6:23 AM Sunday, March 25, 2018 Tuesday, March 13
Mogherini: no Ukraine fatigue in Brussels; Coins will replace small hryvnia bills; Lviv to the Black Sea – through Romania; Ukraine opens embassy in Chile
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Federica Mogherini, the EU’s de facto foreign minister, said in Kyiv that there is “no fatigue” over Ukraine in Brussels. Speaking Monday, she cited Friday’s decision to extend EUR1 billion in macro financial aid to Ukraine and Monday’s decision to extend EU sanctions on Russia. Asked about eventual EU membership, she told students: “The first step is to ensure the implementation of the Association Agreement and its provisions on the FTA, and use all its advantages.” On her fifth visit to Ukraine, Mogherini, a former Italian foreign minister, said: “The European Union is Ukraine's partner and strongest supporter in striving to build a stable, prosperous democracy and economy.”

The EU on Monday extended its sanctions against Russian for another six months. Adopted after the annexation of Crimea four years ago, the sanctions, including travel restrictions and asset freezes against 150 people and 38 companies, now run until Sept. 15.

EU and IMF macro aid is contingent on the Rada approving an independent anti-corruption court. In Kyiv, Mogherini stressed this is in Ukraine’s self interest: “Establishing an independent anti-corruption court, fully in line with the recommendations of the Venice Commission, would also help the business environment and the investment climate. And this would also help - together with continued progress on privatization, energy and land reform - to unlock the Ukrainian economic potential.”

Goldman Sachs believes “there is a 60-65% chance of disbursement” of IMF money to Ukraine before the program expires, one year from now. A visiting team from the New York investment house, lists obstacles, concluding: “One of the solutions, we think, would be to reduce the original amount of disbursement. Even a smaller tranche would send a positive signal to the market and help unlock other IFI aid.” Mikhail Galkin, credit strategist for Goldman’s Emerging Markets Team, highlights government reluctance to raise household gas prices to market levels -- by around 30% -- in an election year.

With annual inflation currently 14%, the central bank is moving to replace 1, 2, 5 and 10 hrvynia notes with coins. The coins and bills will circulate simultaneously for a transition period. On Wednesday, the National Bank of Ukraine will unveil designs of the four new coins.

Finland has joined many foreign donors in extending aid to Ukraine to cut gas bills by investing in energy efficiency. The latest aid is a five year program for EUR15 million Finnish Foreign Minister Timo Soini said in Kyiv.

Ukraine and Romania are working on an alternative highway from Lviv to the Black Sea – through Bucharest. Regional government heads of Lviv, Chernivtsi and Romania’s border county of Suceata, met last weekend to discuss upgrading the 272 km section in Ukraine, from Lviv to Chernivtsi. This drive through the Carpathians takes 4h20, or an average speed of 63 km an hour. Ukrinform reports Georgy Flutur, head of the Suceava, Romania city council, saying that the regional governments will now contact the EU for highway aid.

Nord Stream 2 pipeline is an instrument of Russian policy that will deepen Europe's dependence on Russia, the heads of parliaments of Lithuania, Latvia and Poland write in a letter to the European Parliament. Signed Sunday in Vilnius, the letter says: “The objective of the Nord Stream 2 project is not to diversify the sources of gas supplies. The project aims to deepen the energy dependence of the EU - especially the countries of Central and Eastern Europe from Russia , and also to preserve their vulnerability." Earlier in March, the parliamentary speakers of Ukraine and Moldova signed a similar letter.

Poultry exports were up 40% in January-February, 44,450 tons, compared to the same period last year, the State Fiscal Service reports. For this volume, export earnings increased by 1.6 times, to $69 million.

MHP, Ukraine’s leading poultry producer, is in talks to acquire French poultry firm Doux, which became unprofitable five year ago, after the EU cut export subsidies. Doux is losing out in competition with cheaper Brazilian chicken in key Middle Eastern markets, Reuters reports. Press reports in Paris say the Ukrainian offer involves half of the 1,200 French workers losing their jobs.

Bolloré Group of France has signed a contract with Ukraine’s Bogdan Corporation to build bus bodies for Bolloré’s Bluebus line. The Cherkasy-based company posted on its website: "This contract is the Bogdan breakthrough in the Western European market. We have already cooperated with Eastern European countries, in particular Poland and the Czech Republic.” Bogdan did not say if it would build the bus bodies in its plant in Cherkasy, on the Dnipro River, or at its plant in Lutsk, on the Polish border.

Car production in Ukraine almost doubled in the first two months of this year, hitting 1,085 cars. The entire 94% increase over the same period last year was registered at the Eurocar plant in Uzhgorod, which makes Skoda brand cars. Zaporozhye Automobile Plant, or ZAZ, did not produce any cars in January-February.

ArcelorMittal Kryviy Rih is raising wages, but says it resists pressure to compete with pay levels in Eastern Europe, Ukrinform reports. The company says it takes into account inflation, Ukraine’s labor market, production costs, and forecasts of world metal prices. Arcelor miners recently rallied under the banner of monthly salaries of 1,000 euros.

Freight handling at Ukrainian seaports was up 4.6% in January-February, compared to one year ago, according to the Sea Port Authority. Total freight was 20.5 million tons. The number of ships processed jumped 34%, to 1,850.

Air traffic was the fastest growing mode of transport in Ukraine last year, increasing by 6.5%, the State Statistics Service reports. By contrast, rail transportation dropped by 2.5%.

Ukraine opened its first embassy in Chile on Saturday, upgrading relations with a free market success story on the Pacific. Yurii Diudin, the new ambassador, and Vitalii Tsymbaliuk, charge, were in Santiago for Sunday’s inauguration of Chile’s new president, Sebastián Piñera, a conservative billionaire. They opened a Ukrainian-Chilean Chamber of Commerce and Tourism. Since 2015, citizens of both countries have enjoyed visa free travel. There are about 1,000 Chileans of Ukrainian descent, far below the 200,000 in Argentina and 600,000 in Brazil, South America’s two giants of the Atlantic.

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