Tuesday, November 25, 2014

SitRep Transcarpathia, Transnistria and Gagauzia 17 Nov - 23 Nov (NEW FORMAT!)

SitRep Transcarpathia, Transnistria and Gagauzia 17 Nov - 23 Nov

A perambulation around the periphery of Ukraine, looking at local and regional viewpoints. The media coverage varies from relatively neutral to rabidly nationalist.

Note: some urls in the links are prefixed with 'z5h64q92x9.net/tr-url/ru-en.en/' . This form provides the reader with a Yandex translated version of the source. The original article can be reached by removing this prefix.

Kharkov has experienced numerous unexplained explosions may reflect actions by partisans. A recent status map shows the extent of purported partisan activity throughout Donbass. The connection from Kharkov to the border is interesting. Is there another voentorg in action?

Estonia - the national airline has lost 6.4 million euro as a result of the Ukraine crisis. The route Tallinin - Kiev has been severely disrupted.

Latvia seems to be feeling left out. It has claimed a Russian submarine passed about 27 miles from its territorial waters. This is seriously pathetic.

Galicia - low level discontent was exhibited at a recent football match. One of the teams, Shakhtar Donetsk, refused to wear T-shirts commemorating ATO forces.

Poland reportedly buying 40 AGM-158B JASSM cruise missiles from the US for around $250 million, with 50 % discount. These missiles have a range of 960 km, and an accuracy of around three meters. Even if you buy into the Polish missile defence is aimed at Iran and North Korea scam, these missiles certainly are not defensive and could reach Moscow.

Slovakia will continue to supply Ukraine with gas via reverse flow through the Vojny-Uzhgorod pipeline. This pipeline can supply about 30 million cubic metres gas per day from the Slovakian energy company Eustream. Slovakia claims to be able to maintain this despite a 50% decline in gas supplied to Slovakia from Russia. The head of the Ukraine gas company NaftoGaz claims this way Ukraine can completely avoid Russia as a gas supplier. He seems to be relying on ignorance of readers as to where Slovakia obtains its gas. The Ukraine gas company will defer any decision to buy further gas from Russia until 1 December

Czech Republic - Milos Zeman, the Head of State has stated that it is pointless to support Ukraine in the midst of a civil war. He also is a critic of EU sanctions against Russia, stating that he is not the only one leader with concerns. The leaders of Slovakia, Hungary, and Austria hold similar views. Sanctions are a loss-loss policy. He has invited the leaders of the four major WWII western powers to a ceremony commemorating the liberation of AUschwitz. Predictably some poodles have whined at the mention of Putin, but Zeman points out the camp was liberated by the Red Army. Equally predictably, there have been sign of a colour-coordinated response suggesting the US are hinting at regime change. Look out for red cards in the Czech Republic.

Transcarpathian military forces continue the dance of shuttling to and from the front in the east. In the last week, 27 volunteers have returned, with permission from Kiev, for two weeks leave. A further 36 officers from the Uzhgorod battalion of the National Guard have returned from two months duty at block posts in the Debaltsevo area. Small numbers of casualties are reported. Three were reported killed and two severely wounded in action around Debaltsevo. Initially these were described as members of the local 128th Mountain Infantry Brigade, but the identification was corrected to the 79th Brigade. A few days later, two troops from the 128th were reported killed after serving four months duty near Debaltsevo. One ATO soldier and nine were wounded in action at Donetsk airport.

The Transcarpathian press recently included a very surprising item - an interview with a man from the Lugansk region who had moved west with his family. The surprising thing was the fairly accurate representation of the situation, not jingoistic like all previous interviews with refugees. He notes that locals shun him when he mentions where he is from and asks why are Ukrainians killing Ukrainians.

This was counteracted to some extent by the appearance of an odious piece of propaganda. A Canadian outfit, Nordic Filmworks, has produced a slick propaganda piece linked to a StandWithUkr hash-tag. This seems to reflect an Israeli hasbara theme StandWithUs.

Prisoner exchanges recently resulted in the release of 17 Ukrainian prisoners of war. Transcarpathian police officers returned from the front claim to have arrested 100 separatists, 50 of whom were exchanged for prisoners. The charges justifying arrest are not specified, so maybe it was a quota in order to have someone to exchange.

Biden The US Vice President made a visit to Ukraine this week. Little was reported about the subject matter, The two key questions covered in the meeting were energy (Biden's son has a financial interest in shale oil/gas resources in the Donbass) and security. One report claims "the United States promised assistance in all areas" and "there are a lot of arrangements, which should not be mentioned at a press conference". Does this refer to the supply of weapons to the Ukraine forces? We will not see. Given the Novorossian forces ability in depriving Ukrainians of their weapon systems, maybe shiny new US equipment will show up on their side.

The Transcarpathia economy fares slightly better than the overall Ukraine position, but it is dire. Inflation is running at 19% for the year to date and is predicted to reach 25% by the end of the year. Salaries have risen by about 5.8%, to an average of 2660 UAH (~$178) per month. Wage arrears have reduced b 4.5 million UAH to 3.9 million UAH, one of the lowest rates in the country.Kiev, perhaps the wealthiest part of the country, has a budget deficit of 2 billion UAH, with only 25 million UAH on hand as a result of a government strategy to keep Kiev 'on short rations'.

The exchange rate
position is worsening. There is evidence of manipulation of the exchange rate during the run up to the election election. Shortly after the coup, suspicious activity involving armed masked men, unmarked vehicles, forty large crates and an unmarked aircraft led to speculation that Ukraine's gold, or at least a significant part of it, had been secreted out of the country. One possibility is that the residual gold was sold to stabilise the rate of the Hryvnia in order to give an appearance of stability. The NBU however, claims the gold was sold to optimise the structure of international reserves. The exchange rate control was removed after the election and the rate increased dramatically from the nominal 13 UAH / USD to nearly 16 UAH / USD. The head of the Ukraine National Bank (NBU) notes that the UAH has devalued by ~100% since the beginning of the year and by ~50% since July. The NBU now claims to be operating a floating exchange rate. One other possibility for the manipulation is the influence of George Soros. The head of the NBU has admitted that Soros visited Ukraine two weeks ago and that Ukraine relies on financial support from him. There is also evidence of US financial support via the CIA front USAID.

The banking sector
is in a very poor state in spite of this support. The overall banking system of Ukraine made a loss of 13.5 billion UAH for the period January to October 2014, compared to a $2.1 billion UAH profit in the same period the previous year. About one third of bank loans are 'non performing' i.e. they borrower is not making payments. The weak currency also makes it very difficult to pay debt owed in foreign currency. Initially the NBU said it was not going to close banks in spite of speculation in Transcarpathian media. A few days later, it refinanced the state-owned Oschadbank with 11 billion UAH and towards the end of the week, it declared that two public joint stock companies, 'VAB Bank' and 'CityCommerce Bank' were insolvent after shareholders failed to recapitalise the bank to new capital levels imposed to comply with IMF requirements.

Zakarpatgas, the local Transcarpathian gas supply company, is planning to spend 10.8 million UAH on infrastructure renovation, aimed at reducing gas losses in the distribution system and more accurate metering of gas used by customers.

The Ukraine nuclear power industry depends on Russia for its supply of nuclear fuel for its operational reactors. The contract runs until the end of 2015.

Hungary is under increasing pressure from the US regarding its perceived pro-Russian stance. Orban claims that the government is not pro-Russian, rather it is concerned about the protection of the interests and sovereignty of Hungary, including the Hungarian diaspora in neighbouring countries. In this light, Hungary still supports South Stream as a means of bypassing problems associated with Ukraine and gas supplies through it. It looks like the US is exploiting diverse internal sources of discontent to cover a standard colour-coordinated regime change warm-up. I guess the US hopes the mere threat would be sufficient to make the Hungarians see the error of their ways and put US interests first.

Serbia is not et a member of the EU, but it has been told to impose EU sanctions against Russia by the European Commissioner Johannes Hahn. This is effectively an ultimatum - obey or you do not join. Given the relatively close trading ties and historical association with Russia, the Serbian goverment has stated it will not impose such sanctions. It rightly fears the adverse effects of reverse sanctions. It also has an interest in the success of South Stream and funding for the reconstruction of Serbian railways. It seems likely that Serbia may also face the usual colour-coordinated threat of regime change if it choses to put its own interests before those of the US and EU.

Colour-coordinated regime change - so we have Russia as the big target, then China, but first the Czech Republic, Hungary and Serbia are in the sights of the US. If the German business people have their way, Merkel would change course so Germany would also join the list. I wonder how many simultaneous regime change actions the US can run. Will the totally manipulated US / global USD-backed financial system collapse first as a result of massive internal inconsistencies?

Romania has a new President Klaus Johannis who won a narrow victory over his rival the current Prime Minister Victor Ponta. Johannis is the mayor of Sibiu and the leader of the right wing Christian Liberal Alliance. He seems to have won by default in a protest vote against "wickedness, corruption, betrayal, lies, arrogance" of the system. The US State representative stated that "democracy is alive and well" in Romania and they are prepared to work with Johannes.

Moldova faces an election on 30 November. The results of a poll released on 18 November indicate PCRM (Communist) would get 19.4%, PLDM (Liberal Democrat) 15.1%, PDM (Democratic) 12.4%, PSRM (Socialist) 11.6%, Patria 8.1% and PL (Liberal) 7.1%. The Popular Movement Antimafia would gain 2.5% and the Peoples Party 2.1%. The pollsters surveyed 1591 people aged 18-72 from all localities except Transnistria in the period 1 - 10 November. The accuracy of the result is claimed to be within 2.6%. Other surveys indicate closure of the gap between PCRM and PLDM. Given the PLDM is more pro-EU/pro-US than the PCRM, it seems likely that the result will favour them, and consequent alignment of Moldova with the EU over the RF. Another youth group, the Alliance of Students, has stated it will stage protests if the PCRM win or are included in any governmental alliance. This is a clear indication that some democratic outcomes are not allowed and marks out their role as an EU/US tool.

The Moldovan economy continues to face problems. It's external debt has increased by $11.1 million to $1.3 billion over the course of 2014. Part of this increase arises from the attempt of the Moldovan national bank to stabilise the exchange rate of the national currency (the lei). The exchange rate has increased from 13 lei to the dollar at the start of the year to about 15 lei now. Moldova faces similar problems to Ukraine, facing increasing debt in foreign currency and a weakening exchange rate. Russian sanctions are also important, and the consequent reduced trade with Russia has had the effect of making Romania the dominant trading partner of Moldova. It claims it intends to repay part of the outstanding debt to Gazprom in the near future. It is also considering alternative sources of gas, Romania or Austria via reverse flow. The Democrat Party has come out in favour of the sale of agricultural land to foreigners, an essential part of the EU project. This will allow foreign companies to acquire land cheaply and introduce industrial agriculture, with profit exiting Moldova. This will greatly disadvantage any local farming units.

Gagauzia faces more problems should the PLDM win the election. A representative of the party has publicly stated that the PLDM will not recognise the autonomy of Gagauzia and may be preparing to remove the special status enshrined in law.

Transnistria also faces potential problems after the Moldovan elections. The PMR representative on the jCC 5+2 status negotiations team has expressed the view that Moldovan combatants may storm Transnistria, given the recent provocations against the PMR leader at Chisinau airport and the group of Moldovan soldiers travelling in plain clothes in PMR. Moldova continues to block progress at the JCC meetings originally intended to deliver a peaceful solution to the status of Transnistria. Moldova appears to have a position of no compromise which is consistent with US/EU support. Ukraine is continuing with the construction of a ditch along the border with Transnistria.

Reunification of Moldova and Romania would present further problems for Transnistria and more so, Gagauzia. The original impetus for autonomy or separation was the possibility of reunification of what became Moldova with Romania.

Crimea has a higher profile in the news following the election. As part of his electioneering, Dmitry Yarosh stated that Crimean Tatars would start to cause trouble. This has manifested in frequent appearances of Mustafa Dzhemilev, a Ukrainian representative of, and advisor to Poroshenko on, the Tatar people in the press. He makes unsupported claims that Crimean Tatars are living in a climate of fear. Human Rights Watch have produced a report about these allegations, but their position is compromised having used an image of a women crying in the presence of militia after the Odessa mas murder event claiming the women was being threatened by Russian police. They silently withdrew the petition once their misrepresentation was made public. Interestingly, Soros mentioned earlier also has his finger in the pie in Crimea. He seems to support or influence a Tatar NGO amongst others.

This concludes this short tour. I think it clearly indicates the degree of interaction and the expanding scale of problems enhanced by the coup in Ukraine. There is clear potential for further destabilisation of recalcitrant (in US eyes) countries further to the west with the consequent fallout. The EU politicians have done themselves proud in their obeisance to the Anglo-Zionist project. The remarkably diplomatic Russian Foreign Minister Lavrov has stated the Russia will not shoot itself in the foot by ceasing to trade with Europe, but the former relationship is finished and "business as usual" is no longer possible.