Valeria Hontareva Speech at JCE Conference (April 24th, 2015)

The VoxUkraine Brief. Last 2 Weeks of April: A Big Academic-Policy Symposium on Ukraine, Slowly Burning Conflict in Donbas, Continued Debt Negotiations

#VoxUkraine weekly selection of best articles on Ukraine.

by Tymofiy Mylovanov and Oleksandr Zholud, VoxUkraine Editorial Board

produced by Kseniya Alekankina


The main event for VoxUkraine last week was definitely the Symposium “Ukraine — Escaping from its Post-Soviet Legacy” — the highest profile conference to date organized with the help of our team. We encourage all interested to check videos and/or read speeches made by participants as they appear on our site. Currently we have transcriptions of John Herbst (US Ambassador to Ukraine 2003–2006) and Valeria Hontareva (the governor of the National Bank of Ukraine).

There were two more important conferences. On April 27 President Poroshenko presided over Ukraine-EU summit in Kyiv, but both sides appeared dissatisfied with the results: EU diplomats called for more active anti-corruption and reform measures, while Ukrainian hoped for additional inflow of funds from Europe. On April 28 there was the long awaited International support for Ukraine conference, which has been previously referred to as ‘donor conference’ but no notable donor support was offered there. The low pace of reforms is also observed by the low IMoRe index, as the latest release suggests.

During the second week after orthodox Easter, conflict in Donbas remains slowly burning; both sides accuse each other in violation of Minsk agreements while shelling continues. There are warnings that new escalation is likely in the near future. NATO’s Secretary-General Jens Stoltenberg said that there is a sizeable Russian military buildup on the border with Ukraine and Russia continues to supply weapons and ammunition to Donbas. They set up air-defense system as well as train combatants, according to the statement of State Department spokeswoman Marie Harf.

In order to boost the quality of Ukrainian troops, 300 U.S. Paratroopers arrived in Ukraine on April 17. They will train Ukrainian National Guard regiments in Western Ukraine, over a thousand kilometers from the frontlines. However, Russians already accused the US in direct involvement in the conflict zone.

One of the important local themes of this week were assassinations of two pro-Russian persons in Kyiv: former MP of the Party of Regions Oleg Kalashnikov and writer Oles Buzyna, known chiefly for his controversial portrayal of poet Taras Shevchenko and other provocations. Both killings, which occurred on April 15 and 16 assumed to be linked with political views of the killed. It should be noted that both victims had no high media profiles in Ukraine thus it hardly looks like a hit to silence opponents of the current administration for there are many way more vocal and influential oppositionists. At the same time most Western authors pursue a political trail — from Amnesty International to Zeit and Vice.

Meanwhile in Kyiv there were protests of miners. Local media takes generally sceptic view on these protests because the majority of miners are from private mines owned by DTEK (belongs to Rinat Akhmetov), the protest is viewed as a struggle between the oligarch who was close to Yanukovych and current authorities. Alas, not a lot of western media reported on it.

The negotiations on Ukrainian public foreign debt continue. As the Minister of Finance noted during her speech on the Symposium, it is very important not only to push debt payments a few years in the future but reschedule them, so that in any given year they weren’t an insurmountable burden for the budget. Thus both later payments and haircuts are expected, and creditors currently agree only to term extension.

“Current market pricing assigns a high probability that bondholders hold the upper hand in the bondholder talks, and Ukraine and the IMF will give in to their demands to avoid a debt default,” Alina Slyusarchuk, a London-based economist at Morgan Stanle

Not only sovereign debt should be renegotiated but external debts of state-owned companies such as the State Export-Import Bank of Ukraine, which Eurobonds are due soon. Last week their prices surged, signaling positive expectations of investors.

State Export-Import Bank of Ukraine’s $750 million of notes due next week rose 8.92 cents to 73.67 cents on the dollar at 6:01 p.m. in Kiev, the highest level since Jan. 20. That drove the premium above sovereign notes due in September to a record 23 cents.

Also on VoxUkraine

The Index is calculated once in two weeks based on an expert survey. The IMoRe value for the 8th monitoring period (April 6th — 19th, 2015) totaled +0.9 points out of the possible range from -5.0 to +5.0 points. The pace of reform decelerated notably. While changes in governance, anti-corruption and deregulation had a positive impact on Index value, absence of significant events in Public Finance and Energy Independence areas slowed down the index pace.

Eric Livny, Director at International School of Economics and ISET Policy Institute, discusses in his column why Georgia has not been able to attract a lot of foreign investment despite notably improving its ranking in ease-of-doing business and what Ukraine may learn from Georgian lessons.

Our member of VoxUkraine Law Kateryna Dronova posted a column regarding the recently approved by the Parliament (and yet to be signed or vetoed by the president) laws that ban Communist and Nazi propaganda, where she compares the ban with similar restrictions in other countries and points on the broadness of the ban, which can be contested in the European Court of Human Rights (ECHR).

Have a great weekend!

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