted for his inclusion, and before leaving matters military, “Cyborg” (Donetsk Airport veteran) Alexandr Tymoshenko also appears.

There are also several candidates from the current Odessa Regional Administration, Sergei Pomazan, Yulia Melnik and Volodymyr Levitskyi.

Of the remaining names of any note (without any research) Chairman of the Ukrainian Business Support Centers (and “widows son”) Artem Vaschilenko then leaves but one.

The last name is Alexandr Ostapenko a former City Deputy and former Deputy Head of the Regional State Administration.  Of all the names, prima facie, Mr Ostapenko is perhaps the individual most easily identified as suited to the methodical, systematic, bureaucratic, boring work associated with the office of a regional governor.

Nevertheless, who ever emerges from the “competition” to replace Misha Saakashvili will be ranked first and foremost by their loyalty to the president.  Any dubious history and their ability to do the job will be of secondary importance.  There is simply no way an oblast like Odessa will be allowed to have a governor that is not loyal to the president first and foremost.

All hats are now thrown in the ring and therefore a reader may perhaps tentatively decide to rank them by way of loyalty to the president, overt party affiliation (if any), and latterly ability, for within that scoring matrix is any real competition for the post.

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Cultural dates for the diary – Odessa, Italy, Russia, Minsk (No Poland?)

December 15, 2016

For my erudite readers, a 24 hour hiatus from policy and politics and a climb from that grubby valley unto the high arts and cultural peaks with noteworthy and dates for the diary over the festive period.

The magnificent (seriously they really are very good) Odessa Philharmonic conducted by a true friend of the blog Mr Hobart Earle will be playing the following dates and venues:

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19th & 20th December – Tchaikovsky Christmas Gala at Odessa Philharmonic.  (20th December is Mr Earle’s birthday so be especially generous in your appreciation)

The New Year sees the Odessa Philharmonic performing 12 concerts at as many venues around Italy.

For the true connoisseur, there is no orchestra as accomplished with its Viennese programme anywhere east of Vienna, therefore expect a magnificent return to Odessa and all things Viennese on 15th and 17th January.  It goes without saying, highly recommended.

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26th January is for those with a taste for Haydin and Beethoven.

13th February is for the lovers, with the traditional Valentine’s programme.

21st February Mr Earle heads to Moscow’s Tchaikovsky Hall to dabble in some Grieg and Sibelius.

25th February for the many admirers of Verdi in Minsk who will receive a splendid performance of Aida.

Lo my erudite readership, if you are in Odessa, Italy, Moscow and Minsk (as many of you are if IP addresses are any indication) immerse yourselves in some high culture delivered by the Odessa Philharmonic under the baton of the only American cultural figure to have been awarded the “People’s Artist of Ukraine”.

Having made a particular point of lauding the Odessa Philharmonic with regard to all things Viennese when it comes to performance, it is worthy of pointing out that whenever it play its Polish programme, it is also at its best.

(Indeed Krzysztof Penderecki, who is undoubtedly the best Polish composer still with us (and one of the best ever) is hardly unknown to Mr Earle and vis versa.)

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Thus in the spirit of new annual culture budgets, Polish-Ukrainian relations et al., the question to intellectual Polish readers (and friends in some cases), is why the Odessa Philharmonic plays Italy, Belarus, Russia and Ukraine – but not Poland when it has a splendid, very well performed Polish repertoire?

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The official EU overview of Ukrainian progress 2016

December 13, 2016

A very short entry to bring a reader’s attention to the official EU overview of Ukrainian progress during 2016.

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Predictably the issues where Ukraine invariably fails (and highlighted by the blog) is left to the concluding paragraph.

“Reform in Ukraine is a long-term process looking to bring long-term results. As outlined in this report, many important reforms are ripe to move from the legislative and institutional phase to effective implementation, which will benefit Ukraine’s citizens and contribute further to its political association and economic integration with the EU. Ukrainian civil society and other stakeholders have suggested that the EU and Ukraine should do more to communicate publicly, both in Ukraine and abroad, and explain the rationale for, and benefits of, the reforms undertaken by the government.”

If only the blog had a Dollar for every time the phrase “effective policy” and “effective implementation” had been written during the many years it has been running!

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Savchenko in Minsk

December 12, 2016

As much as this blog was going to avoid comment upon Nadya Savhcenko’s meeting in Minsk with the leaders of the “DNR” Alexandr Zaharchenko, “LNR” Igor Plotnitsky, and Russian interlocutors on 7th December, too many emails, private messages and direct messages have arrived asking for comment that careful and limited comment there will be.

Firstly it has to be recognised that daily Ukrainian soldiers still die on the front lines in eastern Ukraine.  It may well be the case that those on the opposite side also suffer daily fatalities, though no figures are announced daily like those of the Ukrainian military.  Also Minsk, a framework document that has failed to deliver anything approaching a ceasefire (where the fire actually ceases) since its agreement more than 2 years ago and thus remains diplomatically alive only in the absence of any alternative – and indeed that alternative may actually be worse than continuing with the sham of Minsk.

However, at the very least, those freed following negotiations under Minsk will not consider the process a complete failure when their very freedom comes as a result.

Nevertheless it cannot be claimed that the process has been anything other than a failure in the eyes of many.

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Having met Nadya Savchenko a few times (the last time in June), with regard to her character of the many insights gleaned, and for the purposes of this entry, it is sufficient to note her strong willed personality – so strong that being an “institutional and/or team player” would clearly be secondary.  These character traits alone, as an entry from May made very clear, are not those particularly welcome within the Batkivshchyna Party.

Those personality traits and the fact that as a parliamentarian she has absolute immunity (and impunity) with regard the law, has the potential for some to be somewhat wary of unpredictable and or predictable but unstoppable acts.  (She can, as all other parliamentarians, do what she likes, when she likes, and without (immediate) legal repercussions until such time as parliamentary immunity is lifted by the Verkhovna Rada or her mandate expires.)

Ergo how and who could stop Nadya Savchenko from going to Minsk (other than Belarus)?

Nevertheless, there is such a thing as party discipline and Yulia Tymoshenko cannot afford to be seen as a weak leader of what is in effect nothing more than a Batkivshchyna Party that is political vehicle solely for promoting Yulia Tymoshenko.

Indeed, of Nadya Savchenko’s Minsk adventure, Batkivshchyna have stated they “consider unacceptable any negotiations with the leaders of “DNR” and “LC” and MP N.Savchenko did not coordinate her actions with the factions and parties, and has recently announced her participation in the new political project.”

That said, she is a member of Yulia Tymoshenko’s Batkivshchyna Party, and has unquestionably gone against the party line that is repeatedly and unambiguously on record.  The “distancing” in the above Batkivshchyna statement is not the same thing as party discipline, nor instigating disciplinary measures within the party for such a blatant departure from the party line.

However, to remove her from the party having been elected upon the party list (as No1 before Yulia Tymoshenko due to populist electioneering when Ms Savchenko was still incarcerated in Russia) opens the way for Ms Savchenko to lose her parliamentary status (as happened to former parliamentarians Mykola Tomenko and Igor Firsov per Article 81 of the Constitution).

The expected and inevitable dilemma for Ms Tymoshenko (foreseen in the May entry linked above) as to just how much she will allow herself (and Batkivshchyna) to be tarred with the undisciplined Ms Savchenko brush once again presents itself.

Dilemma!  What political cost to dealing with Ms Savchenko’s disregard for the party line by disciplinary measures, vis a vis looking weak for not doing so?

Further the SBU is now playing catch up – Yuri Tandit of the SBU making clear that they are now collecting and collating information regarding the Minsk meetings of Nadya Savchenko after the fact.

Nevertheless what’s done is done – and may well happen again (and again).

Ms Savchenko justifies her trip by stating “We must do our best, each of us, to take our heroes home even if we will have to pay those who shoot at us”, saying of President Poroshenko “He, like all of us, wants to pick up our children from captivity and the political prisoners from of Russia.  I am confident that the president on his level of doing everything possible to make this happen as quickly as possible.”

Well fair enough – or is it?

Why shouldn’t she do what she thinks she can?

Putting aside the issue of ugly optics and being seen to be negotiating with the public faces and “leaders” of the “Republics” directly (rather than indirectly and through “channels” as is standard fare, and for good reason of “legitimising” the other parties) there are issues of both her legitimacy and also wider coordination.  (That she has done this at the very least may now make her a “useful idiot” in a wider Kremlin secret service operation.)

And it is perhaps coordination that matters the most.

Ms Savchenko states that she traveled to Minsk on her personal Ukrainian passport and not her diplomatic passport.  Whether or not this is meant to infer a personal and not “official Nadya Savchenko MP” dialogue with the “leaders” of the “Republics” is a matter of perception.  As such, when it comes to framing, were any “negotiations” unofficially official (though they appear unsanctioned officially or tacitly), or were they officially unofficial to which any “negotiation” (whether it may or may not reap results) raises the question of what was “given” and “taken” in that negotiation and the ability, particularly by Ms Savchenko, to deliver thereafter.

Perhaps yet more problematic is that it may well be that this becomes a channel or negotiating format of choice for one side but not the other – thus undermining the negotiating formats that are already accepted and working.  Differences between official and unofficial channels may very well complicate matters further and also be deliberately used to frustrate progress by any party concerned in negotiations when those differences are exploited.  The potential nightmare scenario may arise where with insufficient care and coordination there is a real possibility that due to deliberate, or unintentional, mishandling of negotiations, those detained could be held for far longer than would otherwise have been the case.

If this was indeed a personal pilgrimage (well meaning as it may have been) there are real risks as well as potential rewards as a result.

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Whatever was negotiated and/or agreed may actually be counterproductive to any (or all recent progress) by the officially nominated trilateral groups.  Indeed it may be that an individual uncoordinated effort with such a focus on a specific issue distorts or blinds to the wider negotiating policy repercussions both in the immediate and longer term.

Further, even if Ms Savchenko’s personal and seemingly unofficial interjection delivers any much welcomed prisoner releases, that does not necessarily mean political gains for Ms Savchenko in the long term.  Many of her actions and statements have already raised red flags in some quarters in Ukraine – for her to succeed swiftly where 2 years of negotiations where heavyweights the like the OSCE, Messrs Kuchma and Gryzlov et al have delivered little, may raise as many (if not more) red flags as it would potential voters.

Time will tell how this plays out for Ms Savchenko, how Batkicshchyna (Ms Tymoshenko) deal with this, how much the SBU and the official negotiators will learn of the “negotiations” (and as importantly the resulting interpretations of all those present), and perhaps most critically for those already working so hard to release, whether there will be results within the parameters they have been asked to remain within.

Perhaps, considering the high profile Ms Savchenko has, what a reader may ponder most is that if Ukraine felt she was the most suitable of people to be directly involved in such negotiations then she most certainly would be – and that she isn’t may well say all that needs to be said.

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