Monday, September 29, 2014

Transcarpathia and Transnistria SitRep 21 Sep - 27 Sep

by "Y"



The ad hoc local collections of funds and material for Transcarpathian police and military units continues. The local football league raised 7647 UAH, and a group of students raised sufficient for 200 pairs insulated rubber boots. Modern personal protection equipment funded through donations was supplied to a group of Transcarpathian police officers due to head to the east. Hubal, the recently appointed Head of the Transcarpathian Regional State Authority has stated that he wants to see strict accounting for the dissemination of the donations to ensure that the funds went to right people.

The 1.5% war tax has raised 1.3 million UAH locally. It was transferred to the budgets in August and September.

Citizens of the Hungarian city twinned with Uzhgorod donated 2 million HUF (~ $8100) to be given to 50 ethnic Hungarian families whose family members had been sent to the front.

The volunteer support group for the Carpathian Sich has delivered about 10 tons of aid per week to the front during September. This aid is for the benefit of Svoboda volunteers in the 128th Mountain Infantry Brigade, and those in the 24th, 25th and 95th Brigades.

130 soldiers of the Transcarpathian Defense Battalion have been sent to the front. Most of the Battalion remains in Transcarpathia, guarding strategically important posts. There are plans to increase the battalion manpower by 20%, presumably through further mobilisations. These mobilisations have proved increasingly ineffective, so one plan is to send existing military commissars to the front. The posts freed would then be taken by those who have recovered after being injured at the front.

Eight Transcarpathian citizens, including two ethnic Hungarians were reported killed. There was no information about when these deaths occurred and whether they are recent additions to earlier totals. The death and casualty figures released are very confusing as authors do not state time period or locality to which they apply. It is possible that the same cases are reported at widely different times. The exact figures probably will not be known until the Kiev government releases formal reports. They will have a strong incentive to under-report to minimise the scale of losses.

Compensation of 100,000 UAH (~ $7400) has been offered to 21 families of those injured in the fighting. In addition, land parcels are made available for victims or their surviving families. To date, 174 families have applied for such land, with 74 of the applications fulfilled. The land parcels are free for families whose relatives died in the fighting.

Following the cease fire, one Transcarpathian PoW was released this week. He noted that he had spent time clearing up the destroyed buildings in the area where he was held. It is reported that just one more Transcarpathian remains in the east as a PoW.


The major economic concern for the country is the collapse of the currency. Poroshenko has declared his intent to stop the slide and restrict currency flight.The driving factor is the state loans that have to be paid back in foreign currency ($ or Euro). The net foreign currency outflow is expected to be ~ $250 million for September.

The exchange rate has reached 14.90 UAH per US dollar against the Ukrainian government target of 12.95 UAH / $. Legislation has been introduced to restrict the foreign currency exchange limit for customers at retail banks to 3000 UAH (~ $200) daily. Other aspects include a tightening of the issue of foreign currency, and a temporary hold on withdrawal of dividends and money through sale of securities. Government Bonds remain an exception to these rules.

The most recent economic factor directly affecting ordinary people is the 10% increase in rail journey tickets from 1 October 2014.


The Ukrainian attack on the east has scored an own goal. The loss of coal from the east has reduced the amount of electricity that can be generated, limiting the space capacity available for export. This has an obvious knock-on effect on the already poor economic situation.

Ukraine claims to have received about 540 million cubic metres (cu m) of gas through the reverse flow pipeline into Transcarpathia since the start of September. The price quoted is $320-330 per thousand cu m. The average capacity for this period is about 25 million cu m per day, against a stated maximum capacity of 27 million cu m per day. Slovakia states that this maximum capacity will only be achievable from March 2015. Given the current quoted average is very close to the stated maximum which is not yet available, the supply figures should be treated with caution.

The Ukraine gas supply organisation has made a proposal that should control gas usage. It suggests there should be a single price for domestic, commercial and industrial use.. This would cause the price of gas for domestic use to rise to four times the current level. This is obviously a political time bomb with the election looming.

Russia's reaction to the reverse flow form Slovakia and Hungary has been to not that the current contracts do not allow for re-export of gas. After a meeting between Hungarian representatives and the head of Gazprom, Hungary has stopped the reverse flow through Transcarpathia for 'technical reasons'. Günther Oettinger, the Deputy Chairman of the European Commission has stated where Gazprom has no right to make operational decisions, reverse flow is possible. The main thing is not to violate conditions of the contract. He also notes it is essential that there be a trouble-free reverse gas flow for Ukraine.

As a side note, Hungary and Austria have stated that they have abandoned the South Stream solution, and tenders for pipeline construction will be sought.


The latest figures suggest that about 2000-3000 people aged 18-25 should be recruited by the current phase of mobilisation in Transcarpathia. These figures include an estimated 300-400 ethnic Hungarians.


On the 21st, Baloha claimed that the Lustration (= purge) law already agreed was going to be rewritten to avoid action against what he claimed to be the most corrupt offices - the police and the security forces. On the 23rd, Vasyl Hubal, the new head of the Regional State Authority asked that all the civil servants and law enforcement officers who had served in the Yanukovich period to voluntarily resign. The affected leaders of these organisations should resign immediately. Critics rightly claimed that this seemed to be based on politics and not on lack of professionalism.

The Lustration Law was passed on the 25th awaiting signature by Poroshenko. It clauses state that an high ranking official from the Yanukovich period be excluded from service for 10 years. All areas of government are affected, including the military. People who worked for less than a year are excluded, as are those who went to the Maidan or quit on their own. Baloha proposed a lustration committee be set up comprising members of the public and deputies of local councils.

Baloha has made an intriguing claim about Crimea. He states that Crimea will become a real island for some time, with no communications with Russia, no water, gas, electricity or food supply. This will lead Putin to attempt to create a land corridor to Crimea. In order for Ukraine to forestall this, he said that negotiations should be started with the aim of providing services at average Ukraine prices and guarantees that food will be allowed through in return for the cessation of alleged repression of Tartars and Ukrainians in Crimea and guarantees involving the Russian Federation, the EU and the US that there will be no invasion from Crimea. Given that there is no repression and the RF has no desire to invade, this sounds like some kind of 'nice peninsula you got there, shame if something were to happen to it' scam.

The US is preparing to assist the election process, specifically to ensure the elections are honest. The Media Foundation of the US Embassy in Ukraine runs local roundtables for this purpose. The contributors to the roundtable are Government and NGO representatives from Kiev. The unit produces a newsletter outlining problems, such as five candidates with the same surname (Kovacs) in one constituency. Independent reporters suggest that this seems to be a phantom problem rather than evidence of collusion.

Whatever happens, the election promises to be very intense and very confusing, with lots of dirt thrown around. For example, there are allegations that the Baloha group is somehow connected to Putin / Medvedev. Ratushnyak, one opponent of the Baloha brothers clan, claims the brothers are preparing provocations against him and has requested protection from Poroshenko. The various parties are laying out their rules for cooperation. The head of the UDAR party declares there will no cooperation with Baloha, even though both are running as part of the Poroshenko bloc. The Popular Front party claims to represent real people rather than oligarchs. The National Front party candidate has been dismissed from the party for unknown reasons.


Ukrainians in Europe have rallied in support of Ukraine. One idea is a crowd-sourced set of T-shirts, with various designs shown on the website. Given the true state of Ukrainian political dialog, I think this particular design is most appropriate.

Yatsenyuk has been spouting about creating a wall along the border with Russia at enormous cost. Baloha correctly notes that Ukraine is not a small country like Israel, and it can't possibly control its borders in the same way. He states that the idea of constructing this wall is madness and the only way to ensure a strong country is through the willpower of the people and the leaders of the country. The latter point is probably a sly dig at the abilities of the current leadership.

In an act of irony, the residents of Mukachevo recently held celebrations at a memorial to the heroes and partisans of the Second World War who fought against fascism.

On 24 September, Moscow issued a statement requesting international investigation into mass graves found in areas occupied by Ukrainian troops and militia. By an amazing coincidence, on the 26th, reports appeared of three mass graves in the Slavyansk area, which has been in Ukrainian hands since early July. The investigation carried claims the individuals died early to mid June, when the area was in the hands of the separatists. Apparently, 12 of the individuals have been identified by name. Given these mass graves were found in three specific cemeteries, the most likely explanation is that these are Ukrainian soldiers who died in the fighting. The timing of this news release suggests an intent to muddy the waters in relation to the mass graves further south.


The representative of the ethnic Hungarian group held a closed meeting to decide on their position. They have given up trying to get a clear Hungarian constituency and have opted to join the Petro Poroshenko bloc as the only remaining legal chance for local representation. None of the candidates for the Yatsenyuk block are local to Transcarpathia.

Transnistria (aka PMR)


Gregor Petrenko, a member of the Moldovan government paid a visit to Lugansk and the surrounding area in order to provide first hand background information for the Assembly of the Council of Europe. He stated that to describe it is an understatement to describe the situation there as a humanitarian disaster. He will present his findings to a PACE meeting in Strasbourg. He notes that the Kiev regime has repeated the mistakes of Moldovan government in attempting to use military force to resolve a political conflict.


The economic blockade by Moldova and Ukraine continues to affect the economy. In July, the government reduced the working week for state enterprises and deferred payment of wages. The President has issued a statement that arrears should be paid. The State water concern has accumulated massive debts through unpaid bills. The main problem area is the reluctance of people in agricultural areas to use water meters.

The Government has issued bonds for $13.5 million. These are set for 7, 14 and 31 days maturity, with per annum interest rates of 2%, 2.25% and 2.75% respectively.

Moldova resorts to unilateral blocking of export certificates for PMR agricultural produce. A complaint has been registered with the Russian Ambassador to Moldova.

The Government has ambitions to convert a disused military airfield near Tiraspol to civil use. It has a number of investors lined and has produced internal documents relating to the mandatory regulatory position for civil aviation. The main problem id the political one relating to the status of the PMR.

A second major project relates to the creation of a direct route between Tiraspol, the capital of PMR and Ribnita, a major town in the north. This route affects about 6.3 ha of land owned by Moldovan citizens, so there is the problem of compensation for any loss of use.


Bilateral discussions between Russia and Moldova have taken place regarding the gas supply problem. There will be no reverse flow from Romania until 2015 at the earliest. There was no consensus over the status of the next contract - should it be considered a new contract or a renewal of the old contract. The current price offered to Moldova is $374 per thousand cu m. They are looking for a $3-5 reduction in price. In view of the reverse flow problem, the Moldovan government is looking to allocate a budget of up to 2.1 billion lei ($146 million) to buy oil to cover any shortfall over winter.


There is no explicit mobilisation in the PMR. A standard wound of quarterly recruitment for compulsory military service is due for the period 1 October to 31 December. Males aged 18-27 are eligible for military service, and the upper aged is extended to 30 for internal and border guard units. At the same time, those who have completed their conscription period will be released from service.


On 25th September, the PMR government called an emergency meeting of the JCC (the 5+2 body overseeing normalisation of the status of PMR). Such emergency meetings have to take place within 24 hours of their being called. The PMR request was based on systematic actions by Moldova to undermine progress at the point of approval of the agenda for a normal meeting. The actual troop levels in the peace-keeping force were mentioned - 402 from Russia, 492 from PMR, 355 from Moldova along with 10 Ukrainian observers.

As if on cue, on 26th September, Moldova issued a demand for the removal of the Russian peace keeping force, to be replaced by an international civil mission. It also stated that it had no plans to join NATO.

The PMR government continues trying to establish cooperation agreements with other states. Following the signing in July of a Memorandum of Cooperation on education issues, the PMR representatives met with a delegation from Russia to discuss education issues. The President of PMR met with a delegation from Germany to initiate bilateral cooperation over humanitarian issues and to update the German delegates on the status of position with Moldova. The President raised the issue of adverse unilateral actions taken by Moldova, e.g. the selective withholding of export certificates for PMR goods.

Along with Moldova, the PMR is modernising its international border crossing points, replacing old manual schemes with modern document processing facilities. This is a costly business. Moldova has outside financial assistance to help, while PMR has to fund the changes itself.

A one-day conference was held on 26 September in Chisinau. The subject of the conference was confidence building on both sides of the River Nistria. Of the 17 main speakers, two were from PMR and 4 were from Moldova. The rest were from the EU or European NGOs. It is possible that the large number of third party speakers will produce some practical ideas, but I suspect wider political influences will preclude real progress.


Russian reverse sanctions against Moldova have affected the PMR economy as exporters need to gain Moldovan approval prior to export. Following inspections, the Russian inspection agency has removed export restrictions on two PMR canning factories. One of these has a $5 million contract to supply canned food to Russia.