Greece offers olive branch as search for allies begins

Greece sought to repair relations with its international creditors on Saturday (Jan 31) as the new anti-austerity government began a charm offensive in European capitals, even as Germany insisted it would not support any debt relief...

Just hours before Finance Minister Yanis Varoufakis headed to Paris to seek support for a renegotiation Greece's massive loans, Prime Minister Alexis Tsipras said he believed a deal could be reached with the European Union (EU) and International Monetary Fund (IMF).

"No side is seeking conflict and it has never been our intention to act unilaterally on Greek debt," Tsipras said in a statement issued to the Bloomberg news agency.

In its first meeting with creditors since it took office, the Greek government clashed with the head of the Eurozone finance ministers on Friday over its plans to rethink its rescue package and to halve Greece's debt.

Tsipras, who will himself visit Italian Prime Minister Matteo Renzi and French President Francois Hollande next week, said Greece had no intention of reneging on its commitments to the European Union and International Monetary Fund.

"My obligation to respect the clear mandate of the Greek people with respect to ending the policies of austerity and returning to a growth agenda, in no way entails that we will not fulfil our loan obligations to the ECB (European Central Bank) or the IMF," he said. "On the contrary, it means that we need time to breathe and create our own medium-term recovery programme."

This includes aiming to balance the budget - excluding debt repayments - and clamping down on tax evasion, corruption and policies which favour only a wealthy few, he said.

"I am absolutely confident that we will soon manage to reach a mutually beneficial agreement, both for Greece and for Europe as a whole," Tsipras said.

GERMANY HOLDS FIRM

Varoufakis was to leave for Paris on Saturday night with talks scheduled with French finance minister Michel Sapin and economy minister Emmanuel Macron on Sunday. Neither he nor Tsipras are intending to visit Germany, which has shouldered the bulk of Greece's loans and which strongly objects to Athens' plans.

Merkel on Saturday ruled out fresh debt relief for Greece, telling the Hamburger Abendblatt daily: "There has already been voluntary debt forgiveness by private creditors, banks have already slashed billions from Greece's debt."

"I do not envisage fresh debt cancellation," she said, as a new poll for broadcaster ZDF found 76 per cent of Germans oppose any reduction in debt.

Portuguese Prime Minister Pedro Passos Coelho also opposes any renegotiation of Greece's debt, saying it would "go against the interests of Portugal and the Portugese people".

Despite a restructuring in 2012, Greece is still lumbered with a debt pile of more than 315 billion euros, upwards of 175 per cent of gross domestic product (GDP) - an EU record.

But in its first week in power, the government scrapped the privatisation of Greece's two main ports and the state power company and announced a major raise in the minimum wage.

Varoufakis also raised the stakes by saying that Greece wanted direct access to its EU-IMF creditors and would no longer work with their widely hated fiscal audit staff team, known as the "troika".

Martin Schulz, the German head of the European Parliament, told the Frankfurter Allgemeine on Saturday that this position was "irresponsible".

GREEK BANK FEARS

Varoufakis's comments followed a strained meeting on Friday with Jeroen Dijsselbloem, who represents finance ministers from the 19-nation Eurozone. Dijsselbloem warned Athens that "taking unilateral steps or ignoring previous arrangements is not the way forward".

Greece has been promised another 7.2 billion euros (US$8.1 billion, S$10.9 billion) in funds from the EU, IMF and European Central Bank (ECB), but this is dependent on the completion of a review of reforms at the end of February.

• Varoufakis has said his government does not want the loans, but there are concerns Greece cannot survive without them. These concerns are focused on Greece's banks, which are helping the state stay afloat by purchasing its treasury bills - and which are being supported by the ECB.

• "If the ECB turns the tap off, it's over," Alexandre Delaigue, economics professor at the elite French military academy Saint-Cyr, told AFP.

The stunning success of Syriza in last Sunday's polls sent shockwaves through Europe and gave encouragement to other anti-austerity parties.

Tens of thousands of people, meanwhile, took to the streets of Madrid on Saturday in support of the Spanish party Podemos, which has been surging in polls ahead of elections later this year. Like Syriza, Podemos has found popular support by targeting corruption and rejecting austerity programmes aimed at lifting the countries out of deep economic crisis.

- AFP/fl
[channelnewsasia.com]
31/1/15 --1/2/15
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• Greece warned against trying to reverse bailout deals

Greece warned against trying to reverse bailout deals

The head of the Eurogroup warned on Friday that Greece could not ignore its international obligations, after a first meeting with the new anti-austerity government that wants to renegotiate its multi-billion-euro bailout...

"Taking unilateral steps or ignoring previous arrangements is not the way forward," Jeroen Dijsselbloem, representing Greece's eurozone creditors, told a news conference after talks with the leftist government of Prime Minister Alexis Tsipras.

For his part, new Finance Minister Yanis Varoufakis said Greece was willing to broker a deal, but not through the detested "troika" of fiscal auditors representing the country's international lenders.

Varoufakis, a maverick economist, said the government would seek "maximum cooperation" with the EU, the eurozone and the IMF and had already begun talks but would not cooperate with "a committee built on rotten foundations."

Dijsselbloem warned before arriving in Athens that the new Greek government is already setting itself an impossible task, raising expectations it cannot meet.

"If you add up all the promises (made in the election campaign), then the Greek budget will very quickly run totally off course," he said in Amsterdam.

Friday's talks come on the heels of warnings by the European Union and Germany that there was little support for reducing the debt, which the radical new government is hoping to cut in half.

New maverick Finance Minister Yanis Varoufakis will begin a tour of European capitals next week to press home Greece's case, meeting his British, French and Italian counterparts on Monday and Tuesday. Tsipras will also visit Italy and France next week.

Debt rating agency Fitch said Greece was still likely to reach a deal with its creditors but only after protracted talks damaging to the economy.

"There is a high risk that protracted and difficult negotiations will sap confidence and liquidity from the Greek economy," it said in a note.

Ahead of the meeting, Greek stocks lost another 1.59 percent a day after after plunging on concerns about the first moves of Tsipras's radical new administration to roll back several reforms underpinning the bailout.

European Parliament chief Martin Schulz, the first visiting foreign dignitary to meet Tsipras' government, on Thursday said the prime minister had assured him that Greece would seek "common ground" with its EU peers.

But in an interview late on Thursday, Schulz said Tsipras' coalition alliance with the Independent Greeks, a hardline nationalist party, was "not something good for the country."

"This government will enter into confrontation with the European Union at a time when dialogue is needed," he told SKAI TV.

Elected on Sunday, the new government has already begun to roll back years of austerity measures demanded by the EU and the International Monetary Fund in return for the huge bailout granted to avoid a financial meltdown in 2010, and says it will negotiate to halve the debt.

‘Debt reduction not on radar'

But European Commission chief Jean-Claude Juncker said a reduction of the 315-billion-euro debt linked to the bailout "is not on the radar".

"I don't think there's a majority in the Eurogroup... for a reduction of the debt," he told Germany's ARD television, referring to the eurozone's finance ministers.

Sigmar Gabriel, Germany's vice-chancellor and also its economy minister, said he expected Greece to "stick to its commitments" for fiscal and economic reform made in exchange for the bailout.

He was critical of a decision by the new government to scrap the privatisation of the two main ports of Piraeus and Thessaloniki, and the biggest Greek power company, decisions which have also drawn a rebuke from China that has a major investment in Piraeus.

• The Greek central bank said 4.0 billion euros in private deposits had been withdrawn from banks in December.

But Daniele Nouy, head of the European Central Bank's Supervisory Board, said despite the post-election turbulence, Greek lenders were "pretty strong".

First row over Russia statement

Tsipras' government managed to have its first foreign policy row this week after it complained to Brussels over allegedly not being consulted when the EU threatened new sanctions against Russia over the war in Ukraine.

EU foreign ministers eventually overcame Greece's reluctance and agreed Thursday to extend the sanctions against Russia.

Tsipras' Syriza party has been seen as pro-Russian, with Moscow's ambassador becoming the first foreign official to be received by the prime minister after his election victory. Many party members are former Communists.

Tsipras, who ousted the conservatives of former prime minister Antonis Samaras, has said Greece is no longer prepared to bow to the "politics of submission”, in a clear swipe at its international creditors.

Varoufakis has said the government wants "a pan-European New Deal" to encourage growth and help the continent deal with Greece's crisis.
(FRANCE 24 with AFP)
http://www.france24.com/en/20150130-greece-warned-against-trying-reverse-bailout-deals/
30/1/15

Greek PM Tsipras pledges radical change, markets tumble

Leftwing Greek Prime Minister Alexis Tsipras threw down an open challenge to international creditors today by halting privatisation plans agreed under the country's bailout deal, prompting a third day of heavy losses on financial markets...

A swift series of announcements signaled the newly installed government would stand by its anti-austerity pledges, setting it on course for a clash with European partners, led by Germany, which has said it will not renegotiate the aid package needed to help Greece pay its debts.

Tsipras told the first meeting of his cabinet members that they could not afford to disappoint the voters who gave them a mandate in Sunday's election, which his Syriza party won decisively.

After announcing a halt to the privatisation of the port of Piraeus yesterday, for which China's Cosco Group and four other suitors had been shortlisted, the government said on Wednesday it would block the sale of a stake in the Public Power Corporation of Greece (PPC).

It also plans to reinstate public sector employees judged to have been laid off without proper justification and announced rises in pension payments for retired people on low incomes.

Uncertainty over the new government's relations with the European Union went beyond economic policy. A day before the EU is expected to extend sanctions against Russia for six months, it was unclear if Athens would back its European partners on this move, after dissenting over a joint statement from the bloc on Ukraine yesterday.

Tsipras, who met Russia's ambassador to Athens on Monday and the Chinese envoy the next day, told ministers that the government would not seek "a mutually destructive clash" with creditors. But he warned Greece would not back down from demanding a renegotiation of debt.

"We are coming in to radically change the way that policies and administration are conducted in this country," he said.

Financial markets have taken fright. Greek bank stocks plunged more than 22 percent today, taking their cumulative losses since the election to 40 percent.

The overall Athens stock market fell almost 8 percent , while Greek five-year government bond yields hit around 13.5 percent. This marked their highest level since a 2012 restructuring which wrote off a large proportion of Greek debt held by private investors.

Newly-appointed Finance Minister Yanis Varoufakis, who meets Jeroen Dijsselbloem, head of the euro zone finance ministers' group on Friday, said negotiations would not be easy but he expected they would find common ground.

"There won't be a duel between Greece and Europe," he said, in his first meeting with reporters since taking office.

Varoufakis said he would meet the finance ministers of France and Italy - both countries which have pressed for a change of course in Europe from rigid budget orthodoxy - in the coming days.

France has ruled out straight cancellation of Greece's debt, about 80 percent of which is held by other euro zone governments and multinational organisations such as the IMF. However, Paris has said it would be open to talks on making Greece's debt burden more sustainable and Tsipras is expected to meet President Francois Hollande before an EU summit on Feb. 12.

The response from Germany was frosty. Economy Minister Sigmar Gabriel said Athens should have discussed the halt to privatisations with its partners before making an announcement.

"Citizens of other euro states have a right to see that the deals linked to their acts of solidarity are upheld," he said, adding that it would be the "wrong solution" for Greece to quit the euro but that it was up to Athens to decide.

Fears that talks between the new government and its creditors would break down, with unforeseeable consequences for Greece's future in Europe, fuelled the third successive day of f turmoil on the markets.

Tsipras said the government would pursue balanced budgets but would not seek to build up "unrealistic surpluses" to service Greece's massive public debt of more than 175 percent of gross domestic product.

Priorities would be helping the weakest sections of society, with policies to attack endemic cronyism and corruption in the economy, reduce waste and cut Greece's record unemployment.

The new government also confirmed it would stop the planned sale of state assets, in line with its election pledges.

Shares in PPC, which is 51 percent owned by the state and controls almost all of Greece's retail electricity market, were down nearly 13 percent, while Piraeus Port stock fell nearly 8 percent.

"We will halt immediately any privatisation of PPC," Energy Minister Panagiotis Lafazanis told Greek television a few hours before officially taking over his portfolio. "There will be a new PPC which will help considerably the restoration of the country's productive activities," he said.

The previous government of conservative Prime Minister Antonis Samaras passed legislation last year to spin off part of PPC to liberalise the energy market under a privatisation plan agreed under the EU/IMF bailout.
  http://www.buenosairesherald.com/article/180606/greek-pm-tsipras-pledges-radical-change-markets-tumble
28/1/15
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• Spain's anti-austerity Podemos hails Greek ally Syriza

EU to Continue Financial Aid Provision for Ukraine's Gas Debt Repayment (Official)

The European Union intends to continue the provision of financial assistance to Ukraine to help the country repay its debt for Russian gas, EU Ambassador to Russia Vigaudas Ushatskas stated Wednesday.

"Our aid reaches billion euros, including what we have already given and will give [to Ukraine]. We have been helping to reach a treaty between Russia and Ukraine on the whole range of complex gas issues. And we will allocate the amounts that will be needed to pay off [debts for] gas," Ushatskas told Ekho Moskvy radio.
According to him, the European Union and Russia share common interests in stabilizing the situation in Ukraine.

"Neither Russia, nor the European Commission, nor the IMF should be some kind of 'auntie' that would care for Ukraine all the time... Of course, this requires internal political, economic and social reforms for Ukraine not to be proclaimed as the most corrupt political system. On this basis the European Union highlights the unprecedented volumes of aid to Ukraine," Ushatskas added.

Ukraine's state oil and gas company Naftogaz said Tuesday that it had transferred the first tranche of $1.45 billion of its gas debt to Russia.

The final round of gas talks on October 30 between Russia and Ukraine, brokered by the European Union, ended with the signing of the so-called winter package agreement securing gas supplies to Ukraine until March.

Under the agreement, Russia will resume its delivery of gas to Ukraine at a price of $378 per 1,000 cubic meters till the end of 2014 and $365 for the same amount in the first quarter of 2015, while Kiev must pay Gazprom $3.1 billion of its debt to the company before the end of the year.

Gazprom switched Ukraine to a prepayment system for gas deliveries over its debt of more than $5 billion in June.(RIA Novosti)
5/11/14
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Related:

• Gazprom confirms Ukraine’s first $1.45bn gas tranche received...

• Gaz: Kiev a payé au russe Gazprom 1,45 milliard de dollars de sa dette ...

• Kiev Agrees With IMF to Pay for Russian Gas During Winter Period From Own Exchange Reserve

Kiev Agrees With IMF to Pay for Russian Gas During Winter Period From Own Exchange Reserve

Kiev has agreed with International Monetary Fund (IMF) that it will pay for Russian gas during the winter period from Ukraine's exchange reserves, the country's national bank said.

"We managed to agree with IMF that the payments for the gas can be made from our own exchange reserves and IMF will support us. That is why we are confident we can support all the payments to Gazprom on the recent gas agreement," the Head of Ukraine's National Bank Valeriia Gontareva said at the press briefing.
Earlier on Monday, Ukraine's Energy Minister Yuriy Prodan told RIA Novosti that Kiev has not yet paid for Russian gas, but aims to do so in the near future...................http://en.ria.ru/business/20141103/195047378/Kiev-Agrees-With-IMF-to-Pay-for-Russian-Gas-During-Winter-Period.html3/11/14
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Related:

• Russia Ukraine and EU agree gas supply deal (Günther H. Oettinger /EC)

• Settlement of remaining Ukraine debt to be discussed after Stockholm arbitration decision ...

Date for Trilateral Gas Talks Remains Undefined: Ukraine’s Energy Ministry

BRUSSELS, October 2  – The exact date for the next round of gas talks between Russia, Ukraine and the European Union has not been set yet, Ukrainian Energy Minister Yuriy Prodan told journalists Thursday.

"[The date] is undefined," Prodan, who held a bilateral meeting with EU Energy Commissioner Gunther Oettinger earlier on Thursday, said.

On Wednesday, Prodan said that the trilateral gas talks in the European Union-Russia-Ukraine format were likely to be held on Friday.

Later in the day, the Russian energy ministry's press service said the talks would not be held this week and that the date of the trilateral gas meeting would be determined next week.

Kiev is not happy with the winter package for Russia's natural gas deliveries to Ukraine, endorsed by Russia and the European Commission during the ministerial gas meeting in Berlin last Friday.

According to the plan, Ukraine would have to repay $3.1 billion of its gas debt to Russia and pay in advance for the delivery of five billion cubic meters of gas at a price of $385 per 1,000 cubic meters, with a discount of $100.

Kiev, however, rejects Russia's offer of the discount in the form of an export-duty exemption and wants the contract price to be reduced instead.

Ukraine also wants to agree the debt repayment schedule, as well as terms and schedules of future gas deliveries and insists on amending the current gas contract with Russia in order to formally authorize reverse deliveries of Russian gas to Ukraine from Europe.
(RIA Novosti)
2/10/14
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Related:

• Ukraine-Russia-EU gas talks postponed till next week. --Ukraine’s debt for gas exceeds $5 billion

  • La compagnia ucraina Naftogaz ha rimborsato le obbligazioni dal controvalore di 1,6 miliardi di dollari e pagato cedole per 75,76 milioni di dollari....

  • Ukrainian Energy Ministry Not Satisfied With Berlin ‘Winter Plan’ on Gas

Ukraine-Russia-EU gas talks postponed till next week. --Ukraine’s debt for gas exceeds $5 billion

The trilateral Russia-EU-Ukraine talks have been postponed till next week, a European Commission representative told TASS on Wednesday.
Russian Energy Ministry spokesperson also told TASS that the talks have been postponed.

Previous round of talks

After the tripartite talks in Berlin on September 26 Russia, the EU and Ukraine prepared a new package on the gas problem. The agreement should be coordinated by the governments of the countries.

European Energy Commissioner Gunther Oettinger, explaining the new agreement at a press conference after the meeting in Berlin, said Ukraine must pay $3.1 billion until the end of this year to repay its debt to Gazprom for the already supplied gas. The Russian company will supply five billion cubic meters of gas to Ukraine and give an option for five billion cubic meters more. The price will be set at $385 for 1,000 cubic metres with a $100 discount (from $485 Russia previously insisted on). The discount will be in force only for the next six months.
Ukraine will pay $2 billion to Gazprom before October 2 for the supplied gas, and at least $1.1 billion until the end of 2014, the EU commissioner said. Thus, $3.1 billion must be paid until the end of this year.
Oettinger said final payment to settle the debts must be made after the arbitration consideration (no earlier than in the summer of 2015). The final settlement will depend on the court decision.
Ukraine’s debt for gas exceeds $5 billion.
http://en.itar-tass.com/economy/752259
1/10/14
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Related:

• Ukrainian Energy Ministry Not Satisfied With Berlin ‘Winter Plan’ on Gas

• Russia Ready to Implement 'Winter Gas Plan,' Waiting for Kiev's Response (Alexander Novak, Energy Minister) 

• Next Trilateral Talks Over Gas to Take Place Between Russia, Ukraine, EC in October. ("Sometimes it happens that what is understood orally is interpreted in writing somewhat differently...")

• Gas talks: Oettinger proposed supply agreement for coming winter

• Russia, Ukraine reach interim deal on gas dispute

• Ukraine’s Naftogaz calls for new gas transit deal with Russia

Ukrainian Energy Ministry Not Satisfied With Berlin ‘Winter Plan’ on Gas

The Ukrainian Energy Ministry said Tuesday it had three reasons to object the “Winter Plan” on gas, endorsed by Russia and the European Commission during the ministerial gas meeting in Berlin last Friday.

The plan envisages that Kiev repays of $3.1 billion of its gas debt to Russia and pays in advance to Gazprom for the delivery of five billion cubic meters of gas at the price of $385 per 1,000 cubic meters, with a discount of $100. The plan, intended to reduce risks for transit of Europe-bound Russian gas via Ukraine, is to be in place until late March.

Kiev, however, rejects Russia’s offer of the $100 gas-price discount in the form of an export-duty exemption and wants the contract price to be reduced instead.

Ukraine also wants to agree the debt repayment schedule, as well as terms and schedules of future gas deliveries.

Kiev also insists on amending the current gas contract with Russia in order to formally authorize the reverse deliveries of Russian gas to Ukraine from Europe.

Earlier on Tuesday, Russian Energy Minister Alexander Novak said that Russia is ready for the "Winter Plan" of delivering natural gas to Ukraine and is waiting for Kiev's reaction.

Moscow and Kiev have a long history of disputes over natural gas deliveries. In June, Russia's gas giant Gazprom was forced to introduce a prepayment system for gas deliveries to Ukraine due to Kiev's massive debt which is currently estimated at $5.3 billion.

As Ukraine is not only a consumer, but also a major transit country for Russian gas supplies to Europe, the European Union has repeatedly emphasized the importance of trilateral gas talks, the next round of which is scheduled to take place in Berlin on October 2 and 3.
(RIA Novosti)
30/9/14
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• Russia Ready to Implement 'Winter Gas Plan,' Waiting for Kiev's Response (Alexander Novak, Energy Minister) 

• Next Trilateral Talks Over Gas to Take Place Between Russia, Ukraine, EC in October. ("Sometimes it happens that what is understood orally is interpreted in writing somewhat differently...")

• Gas talks: Oettinger proposed supply agreement for coming winter

• Russia, Ukraine reach interim deal on gas dispute

• Ukraine’s Naftogaz calls for new gas transit deal with Russia

Russia Ready to Implement 'Winter Gas Plan,' Waiting for Kiev's Response (Alexander Novak, Energy Minister)

Russia is ready to implement the “winter plan” of delivering natural gas to Ukraine and is waiting for Kiev’s reaction, Russian Energy Minister Alexander Novak said Tuesday.

“It all depends on Ukraine. I believe that from our side we are practically ready to do everything that we agreed on in regard to this packet. We’ll wait for a reaction from Ukraine in the next few days when everything becomes clear,” Novak told journalists.

The “winter gas packet” is due to be sent to the Russian government for approval soon.

“First, the three parties [Russia, Ukraine, EU] need to agree during the trilateral consultations, then we’ll be able to talk about the next steps: putting it on the government’s agenda,” Novak said.

Earlier, Novak said the next trilateral gas talks were scheduled to take place in Berlin on October 2-3.

In June, Russian gas giant Gazprom introduced a prepayment system for gas deliveries to Ukraine over Kiev's refusal to pay off its gas debt that currently is in excess of $5 billion.

Gazprom's head, Alexey Miller, said that Russia insisted that Ukraine pay $2 billion of its total debt in October and another $1.1 billion by the end of the year.

Ukraine's Minister of Energy Yuri Prodan said that Ukraine would first make an advance payment of $1.9 billion for the future delivery of five billion cubic meters of gas and then pay another $1.5 billion, as part of the debt, at the end of October, followed by $800 million in November and December.

The European Union has repeatedly emphasized the importance of trilateral gas talks, fearing possible troubles with gas transit to Europe via Ukraine.
 (RIA Novosti)30/9/14
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Related:

• Next Trilateral Talks Over Gas to Take Place Between Russia, Ukraine, EC in October. ("Sometimes it happens that what is understood orally is interpreted in writing somewhat differently...")

• Gas talks: Oettinger proposed supply agreement for coming winter

• Russia, Ukraine reach interim deal on gas dispute

• Ukraine’s Naftogaz calls for new gas transit deal with Russia

Already fragile ceasefire under strain in east Ukraine

Fighting flared near an airport in eastern Ukraine in breach of a fragile eight-day ceasefire as the prime minister accused Russian President Vladimir Putin of planning to destroy his country.
Prime Minister Arseny Yatseniuk said only membership of NATO would enable Ukraine to defend itself from external aggression.

Kiev and its Western backers accuse Moscow of sending troops and tanks into eastern Ukraine in support of pro-Russian separatists battling Ukrainian forces in a conflict that has killed more than 3,000 people. Russia denies the accusations.
A ceasefire negotiated by envoys from Ukraine, Russia, the separatists and Europe's OSCE security watchdog, has been in place in eastern Ukraine since Sept. 5 and is broadly holding despite regular but sporadic violations, especially in key flashpoints such as Donetsk.
Speaking at a conference in Kiev attended by Ukrainian and European lawmakers and business leaders on Saturday, Yatseniuk made clear he did not view the ceasefire as the start of a sustainable peace process because of Putin's ambitions.
"We are still in a stage of war and the key aggressor is the Russian Federation ... Putin wants another frozen conflict (in eastern Ukraine)," said Yatseniuk, a longtime fierce critic of Moscow and a supporter of Ukraine's eventual NATO membership.

• Yatseniuk said Putin would not be content only with Crimea - annexed by Moscow in March - and with Ukraine's mainly Russian-speaking eastern region.

• "His goal is to take all of Ukraine ... Russia is a threat to the global order and to the security of the whole of Europe."

Ukrainian military spokesman Andriy Lysenko told a daily briefing that one soldier and 12 rebels had been killed in the past 24 hours, without specifying where they had died. That would bring the death toll among Ukrainian forces since the start of the ceasefire eight days ago to six.
The rebels have not said how many of their men have died in the same period.

• Government forces still hold Donetsk airport, while the city is in separatist hands.

Putin says Russia has the right to defend its ethnic kin beyond its borders, though Moscow denies arming the rebels and helped broker the current ceasefire with Kiev.
Asked about future NATO membership, a red line for Russia, Yatseniuk said he realized the alliance was not ready now to admit Kiev, but added: "NATO in these particular circumstances is the only vehicle to protect Ukraine."
There is no prospect of the Atlantic alliance admitting Ukraine, a sprawling country of 45 million people between central Europe and Russia, but Kiev has stepped up cooperation with NATO in a range of areas and has pressed member states to sell it weapons to help defeat the separatists.
About 100 Russian trucks arrived today in the war-ravaged eastern city of Luhansk, part of a convoy sent to deliver 1,800 tonnes of humanitarian aid to residents.
It is the second such Russian aid convoy and it passed the border without any major difficulty. The first convoy in August was denounced by Ukraine and its Western allies for crossing the border without Kiev's permission.
The Ukraine conflict has triggered several waves of Western sanctions against Russia, most recently on Friday. The new measures, branded by Putin "a bit strange" in view of the ceasefire, target banks and oil companies.
Russia, which has already introduced bans on a range of US and European food imports, signaled it would respond with further sanctions of its own against Western interests.
Yatseniuk said on Saturday the latest sanctions posed a big threat to the Russian economy.
"It is bluff (by Russia) to say it does not care about the sanctions," he said, noting that Russia relied heavily on its energy sector and some of the sanctions targeted its oil firms.
Yatseniuk defended his government's efforts, despite the conflict, to tackle rampant corruption and overhaul the creaking economy, adding: "It is very hard to attract investors when you have Russian tanks and artillery in your country."
His center-right People's Front party is expected to do well in a parliamentary election on Oct. 26.
The conflict is taking a heavy toll on Ukraine's already battered economy, which is now being supported by a 17 billion dollar loan package from the International Monetary Fund.

• The economy could shrink by as much as 10 percent this year, the head of Ukraine's central bank, Valeria Hontareva, was quoted by Interfax news agency as saying on Saturday, much more than the 6.5 percent decrease previously forecast by the IMF.

Yatseniuk praised a decision on Friday to delay the implementation of a new trade pact with the European Union until the end of 2015. He said it prolonged unilateral trade benefits now enjoyed by Ukrainian firms in the EU while maintaining modest customs duties on European products entering Ukraine.

• Some have seen the decision to postpone the implementation of the deal as a diplomatic victory for Russia, which is opposed to closer economic ties between Kiev and the EU, but Yatseniuk said it would be good for Ukraine's own economy.

"We got a grace period. The EU opened its markets but Ukraine is still protected, so for Ukraine this is not a bad deal," he said.
Deputy Foreign Minister Danylo Lubkivsky submitted his resignation, saying: "(The delay) sends the wrong signal - to the aggressor, to our allies and, above all, to Ukrainian citizens."
 http://www.buenosairesherald.com/article/169658/already-fragile-ceasefire-under-strain-in-east-ukraine
13/9/14
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IMF chief charged with ‘negligence’ over graft case

Case relates to handling of $527-million state payout to disgraced tycoon.... 

IMF chief Christine Lagarde, one of the world's most powerful women, announced Wednesday she had been charged with "negligence" over a multi-million-euro graft case relating to her time as French finance minister.

The shock announcement came a day after she was grilled for more than 15 hours by a special court in Paris that probes ministerial misconduct, the fourth time she has been questioned in a case that has long weighed upon her position as managing director of the International Monetary Fund.

"The investigating commission of the court of justice of the French Republic has decided to place me under formal investigation," she said in exclusive comments to AFP.

In France, being placed under formal investigation is the nearest equivalent to being charged, and happens when an examining magistrate has decided there is a case to be answered.

It does not, however, always lead to a trial.

Asked whether she intended to resign from the IMF, she responded: "No." But her fate now hangs on what the IMF board of directors will decide.

"I have instructed my lawyer to appeal this decision which I consider totally without merit," said Lagarde, who replaced Dominique Strauss-Kahn as IMF chief in 2011 after he became embroiled in a New York sex scandal involving a hotel maid.

"I return back to Washington where I will indeed brief my board," she added.

The case relates to her handling of a 400-million-euro ($527-million) state payout to disgraced French tycoon Bernard Tapie in 2008, which investigating judges suspect may have been doled out in return for his support of ex-president Nicolas Sarkozy in the 2007 election.

The payout to Tapie was connected to a dispute between the businessman and partly state-owned bank Credit Lyonnais over his 1993 sale of sportswear group Adidas.

Tapie claimed Credit Lyonnais had defrauded him by intentionally undervaluing Adidas at the time of the sale and that the state, as the bank's principal shareholder, should compensate him.

Lagarde referred the dispute to a three-member arbitration panel that ruled in favor of Tapie and ordered the payout, which included 45 million euros in moral damages.

Investigating judges are seeking to determine whether the arbitration was a "sham" organized to reward Tapie for his support of Sarkozy.

The IMF chief has always denied having acted on the former president's orders. After a third grilling in March, she had said she "always acted in the interest of the country and in accordance with the law."

"After three years of procedure the only surviving allegation is that through inattention I may have failed to block the arbitration that put an end to the long standing Tapie litigation," Lagarde told AFP Wednesday.

She had until now avoided formal charges that could have forced her to quit as head of the IMF, and had instead been placed under a special witness status that forced her to come back for questioning when asked by the court.

Five people have also been charged in the case, including Stephane Richard, then Lagarde's chief of staff, now boss of telecoms giant Orange.

Questioning has in the past revolved around a signature stamp used in a letter dated from October 2007 that investigators think is crucial in determining who took the decision to resort to an arbitration panel.

Lagarde says she was unaware of the contents of the letter and has told judges it was stamped with her signature in her absence.

In France, those found guilty of "negligence" can be sentenced to a year in prison and a 15,000-euro fine.
Sources: AFP - globaltimes.cn
27-28/8/14

US Congress Votes to Aid Ukraine, Penalize Russia. - The same day that the IMF pledged to provide Ukraine with up to $18 billion in loans

The U.S. Congress has sent a strong message to Russia for its annexation of Crimea by passing measures that give aid to Ukraine and penalize Moscow.

Lawmakers in the House and the Senate overwhelmingly approved separate measures on Thursday.

Both bills include $1 billion in loan guarantees to Ukraine and penalize Russia for its actions in Crimea.

Lawmakers in both chambers will have to resolve differences on other provisions before sending a final bill to President Barack Obama.

Democratic Congressman Elliot Engel said if the United States continues to work with Ukraine and help turn the country "Westward," then Russian President Vladimir Putin "will have lost."

He said Putin may have a "land grab" in Crimea, but would lose the rest of Ukraine.

• The House and Senate votes took place on the same day that the International Monetary Fund pledged to provide Ukraine with up to $18 billion in loans.

But, the IMF says Ukraine, in exchange, must agree to enact tough economic reforms.
[voanews.com]
27/3/14

Ukraine to hike gas rates by 50% for IMF loan. -The IMF programme's approval would set in motion the release of further assistance from both Washington and the European Union.

Ukraine agreed on Wednesday to quickly hike domestic gas prices by as much as 50 percent to meet a key loan condition set by the International Monetary Fund (IMF) for the crisis-hit ex-Soviet state.The new Western-backed government in Kiev is seeking $15-20 billion (11-14.5 billion euros) in IMF assistance in order to balance its books and meet a series of foreign loan repayments.An IMF team met with Prime Minister Arseniy Yatsenyuk in Kiev on Wednesday for what Ukrainian officials hoped would be a final round of talks before the package is approved in Washington next month.
The Fund has made an immediate end to Ukraine's costly gas subsidies one of its prime conditions for the programme's approval.

It also wants the central bank to stop propping up the Ukrainian currency and for the government to cut down on corruption and red tape.A top official at Ukraine's Naftogaz state energy company said Kiev was willing to raise the price households pay for natural gas by 50 per cent as of May 1.Naftogaz budget and planning director Yury Kolbushkin added that rates for district heating companies would go up by 40 per cent on July 1.Kolbushkin indicated that these prices would increase still further in the coming years."We will publish a document that sets a schedule for rate increases through 2018," Ukrainian media quoted Kolbushkin as saying.Ukraine's central bank has already limited its currency interventions -- a decision that has seen the hryvnia lose 26.4 per cent of its value against the dollar since the start of the year.

• The IMF programme's approval would set in motion the release of further assistance from both Washington and the European Union.

Yatsenyuk said he expected EU officials to send 1.6 billion euros ($2.2 billion) to Kiev within two months of its approval.The United States has also pledged $1 billion (720 million euros) in loan guarantees while Japan has promised up to $1.5 billion (1.1 billion euros)..........http://www.ellanodikis.net/2014/03/ukraine-to-hike-gas-rates-by-50-for-imf.html
26/3/14

EU is aware that Ukrainian economy is in really terrible shape. - analyst

The European Commission has proposed another 1 billion euro for Kiev, which will come as a part of the 11 billion euro package agreed earlier in March. A rapidly worsening balance-of-payments and weak fiscal situation in the wake of the latest developments in Ukraine pushed the EU to consider a new perk. The Voice of Russia talked to Lilit Gevorgyan is a Russia/CIS country analyst with IHS Global Insight and Jane's Information Group.

How can this financial aid change the situation in Ukraine? In your opinion, will it somehow help to stabilize the country’s economy?

If we look at what the Ukrainian economy is really suffering from and what it needs at the moment, it basically needs to finance its current account deficit and its budget deficit. And indeed, with the IMF and the EU bailout these goals can be achieved.

But there is another side to this story and that is the impact on the economic performance of the bailout program. And that in the short-term could be negative because what we are really looking into is a range of austerity measures that Ukraine would have to implement.

And that means that private consumption that has been the major contributor to the Ukrainian economic performance in the past quarters, it will weaken and, possibly, contract having an overall negative impact on the GDP.

• Does it mean that Ukraine will be more dependent on the EU? Because any additional aid to Ukraine from the European leaders automatically increases the country’s debt. And does that mean that Ukraine will have to follow the EU’s line of policy on the international stage?

• I don’t think that the EU bailout money will come with political strings attached. I believe that the European block is aware that the Ukrainian economy is in a really terrible shape and is facing serious problems with its external financing need.

And what the EU and the IMF are trying to do is to pull together their resources to help. To first of all stabilize the economic situation, help Ukraine to meet its debt obligations so that the country avoids a default and also help them to rebalance the economy, which is the most painful part that Ukraine has to go through, unfortunately.

When it comes to expecting Ukraine to behave in a certain way in foreign policy, I don’t think that that is necessarily the case.

How can the alliance between EU and Ukraine affect the Russian-Ukrainian economic ties?

I think from Russia’s economic and commercial perspective, it is quite interested in seeing the Ukrainian economy stabilizing. Russia is the major trading partner for Ukraine. It is the major investor in the country. There are vast business interests of the Russian businesses in Ukraine.

So, obviously, when the Ukrainian economy is underperforming or failing, it is having an impact on Russia as well. If the EU is helping the Ukrainian economy to stabilize, I don’t see why it will have a negative impact on the Ukrainian-Russian relations.

What are your forecasts for the further development of the economic situation in Ukraine?

As I said earlier, I think what we are currently seeing is the IMF continuing the negotiations. Clearly, these are difficult negotiations, because the Ukrainian Government is aware that the austerity measures that they have to implement will have a significant impact on their popularity and overall stability of the Government.

The IMF and the EU have made it clear that they will start seriously implementing the aid and rolling out a bailout only after the May’s presidential elections. They need some political stability and, secondly, they need seriously commitments by the new Ukrainian authorities that they will stick to these austerity measures, because, effectively, what they are asking for is increasing gas prices, cutting the public spending, trimming pension payouts and also maintaining flexible exchange rate for hryvnia.

All of these are going to take toll on households. And once the Ukrainians are going to experience a serious drop in their disposable income, this will naturally feed into an already tense situation in the country, particularly in the eastern regions of the country, where people could say that they didn’t even agree to a Government change.

So, it is a really toxic combination of austerity measures that have to be implemented to really rebalance the economy and keep Ukraine away from default and political instability. I think Ukraine is quite unfortunate in the sense that while this is a pill that they have to swallow because it is important for them, it is a very bitter pill and it could turn poisonous politically.

So, we are looking into a protracted period of political instability and economic instability in Ukraine for the next year or year and a half, at least. And also, depending on how they will build their relations with Russia, it will also have an impact on their economy. If there is a continued antagonism in Ukrainian-Russian relations, this could only lead to further difficulties with trade with Russia – potential trade restrictions, potential increasing gas prices and so forth. All of this could make Ukraine even worse-performing than we’ve seen before.

So, there are lots of challenges that the Ukrainian Government and the new authorities have to deal with. And another drawback for them is that it is a coalition Government that has a strong nationalist element, who are populists and quite possibly in the future they could turn their back the Government that is implementing austerity measures, and lead to more political instability with Ukraine experiencing the fate of many countries that have governments that are grouped with instability.

So, the picture doesn’t really look that great, to be honest. But the Ukrainian Government has face up to the mismanagement of the previous Government in the economy. And they really have to be brave to face these challenges and push ahead with them no matter what political cost is for their careers.
Read more: http://voiceofrussia.com/news/2014_03_21/EU-is-aware-that-Ukrainian-economy-is-in-really-terrible-shape-analyst-9389/
21/3/14
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• Ukraine: ce que prépare pour les travailleurs le régime soutenu par l’Occident

Ukraine and the Council of Europe have agreed joint actions to block Russia's aggression in Crimea, Ukraine's acting President Oleksandr Turchynov says.

Ukraine's acting President and Parliament Speaker Oleksandr Turchynov has met with the Secretary General of the Council of Europe Thorbjorn Jagland and Austrian Foreign Minister Sebastian Kurz to discuss and exchange views on the latest developments in Ukraine.
Joint actions with the Council of Europe have been agreed and an active dialogue about cooperation with the IMF is taking place, a statement from Turchynov said.

In the statement Turchynov added that Russia's aggression in Crimea is blocking Ukraine from starting the process of re-establishing its stability and reminded Russia that the international community would not leave Ukraine alone as under the Budapest Memorandum the US and Britain are guarantor states for the territorial integrity and sovereignty of Ukraine.
“There is an attempt to misinform Russian citizens and citizens of other countries on the issues related to the legitimacy of the Ukrainian authorities, events in Crimea and the false referendum that is being organized, or better to say falsified,”  Turchynov told a press briefing after the meeting.

• For his part, the Secretary General praised the recent reforms and progress towards a democratic Ukraine, expressing the council’s full support for the interim government.

• Jagland said they had come to Kiev to show their support for the territorial integrity of the crisis-racked country, adding that the Council of Europe is ready to send observers to the Crimea region.

Meanwhile, Ukrainian Prime Minister Arseny Yatseniuk told a press conference that he believed Russia sought to "undermine the foundations of global security and revise the outcome of World War II.''
Yatseniuk stressed that it is not up to the Russian tanks or military vehicles but to the Ukrainian parliament, Verkhovna Rada, and the people of Crimea to determine the fate of the region.
The Romanian Foreign Minister, Titus Corlatean, has also held a series of talks in Kiev with Ukraine's interim President Oleksandr Turchynov, Prime Minister Arseny Yatsenyuk and Foreign Minister Andrey Deshitsa.
 http://www.aa.com.tr/en/headline/299239--ukraine-and-council-of-europe-meet-in-kiev
10/3/14
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• Ukraine Making sense of sanctions

• White House: Obama calls 6 world leaders about Ukraine crisis 

• Russia Warns US Sanctions Would Have Boomerang Effect

• Russia slams NATO’s ‘cold war’ standards / NATO chief says alliance suspends meetings, military mission with Russia

Kiev has no money to pay off debts, financial crisis to follow - Ukraine's ex-minister

Ukraine’s new government is saying that it would try to do its best to stabilize the situation in the country. We have got in touch with Victor Suslov, once Ukraine’s Minister of Economy and now Ukraine’s representative in the Eurasian Economic Commission.
Ukraine’s new Prime Minister Arseny Yatsenyuk says that now, Ukrainians would have to toughly economize for some time. Meanwhile, the head of Ukraine’s National Bank Stepan Kubiv has said that Ukraine has enough money to pay back its foreign debts.
News has also appeared that European creditors have agreed to help Ukraine with money for it to restore its gas transport system. What is the real financial situation in Ukraine?

I don’t think that Ukraine really has money to pay back its foreign debts. Today, Ukraine’s National Bank ordered the country’s banks not to give currency deposits to individuals. Yesterday, the rate of Ukraine’s national currency, the grivna, to the dollar reached the point of 11.4 grivnas for 1 dollar, although only a few days ago, it was 8 grivnas for 1 dollar. All these facts are evidence of a serious financial crisis in Ukraine. The US and the EU have promised some financial aid to Ukraine, but in fact a very small one. However, the International Monetary Fund says it may give Ukraine a loan of up to $ 15 bln, but for this, Ukraine should fulfill some demands of the IMF, such as increasing the population’s pay for communal services and the like. At present, there are only from 3 to 4 mln grivnas in the Ukraine’s treasury, which is practically no money. The National Bank has already started emissions of big sums, but this is done for refinancing commercial banks. This will most likely lead to devaluation of the grivna and high inflation.

The new government of Ukraine was formed only yesterday but has already dubbed itself "a government of self-killers" for its unpopular measures. It is expected that this government would exist till the presidential elections, which are due to be held on May 25.

To stabilize the financial situation, the government should, first of all, stabilize the political situation, which is currently very aggravated, especially in the Crimea and some other regions.

Russia’s authorities have not recognized the new Ukrainian government. Russia has already withdrawn its ambassador from Ukraine.

• Many residents of the Crimean Peninsula want their region to become independent from the rest of Ukraine. Do you think that the new Ukrainian government may agree to that?

• I find it very unlikely that the new government may allow the residents of Crimea even to hold a referendum on whether their region should get at least a little more autonomy from the rest of Ukraine, to say nothing of a total separation. The government has already clearly said that in several official statements.

 http://voiceofrussia.com/2014_02_28/Kiev-has-no-money-to-pay-off-debts-financial-crisis-to-follow-Ukraines-ex-minister-1999/
28/2/14
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Related:

• UN chief calls on Ukrainians to find peaceful way forward amid current turmoil

A redundant political class in Ireland

by Vincent Cooper*
Politics is dead in the Irish Republic. The Irish parliament, the Dail, is now little more than a rubber stamp for the Troika, the generic name for the European Central Bank, the International Monetary Fund, and the European Union, the three powers to which the country is in hock.
Things are bad. Ireland’s debt to GDP ratio is set to reach 122 percent in 2013, above the 120 percent threshold the IMF considers unsustainable. The total debt of the country, according to an Irish Times report, is €192 billion, four times what it was in 2007, with a projected need to borrow a further €34 billion before 2015.

The fact is that Ireland is technically cash-flow insolvent. The country simply doesn’t have the revenue to fund the day to day running of the state. And the projections are for continued borrowing for years to come, with a hope – it can be little more than a hope –that somehow, miraculously, the economy will return to growth.
But with little or no sign of that desperately needed economic growth, emigration of graduates and the unemployed is about the only welfare relief the country has – and at a terrible economic and demographic cost to the future of the state.
Over the past year, 87,000 people left Ireland for countries far afield such as Australia, Canada, and the UK, countries that are now reaping the benefits of Ireland’s expensive-to-educate graduates and tradesmen.
Yet fascinatingly, as those 87,000 people leave the country to find work abroad, the number of immigrants entering the country was steady at 52,700, with 12,400 of these from non-EU countries.
This glaring anomaly of educated and skilled people leaving because of unemployment, being replaced by typically low-skilled immigrants, is not mentioned by the political class. It is mentioned on the streets of Dublin, often in great anger, but no politician will touch it. Political correctness along with the Troika now rule the Irish state.
So even in the midst of financial Armageddon, the numbers entering the country continue at Celtic Tiger levels. Ireland’s welfare entitlements are still very generous, and on any common-sense view of human nature would attract takers. And that seems to be what’s happening.
In north Dublin, for example, over half the applicants for social housing are from immigrants, with over 43 percent of the total being lone parents. While waiting to be housed, all social housing applicants receive rent allowance, with the result that over half of all residential rents in the country are now paid for by the state, or more accurately by the few remaining tax payers.
This socialist policy of state housing support is a lucrative business. One Dublin landlord received €620,000 last year in rent subsidies. On the back of socialist welfare policies, landlords are building wealthy property portfolios - all paid for by the Irish tax payer.
One local councillor from north Dublin broke the rigidly enforced political correctness by talking about ‘welfare tourism’, but quickly back-pedalled and qualified his remark by repeating the well established liberal mantra of how Ireland ‘needs immigrants.’  
So what, if anything, is the Irish government doing about this unsustainable mess, apart from drawing lucrative salaries and gold-plated pensions? The Taoiseach (Prime Minister) Enda Kenny is paid more than David Cameron.
Economically the Troika is in charge, and the recent austerity budget - which imposed a swingeing property tax on householders, many of whom are in negative equity - was designed largely to facilitate repaying the country’s debt. The government doesn’t have much option here. It simply has to do what it is told by the Brussels apparatchiks.
The Irish political class, in effect, are reduced to being managers working for the Troika, and there’s virtually no serious political debate in the country about any alternative, such as leaving the euro and devaluing. All political parties, both left and right, give absolute and unconditional support to the euro project.
As Nigel Farage said on Irish radio a few months ago, Irish politicians are "the good boys of Europe. Brussels says jump and the Irish say how high."
Such Brussels worship is unique in the EU. In the UK for example, as in France and other EU states, there is some degree of rational opposition to the EU and to the euro single currency, and these issues often split along left and right lines. There’s no such split in the Irish body politic.
But there is one, highly contentious issue where the Irish political class has dug in and taken a stand - Irish corporation tax rate.
Ireland has one of the lowest corporation tax rates in the EU, at 12.5 percent. This makes the Irish Republic a major corporate tax haven, competing with places such as the Cayman Islands. Many large corporations, including Mit Romney’s Bain Capital Private Equity, use Ireland as a corporate base for tax purposes.
There is unanimous support for this beggar-thy-neighbour policy right across the Irish political spectrum - and for good reason. Thanks to its much resented tax haven status, Ireland pulls in large tax revenues that account for an Irish share of global profits hugely disproportionate to the size of the economy.
But the country risks becoming a pariah state over the issue. Many countries in the EU, particularly the French, are furious at Ireland’s tax haven status. They claim companies such as Google use transfer pricing - routing profits from high tax to low tax jurisdictions - that benefits Ireland and takes from the French exchequer.
With such fierce opposition, it’s difficult to see how the Irish can, in the long run, hold out against French demands for change. So even on the issue of setting its own corporation tax rate, it looks like the Irish political class will eventually have to concede to the power of Brussels. When that happens, along with closer political union, many argue there will be little need for an independent Irish parliament.
Vincent Cooper is a freelance writer
 .thecommentator.com
3/1/13