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Ukraine Calls Russia’s Bluff, Slashes Nat Gas Imports By 80% | Zero Hedge

Ukraine Calls Russia’s Bluff, Slashes Nat Gas Imports By 80% | Zero Hedge.

Twice in recent years, Russia has suspended gas supplies, or notably raised prices, as the somewhat well-known “trump card” of Russia’s oil and gas supply to Ukraine (and Europe for that matter) remains Putin’s easiest option for clenching his iron-first against the divided nation. Following a pre-emptive move in November by Ukraine to diversify its energy supply,  Russia had reduced the price of gas for the highly indebted Ukraine in December (to entice Ukraine under Russia’s wing); but, after recent events, Dmitry Medvedev signaled on Monday that the price could be raised again. However, today we find that Ukraine’s state oil and gas company, Naftogaz, has slashed gas imports from Russia’s Gazprom by  stunning 80% in February as Ukraine tries to show Russia it can’t be pushed around… of course, with limited (and more expensive) alternative supplies, we fear this could well shoot them in the foot.

This action is similar to that taken in November (before the EU accession discussion)…

 Russia and Ukraine waged two gas wars over prices in the winters of 2006 and 2009 (which lasted 3 weeks) over a claim Ukraine was late in paying.

Ukrainian Prime Minister Mykola Azarov said that if Gazprom refuses to revise its contract, Ukraine would stop importing gas from RussiaIn a step away from energy dependence on Russia, last week Ukraine signed a $10 billion shale gas deal with Chevron.

Ukraine is speeding up its effort to diversify its supply, and has looked at different exporters, fracking, new offshore projects in the Black Sea, as well as new LNG terminals and pipelines to diversify supply. Ukraine imports more than half of its gas from Russia, but under Viktor Yanukovich’s leadership, has intentionally scaled down Gazprom imports 40 percent over ‘unfair prices’.

And now today,

Ukraine’s state oil and gas company, Naftogaz, has slashed gas imports from Russia’s Gazprom to 28 million cubic meters per day as of February 24 from 147 million, two Russian industry sources told Reuters on Tuesday.

They said Naftogaz had gradually reduced its imports from 147 million cubic meters as of February 1, but did not offer a reason for the cuts.

Prime Minister Dmitry Medvedev hinted on Monday that gas prices, reduced as part of a Russian bailout in December, may revert to higher levels.

Ukraine consumes about 55 billion cubic meters of gas each year, and more than half is imported from Russia. Gazprom exported 161.5 billion cubic meters of gas to Europe last year.

Gazprom official declined to comment on Naftogaz import volumes but said Russian gas transit to Europe was unaffected.

So simply put, they want to show Russia they can’t be pushed around… the trouble is, of course, that with alternative supply routes in short-supply (and only more expensive alternatives available)…

…they may well be shooting themselves in the foot. That and the whole being out of money thing too won’t help.  Finally, as everyone knows by now, Russia does have the “trump card” no matter how hard to get the Ukraine plays:

Ukraine scraps protest laws as PM steps down – Europe – Al Jazeera English

Ukraine scraps protest laws as PM steps down – Europe – Al Jazeera English.

Ukraine’s parliament has scrapped draconian anti-protest laws and its prime minister and his entire cabinet have resigned, in moves aimed at ending a two-month standoff with demonstrators.The decision on the protest laws was made in a special parliamentary session in Kiev on Tuesday, shortly before which the prime minister, Mykola Azarov, offered to stand down in a bid to ease tensions between protesters and the government.

Azarov’s resignation was accepted by the president, Viktor Yanukovich. However, opposition leaders, who have called for the removal of the president, described the moves as “a step to victory”.

Al Jazeera’s Nick Spicer, reporting from Kiev, said the prime minister was regarded as responsible for much of the violence during the crackdown on protesters.

“The prime minister was despised by the people on the streets. He was seen as responsible for the crackdowns,” he said.

“The opposition said this was a small step. A big step would be the resignation of the president.”

Tough laws

The anti-protest laws, which restricted movement and assembly, and threatened tough jail terms for transgressors, had been passed earlier this month as demonstrations against Yanukovich continued unabated for two months.

This is not victory but a step to victory.Vitaly Klitschko, opposition leader

Originally the protests were over the government’s failure to sign an EU trade deal, but the anti-protest laws added another level to the demonstrations.

The laws punished the occupation of public buildings with up to five years in prison, outlawed protest convoys of more than five cars and banned opposition activists from wearing masks or helmets.

Protesters had also started receiving text messages saying they were registered as taking place in mass disturbance.

The president hopes their repeal, and the resignation of Azarov, will put an end to the escalating violence that saw the protests turn deadly last week.

Dmitri Sidorinko, an anti-government activist from the city of Kharkiv, told Al Jazeera that protesters would stay in the streets until the president resigned.

“We will be here until the end, until the victory,” he said. “If nothing is done from the government side, then we will resort to decisive action.

“In the last seven years, nothing has changed in our country for the better. Do you think people would come out in the street to protest if we had everything alright in the country? I don’t think so.”

‘Step to victory’

Azarov said he was offering to step down “with the aim of creating extra means for finding a social-political compromise, for the sake of a peaceful settlement of the conflict.”

But in reality he had been publicly humiliated by Yanukovich’s offer at the weekend to give his job to former economy minister Arseny Yatsenyuk, one of the opposition’s leaders, in an effort to stem the rising protests against his rule. Yatsenyuk turned the offer down.

Al Jazeera’s Nick Spicer updates on the situation in Kiev

The opposition has been calling for the resignation of the Azarov government since the onset of the crisis.

Opposition leader Vitaly Klitschko said Azarov’s announcement was only “a step to victory”.

“For several months we have been saying that what is happening in the streets is also the result of the policies of the current government. This is not victory but a step to victory,” said Klitschko, leader of the UDAR (Punch) party.

The president stopped short of proposing amnesty for dozens of arrested protesters until demonstrators stopped occupying buildings and ended their protests, a major sticking point for Tuesday’s talks.

Russian President Vladimir Putin on Tuesday rejected all foreign interference in the country, saying visits by overseas envoys were adding to the unrest in the former Soviet republic.

“I think that the more intermediaries there are, the more problems there are,” Putin told a press conference in Brussels after a summit with top European Union officials. “At the very least, Russia will never interfere.”

Meanwhile, government supporters gathered outside the parliament in Kiev.

“There is no situation that is not possible to solve by negotiations,” Oleh Kalashnikov, leader of the Combined Arms Union of Ukraine, told the rally. “Our mission today is to stop people who want the coup.

“Your support enables the government to rule the country effectively. Stability in the country, the future of your children depends on you. We’re against the coup! We will win if we stick together,” he added.

With additional reporting by  Tamila Varshalomidze  in Kiev

Russia Threatens With Pulling Bailout As Ukraine Government Resigns | Zero Hedge

Russia Threatens With Pulling Bailout As Ukraine Government Resigns | Zero Hedge.

Mykola Azurov, the prime minister of Ukraine, (and his cabinet) has resigned. The move comes as the government faced losing a no confidence vote and being stripped off their power. It seems the opposition (pro-Europe) are gaining momentum once again as the Ukraine also repealed the controversial anti-protest laws that created more tension last week. The Russians are not amused and have warned that they may reconsider the $15 billion bailout offer if the current government is removed. The Ukrainian Hryvnia is continuing its collapse on this news and has dropped towards record lows (though bonds are rallying).

The opposition is clearly gaining momentum…

Mykola Azarov, the prime minister of Ukraine, submitted his resignation on Tuesday hours before he risked being stripped of his powers in a vote of no confidence in Parliament.His offer to quit was the latest sign of the building momentum of the opposition in the ongoing crisis.

In another concession to the opposition, the pro-government political party in Parliament, the Party of Regions, voted together with the opposition to repeal most of the laws in a package of rules limiting free speech and assembly the lawmakers had passed just a week earlier.

One elderly woman in a kerchief giddily told the Ukrainian channel 5 television after Mr. Azarov’s resignation, “Thank God you heard us!”

But the Russians are not happy (via WSJ):

Russia may reconsider its $15 billion bailout offer to Ukraine if the current government is removed, a senior official said Tuesday, hours after Ukraine’s prime minister offered his resignation in an effort to calm a growing protest movement. “There is no decision yet, but it is self-evident,” that further distributions of the loan would be reviewed if the government of Mykola Azarov was to be dissolved, the official said speaking on condition of anonymity.

However, this is far from over…

Opposition leaders have so far called the president’s concessions “too little too late,” and appear to be in no mood to compromise with him as protesters have seized government buildings in the west and center of the country.

Ukraine police dismantle protest camps – Europe – Al Jazeera English

Ukraine police dismantle protest camps – Europe – Al Jazeera English.

At least three protesters have been killed in clashes as Ukraine’s prime minister takes a hard line against demonstrators flouting anti-protest laws.

Mykola Azarov said on Wednesday that anti-government protests had brought “terrorists” onto the streets of Kiev and pledged to punish all “criminal action”, even as protesters confronted police near government headquarters.

“I am officially stating that these are criminals who must answer for their action,” Azarov said.

Wednesday’s violence came after Ukrainian security forces started dismantling barricades at the protest camp in downtown Kiev, where demonstrators and police have been facing off for the past two nights.

It is reported that two of the victims died from gunshot wounds and were found less than three hours apart in a national library close to the clashes.

The third died in a fall from the top of Dynamo football stadium.

Azarov said opposition leaders should be held responsible for the deaths and said that police at the site of the clashes did not have live ammunition.

The wounds resembled those caused by live ammunition, Oleh Musiy, coordinator of the protesters’ medical corps, told the AP news agency.

EU foreign policy chief Catherine Ashton on Wednesday urged “an immediate end” to the escalating violence, while the Polish Foreign Ministry has summoned the Ukrainian ambassador.

Al Jazeera’s Nadim Baba, reporting from Kiev, said some protesters had become more determined as a consequence of Wednesday’s events.

“It’s not clear how news of the deaths will change the nature of these protests, but for now people are continuing to arrive here at the scene of the clashes,” our correspondent said.

New laws

The violence began when protesters braved heavy snow to remain in Kiev’s central square on Wednesday morning, despite warnings from Azarov that security personnel could use force to disperse demonstrations.

Azarov told Russian television that if “provocateurs” did not stop, the authorities could act under controversial new laws that essentially ban large protests in Ukraine.

Azarov added that he hoped there would be no need for the use of force to disperse the protests.

“We are hoping for common sense,” he said. “People need to understand that they are being offered chaos and destruction.”

On Tuesday, President Viktor Yanukovych refused to meet with an opposition leader, dimming hopes of a peaceful solution to the political crisis.

Russian Foreign Minister Sergei Lavrov warned that the situation in Ukraine was spiralling out of control after two months of protests over Yanukovych’s failure to sign a deal with the European Union.

The UN’s High Commissioner for Human Rights, Navi Pillay, has called the situation in Ukraine “very worrying” and said the government should suspend the controversial anti-protest laws.

Ukraine Government Admits Protests “Spinning Out Of Control” | Zero Hedge

Ukraine Government Admits Protests “Spinning Out Of Control” | Zero Hedge.

With Ukraine’s CDS spiking and the protests growing ever more violent, the government is oddly honest:

  • *AZAROV SAYS KIEV PROTESTS SPINNING OUT OF CONTROL: INTERFAX
  • *AZAROV SAYS GOVT AWARE OF PLAN TO SEIZE PARLIAMENT BUILDING:IFX
  • *AZAROV SAYS UKRAINE ASKING WEST FOR HELP TO CALM PROTESTS: IFX

Of course, the only voice that matter is still calm:

  • *PUTIN SAYS CRISIS IN UKRAINE WILL SUBSIDE

Is that a directive or a statement…?

 

Ukraine On The Edge: The 7 Minute Video Summary | Zero Hedge

Ukraine On The Edge: The 7 Minute Video Summary | Zero Hedge.

The following seven minutes of mayhem look eerily reminiscent of the violent pre-ambles to the middle-east’s recent coups or non-coups. As anti-government protesters demonstrated against the shunning of a European trade agreement (President Yanukovych – “I will not allow any serious economic losses and decline of living standards”); the clashes became ever more violent as the police cracked down. Following heavyweight boxing champion (and opposition leader) Vitali Klitschko’s call for a new government – “our main task is Yanukovych’s resignation. But the first step is the resignation of Azarov’s government” – the clashes left at least 265 people injured. The crackdown followed Interior Minister comments that they “won’t allow Ukraine to become another Libya or Tunisia, where uprisings toppled governments in recent years.” Of course, the main difference is the Ukraine is now squarely under Putin’s sphere of influence.

 

0:20 Initial fireworks followed by police flash-bangs and tear gas…

1:45 Some standard police beatings

3:00 Ubiquitous projectile exchange

3:30 Police charge…

4:30 Serious police beatings handed out

5:30 The two fronts stare each other down

6:00 Serious police reinforcements

 

 

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