Ukraine Liveblog Day 87: Russia Closer To Turning Off the Gas

May 15, 2014
Drawing by Dmitry Divin

Yesterday’s liveblog can be found here. For an overview and analysis of this developing story see our latest podcast.

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An interactive map of the situation:

View Ukraine: April, 2014 in a larger map

For links to individual updates click on the timestamps.

Below we will be making regular updates. Be sure to check back often and hit refresh.

Ukraine Says They’re Gaining Ground Back From Separatists

Ukraine’s interim President Oleksandr Turchynov says that overnight raids on separatist positions have been successful. RFE/RL reports:

Acting President Oleksandr Turchynov said on May 15 that security forces overnight destroyed a rebel base near Slovyansk.

He said the soldiers were also now controlling a 5-kilometer zone around a television tower south of the city that had been seized by the separatists.

He said the tower was now transmitting Ukrainian channels. The separatists had changed the signals to broadcast only Russian state TV.

The Defense Ministry said its forces also destroyed a rebel hideout outside the nearby city of Kramatorsk and had captured three “terrorists.” The ministry said there were no casualties among the soldiers.

Meanwhile, separatists have issued their own ultimatum, demanding that Ukraine withdraw its forces:

“Yesterday, at 9:00 p.m.(GMT 1800), our military issued an ultimatum for Ukraine to withdraw its troops from Donbas region within 24 hours,” Miroslav Rudenko, the leader of Donetsk “self-defense forces”, was quoted by Interfax news agency as saying.

Rudenko said the military of the separatist Donetsk Republic would “use force” against Ukrainian servicemen, if Kiev did not pull its troops out by 9:00 p.m. local time (GMT 1800) Thursday.

And there are breaking reports of new fighting that we are looking into right now. As of 30 minutes ago, however, RT’s reporter was not carrying reports of renewed fighting:

Chocolate King In The Lead, Tymoshenko Way Behind In Polls

When many in the West think about pro-EU politicians (and when Russia slams Kiev’s leadership), they tend to think about Yulia Tymoshenko, the charismatic former Prime Minister and ex-political prisoner. Perhaps they think about Vitali Klitschko, the heavy-weight boxing champion who was one of the leaders of the Euromaidan movement. But Tymoshenko is way behind in the polls and Klitschko has withdrawn from the race and endorsed the leader in the polls, businessman and politician Petro Poroshenko.

According to the latest polling by GFK Ukraine, Poroshenko currently is ahead with 40.5% of poll respondents saying that they are ready to vote for him. Tymoshenko is not even in third, as she is polling at 8.8%, just behind Serhiy Tihipko,  a well-known Ukrainian politician who is polling at 9%. The rest of the votes are divided among 6 candidates, including pro-Russian candidate and former Yanukovych ally Mikhail Dobkin who is polling at 3.9%.

So who is Petro Poroshenko? Ukraine’s “chocolate king” is one of the wealthiest oligarchs in the country. In a recent profile of him, the Foreign Policy Journal notes that he is more powerful than ideological, more pro-business than anti-Russian, and has been focusing his campaign on public corruption and much-needed financial reforms:

The Maidan protests were sparked largely as a result of Ukrainian citizens’ anger with the greedy and corrupt elite, blamed for failing to provide the country with prosperity and jobs. Given his status as one of Ukraine’s wealthiest men, he certainly appears to be in a good position to keep the oligarchs in check and tackle rampant corruption. At the same time, it remains to be seen how he will balance this agenda with the protection of his own business interests, both in Russia and Europe.

Despite advocating a pro-West stance and the need to sign the original EU association agreement, thrown in the bin by Yanukovich, Poroshenko has been hesitant to fully distance himself from the Kremlin, openly declaring that “without dialogue with Russia, it will be impossible to create security”. Poroshenko also has an interest in ensuring that Ukrainian goods will continue to enjoy a place on the Russian market. It seems implausible that the Chocolate King, even with all his financial stability, will be able to avoid paying lip service to Putin. After all, 40 percent of his business takes place in Russia and last year’s ban on his chocolate goods, most likely politically motivated, have dealt quite a blow to his business.

Poroshenko also has connections, however, to Dmitry Firtash, the now-indicted Ukrainian oligarch who is, as The Interpreter’s editor-in-chief Michael Weiss spells out, “at the heart of Russia’s energy stranglehold over Kiev.”

Still, Poroshenko appears to generally be perceived as a competent and moderate pro-EU candidate. Poroshenko recently pledged to pursue EU membership immediately following the May 25th election, and he said he would sue Russia in international court.

Another take on the candidate:

Ukraine Will Have To Pre-Pay For Russian Natural Gas

Russia has been waging a trade war against Ukraine for the last year, not just the last few months. One of Moscow’s key weapons in that trade war is Russia’s natural gas, which not only supplies much of Ukraine, but which is piped through Ukraine to the rest of Europe. In the last few months Russia has significantly jacked-up the price for natural gas sold to Ukraine, and now it seems that the issue is coming to a head.

This past week Ukraine said that it was willing to pay Russia debts which it owes for natural gas, but that it would only pay at the old rates. Now, Putin is saying that Ukraine will have to pre-pay for gas starting in June. AP reports:

Putin first warned of the move in April in a letter to European leaders whose nations are customers of Russian state-controlled Gazprom natural gas giant. He said that Moscow would switch to pre-paid deliveries if Ukraine, which serves as a major conduit for Russian gas supplies to Europe, failed to start settling its mounting gas debt.

In the second letter released by the Kremlin Thursday, Putin said that a meeting involving Russian, Ukrainian and the European Union officials has failed to settle the issue. He said that Ukraine’s gas debt to Russia has kept rising and reached $3.5 billion, even though Ukraine has received $3.2 billion bailout from the International Monetary Fund.

“Given the circumstances, the Russian company has issued an advance invoice for gas deliveries to Ukraine, which is completely in accordance with the contract, and after June 1 gas deliveries will be limited to the amount prepaid by the Ukrainian company,” Putin said in the letter.

On the surface this is significant and could have a major ripple effect across Europe. On the other hand, the possible shutoff is coming in June, Europe has had one of its hottest springs ever, and a deal could be ironed out before the winter. Besides, Russia, at least for the moment, relies as much on gas exports to Europe as Europe relies on Russian gas.

Putin is looking to China to solve its budget problems, but most experts agree that plenty of problems will still exist for the Russian economy even if Putin brokers a new gas deal with China.