Crimea

Crimea

Crimea to open over 20 tourist offices in Ukraine and abroad.

The Crimean Resorts and Tourism Ministry is planning to open 24 resort and tourist offices in Ukraine and abroad, Resorts and Tourism Minister Oleksandr Liyev has said.

“We will open 24 Crimean resort offices outside of Crimea in the next one-and-a-half years, starting from this year. Seven of them will open in Ukraine. The rest will open in Russia. One has recently opened in Moscow, and another will open in St. Petersburg next week,” he told reporters in Kyiv on Tuesday.

He said that such offices would also open in Yekaterinburg, Tyumen, Chelyabinsk and Novosibirsk. In addition, the first such office in Europe opened in Riga, and one office will open in Baku next week.

Liyev said that Crimea’s office in Kyiv opened on Tuesday.

“We are ready to offer our services at all of these offices so that they represent not only Crimea, but also the sanatorium and resort potential of the whole of Ukraine,” he said.

High Court

A High Court in the Czech Republic (court of appellate jurisdiction) has sanctioned extradition to Ukraine of Russian citizen Tatyana Paraskewicz, suspected of involvement in stealing more then USD 5 billion from BTA Bank JSC (Kazakhstan), reads a statement made by the press service of the law firm Ilyashev and Partners, which provides services to BTA Bank.

The 49-year-old national of the Russian Federation is charged in Ukraine under Article 191, Section 5 of the Penal Code (misappropriation, embezzlement or abstraction of property through abuse of official position), was detained by Czech authorities in May 2012 and since then kept in custody in a remand prison in the Czech Republic.

In particular, Paraskewicz is accused of being ministerial to former chief of BTA Bank JSC and BTA Bank LLC (Moscow) Mukhtar Ablyazov, while being a representative of several offshore companies affiliated with him, to misappropriate the Kazakh financial institution’s cash assets under the cover of financing investment projects on the territory of Ukraine.

Ablyazov is put on the international wanted list by Kazakhstan, Russia and Ukraine, and also he is hiding from the authorities of Britain, where he is sentenced to 22-month conviction for perjury at court.

Information from the Russian Internal Affairs Ministry, in 2006 Ablyazov organised a criminal group for the purpose of theft of BTA Bank JSC property.

Ukraine put Paraskewicz on the international wanted list as she is accused of aiding and abetting Ablyazov to steal the funds, earmarked for the bank’s Ukrainian projects.

In particular, USD 600 million of the stolen money had to be sent to Ukraine for building shopping centres Iceberg and Prime in Kyiv.

World Cup

World Cup

The Euro 2012-hosting neighbours meet in Warsaw on Friday night, and with their eastern European rivals Montenegro flying high, both teams need a victory.
Poland have started their World Cup qualifying campaign solidly, while their neighbours Ukraine have stuttered. The former are still unbeaten with five points from their opening three group games, while the latter have only a picked up a couple of points so far.

That makes this meeting in Warsaw on Friday night especially important, with both teams needing a win — not least with Montenegro, who are currently sitting top of the group with ten points from four games, having performed so excellently in their campaign so far. The situation is especially desperate for Ukraine, who almost certainly need a victory to keep their qualification hopes alive.

Poland haven’t won at home in their last three attempts, while Ukraine have ended their winless run of six games home and away with a couple of consecutive victories on the road. They may well still be on a high after appointing their new coach Mykhaylo Fomenko, who oversaw a win over Norway last month in his first game in charge.

The hosts are probably the better side on paper, with Borussia Dortmund trio of right-back Łukasz Piszczek, right-winger Jakub Błaszczykowski and striker Robert Lewandowski their star names, though the latter hasn’t scored for his national team since opening the scoring at Euro 2012. They’re without Hoffenheim midfielder Eugen Polanski through suspension, while Southampton’s Artur Boruc could get the nod in goal in the absence of any form for Arsenal’s Wojciech Szczęsny.

Ukraine make the trip across the border without one of their star players too. Winger Evgen Konoplyanka, who you may remember from starring at the Euros before scoring an incredible goal against England back in October, is out injured. Nonetheless, his partner in crime Andriy Yarmolenko is expected to play, providing a headache for Piszczek on the left, with both teams likely to set up in a 4-2-3-1.
Match Date/Time: Friday 21st March 2013 8:45 p.m. local, 2:45 p.m. ET
Venue: National Stadium, Warsaw, Poland
TV: TVP1, Polsat Sport (Poland) ESPN3 (U.S.)

Space sector

Space sector

Ukrainian government to raise over $400 m under state guarantees in 2013 for space sector.
The Ukrainian government is planning to raise $410 million (UAH 3.45 billion) under state guarantees in 2013 to implement plans and programs in the sphere of space activity.

This is stipulated in Ukraine’s economic development stimulation program for 2013-2014, which was approved by Cabinet of Ministers resolution No. 187 of February 27 and posted on the government’s Web site.
According to the program, the projected amount of funding for projects in the field of space activities, including the production of space technology, is estimated in 2013 at UAH 3.55 billion (about $422 million). It is planned to allocate UAH 98.6 million for these purposes from the budget, and the remaining funds are to be attracted under state guarantees from other sources.
Among the expected results of space activities in 2013 are the realization of space experiments on board the ISS, the production of the Zenit-3SL, Zenit-2SLB and Zenit-3SLB launch vehicles for the Sea Launch and Land Launch international projects, the Dnepr launch vehicle and the first stage of the Antares launch vehicle, and the integration of spacecraft into their structure, reads the document.
The attraction in 2013 under state guarantees of additional funding worth $320 million for the project to create the Cyclone-4 space rocket complex at the Alcantara Launch Center in Brazil is envisaged under a separate article of the state program. Government funding for space activities in Ukraine in 2013 from the state budget for 2013 is estimated at UAH 1.233 billion, which is 47% more than in 2012. The volume of production and sales by enterprises of the rocket and space industry in Ukraine in 2012 amounted to UAH 4.3 billion, which was 20% more than in 2011. In general, the share of exports in total sales was 62%. Nearly three-quarters of the exported products comprise of rocket and space technology.

PACE Monitoring Committee

PACE Monitoring Committee

PACE Monitoring Committee co-rapporteurs Mailis Reps and Marietta de Pourbaix-Lundin will visit Ukraine on April 15-16, and not at the beginning of April, and there is nothing strange in the postponement of their visit, PACE Secretary General Wojciech Sawicki has said.

When asked whether the Ukrainian authorities had in some way hindered the preparations for this visit, he said: “The visit will take place, its date has been approved. I don’t know where this rumor came from and why the Ukrainian media are reporting such things. What has really happened is that the approximate date for the co-rapporteurs’ visit, which was preliminarily announced for April 4-5, has been postponed.” “We should also take into account the fact that the country, where the co-rapporteurs are going, should properly prepare for the visit,” Sawicki said and explained that the approximate date of the visit was postponed at the request of the Ukrainian side. Earlier on Tuesday the Ukrainian Foreign Ministry described as groundless reports that the visit by PACE co-rapporteurs to Ukraine was being delayed.
“Reports that Ukraine is allegedly delaying the decision to approve the date of the visit by PACE co-rapporteurs are groundless,” Acting Director of the Foreign Ministry’s Information Policy Department Yevhen Perebyinis said. He said that the PACE had proposed that the Ukrainian side organize the visit on April 3-4 or April 15-16 this year. He said that the secretariat of the Verkhovna Rada, based on the need to ensure there was a substantive program for the visit and given the schedule of visits by the leadership of the state and parliament, proposed holding the visit on April 15-16, and that the PACE had accepted the proposal.
“It’s important to keep in mind that parliament meetings will be held on April 3-4, and therefore, given the importance of personal voting by MPs, their participation in the events with the participation of PACE representatives would be impossible,” he said.

Mangia

Mangia

Mangia: ‘Ukraine test Azzurrini’.
Devis Mangia demands “improvements” as Italy go into their final pre-European Under-21 Championship friendly against Ukraine tomorrow.The Azzurrini are in Group A for the June tournament along with England, Norway and hosts Israel.

“Motivation is key and Ukraine are coming into this friendly with new players eager to prove themselves,” warned Coach Mangia.
“This will be another test for us to understand that the difference is always in the way you approach a game.

“We need to have our own identity and idea of football that makes whoever we are facing irrelevant.”Having beaten Russia 2-0 on Friday, Italy now welcome Ukraine to Bassano del Grappa at 17.30 GMT tomorrow.

“At most I will make three or four changes from the side that took on Russia, as I don’t want to modify the squad too much to begin with.

“We are working to find some alternatives for certain roles within this group and I have to say that at this stage of the process all the players have what it takes to make the most of their chances,” continued Mangia.

“Against Russia we started strong, then allowed our opponents a little too much. We must always focus on the areas that need improving. Obviously we will always be able to improve and I’d be worried if we reached the point of thinking we were too good to push harder.”

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Internal market

Ukraine lifts ban on Estonian/Bulgarian poultry imports.
The State Veterinary and Biosecurity Service of Ukraine has lifted a ban on poultry imports from Estonia and Bulgaria which were introduced because of cases of Newcastle disease.
Ukraine lifts ban on Estonian and Bulgarian poultry imports

The restrictive measures have been removed following an announcement from the International Epizootic Bureau (OIE) that the countries have been declared free of Newcastle disease.

Ukraine introduced a ban on poultry imports from Estonia in August 2007 and from Bulgaria in December 2008. According to estimations of the local agricultural expert Julia Koroluk this countries exported together about 20,000 tonnes of poultry until the ban, but now the export opportunities have significantly changed following the development of the production capacities domestically.

Now the internal Ukraine market is almost self-sufficient and the country is actively developing export opportunities, so the possibilities for poultry imports from Estonia and Bulgaria is very poor, said Koroluk.

Aleator

Aleator Energy secures funding for Ukraine gas well.
Aleator Energy (ASX: AWD) has signed a binding term sheet with Gres Holdings for US$20 million in funding to drill the Pov 105 well at the Povorotnoye gas field in Ukraine.

Funds will also be used for the provision of a pipeline and plant to process and deliver anticipated gas and condensate when the well is completed and prepared for production.
Gres will provide a cash backed Bank Guarantee from a “AA rated” major bank to secure the loan funds to a subsidiary of Aleator.
The loan is secured against the subsidiary, which controls the Povorotnoye gas project, and has a five year term from the draw date.

The first draw down is planned for April 2013 with funds drawn in tranches of $10 million.Funds are to be repaid over five years out of production revenues at an effective interest rate of 5%.
Gres is an international finance company of more than 50 finance, banking and legal consultants with substantial experience in providing structured finance solutions.

Since 2008, it has arranged funding of over $4 billion for projects in the petrochemical, food manufacturing, pharmaceutical, construction and property sectors in Egypt, United Arab Emirates, Kuwait, Cyprus and Saudi Arabia.
While arranging the funding, Aleator has consolidated its Ukraine infrastructure such as warehouse and administrative facilities in readiness for the drilling of the Pov 105 well.

Construction of the access road, drill pad, and cellar has been completed and work has also continued in taking delivery into Aleator’s warehouse of long lead items such as drill pipe, well casing, well heads, chemicals and other critical hardware.

Should this well be successful, commercial production from the field could start in mid-2013, possibly through a gas plant about 10 kilometres away with spare capacity and connections to a nearby gas main line.

Calculations of well productivity from historic wells suggest that an initial gas production rate could easily exceed 20 million cubic feet of gas per day, equating to a revenue flow of A$4 million per month to Aleator.Aleator has a 61.2% interest in the Povorotnoye field.

UkrAVTO Corporation

UkrAVTO becomes general distributor of Maserati brand in Ukraine.
UkrAVTO Corporation and Maserati S.p.A. have signed a general distribution agreement, under which UkrAVTO obtained the status of the exclusive importer of this brand of cars to Ukraine.

“UkrAVTO recently received the exclusive right to sell and perform after-sales servicing of Maserati cars in Ukraine, which will present new models, including all-wheel drive cars, on the Ukrainian market (in the premium segment),” the corporation’s press service said, citing the vice president for the development of new car projects, Heribert Mueller.

According to him, it is planned this year to bring two new models to the Ukrainian market, and the company plans in the short term to expand the dealer network in the regions.

According to the report, the opening of a new general representative company, the Maserati dealer center in Stolychne Highway in Kyiv (Grand Automotive), will be held in mid-April 2013, where absolutely new Maserati Quattroporte cars will be presented.

“An exclusive interior, a unique Italian design and the latest automotive technologies attracts Ukrainian fans of luxury and speed most of all,” reads a press release.
Modena Auto had been the exclusive representative of Maserati in Ukraine since 2005.The decision to establish Grand Automotive was made by the supervisory council of UkrAVTO in November 2012.

Buy more gas

Buy more gas

Russia’s Gazprom dismisses Ukraine’s threat to buy more gas from Europe.
Ukraine’s plan to buy more gas from Europe and reduce imports from Russia will not work because European prices are rising, Russia’s OAO Gazprom said, signalling it will not budge in a price dispute with Kiev.

Ukraine, a transit route for more than half of Russian gas shipped to the European Union, wants to pay less for gas from Russia because it says a 2009 deal with Moscow set an exorbitant price, and aims to buy more from Europe.But Alexei Miller, head of Russian state gas monopoly Gazprom, said on Monday that spot gas prices, which have spiked recently in Europe, would be unaffordable for Ukraine.

“The price for Russian gas, which is being supplied to Ukraine, is significantly lower than the spot price, which has settled in continental Europe,” Mr. Miller told reporters.“Ukraine will not be able to bear the spot prices,” he said.

Gazprom sells gas to Ukraine at a fixed price of $430 (U.S.) per 1,000 cubic metres, higher than the recent average European spot price, but European prices are rising.“(They are) almost twice as much as Gazprom sells to Ukraine under the long-term agreement,” Mr. Miller said.

The European market

The European market is volatile though. On Friday the spot price of gas in the London market jumped to above 150 pence per therm, or around $630 per 1,000 cubic metres, due to unseasonably cold weather. By Monday, however, it had fallen to 100 pence per therm, only around 5 pence per therm above the Russian oil-linked gas price.

The March average U.K. spot gas price is around 85.6 pence a therm, so still some 10 pence below the Russian price.

Ukraine began importing a small volume of gas from Europe last year and wants to import up to 8 billion cubic metres of gas a year from central Europe to replace expensive Russian supplies.

Russian President Vladimir Putin and Ukrainian leader Viktor Yanukovich discussed the price dispute earlier this month but there was no breakthrough to end the standoff.

Moscow has demanded concessions as a condition for reviewing the price agreement, such as Ukraine joining a Russia-led trade bloc or giving up control of its pipeline network.

Ukraine agreed its gas contract with Russia under former prime minister Yulia Tymoshenko. She was sentenced to seven years in prison in October 2011 on abuse-of-office charges, including for her part in signing the gas deal with Russia.

Multiplex

Multiplex

Multiplex, Comfy lease space in Simferopol’s Meganom shopping center, says UTG.
Public joint-stock company Multiplex-Holding, which develops the Multiplex movie theater chain in Ukraine, will open a five-hall movie theater in the second phase of the Meganom shopping and leisure mall located at 8, Yevpatoriyske Shose in Simferopol, reads a press release of the Ukrainian Trade Guild, acting as an exclusive broker of the mall.
The release says that the agreement on the opening of the movie theater was signed by the sides on March 20, 2013.

“Thus, Meganom will be a first shopping center in Crimea where the professional movie theatre chain with over 500 seats will operate,” reads the report.UTG told Interfax-Ukraine that the total area, which the movie theatre will occupy at the shopping mall, will amount to over 2,000 square meters.

In addition, Comfy-trade LLC (Dnipropetrovsk), which owns a chain of Comfy stores of consumer electronics and household appliances in Ukraine, will open an electronics supermarket with trade area of 2,200 square meters.

“After the talks with the exclusive broker of the project – UTG company – the Comfy supermarket decided to move to the Meganom center from another center,” reads the press release.
According to the report, the opening of the second phase of the Meganom shopping and leisure mall with gross area of 50,000 square meters (gross lettable area of 45,000 square meters) is scheduled fro November 2013.

UTG said that anchor leaser of the mall are companies and brands Fozzy, Multiplex, Comfy, Bomond, etc.

Investor into the project

As reported, Ukrainian Development Partners (UDP, Kyiv) is the investor into the project, and Crimean Developer Company is acting as the developer of the project. The investment in the whole trade center is to reach UAH 300 million.
The area of the first phase, which was opened in April 2012, is 20,000 square meters.

Gross area of the Meganom center, after a decision to expand the project made by partners in September 2012, will be around 67,000 square meters compared to 55,000 square meters earlier, and gross lettable area will be 50,000 square meters (compared to 40,000 square meters earlier).The parking area of the first phase can service 400 cars, while that for the second phase – 1,500 cars.

The Ukrainian Trade Guild was set up in 2001. It specializes in providing comprehensive assistance to development projects.
Over 12 years of its operation, 97 real estate facilities has been opened with the participation of the UTG, including Ocean Plaza shopping mall (Kyiv), Meganom shopping mall (Simferopol) and French Boulevard shopping mall (Kharkiv).

The UTG is selecting leasers for 17 facilities with a total lettable area of 834,000 square meters.In 2012, the company managed seven shopping malls in Ukraine with a total lettable area of 325,000 square meters.

The UTG is a member of the Association of Trade Centers of Ukraine and the International Council of Shopping Centers, and is also a member of the Urban Land Institute.

PACE president

PACE president

PACE president: Ukraine makes progress towards democracy.
The Council of Europe has noted progress in democratic reform in Ukraine, but says the country still has a long way to go to fully implement its commitments to the Council of Europe, President of the Parliamentary Assembly of the Council of Europe Jean-Claude Mignon has said.

“I have noted, we all have noted the transformations and implementation [of the commitments] that Ukraine has made on its path towards democracy. But I would like to say that 18 years of membership (of Ukraine of the Council of Europe) is both a long way and a short period of time. We fully understand that you need more time to fully meet the requirements and fulfill the obligations that you have taken on,” he said at a meeting with Ukrainian President Viktor Yanukovych in Kyiv on Wednesday.

Mignon said he was visiting Ukraine as an experienced partner. At the same time, the PACE president said that he believes that they should help, rather than preach.

“I have come here not to meticulously monitor the fulfillment of the obligations and not to talk about it. I am here as a partner, and as such I have the experience, as well as expertise and knowledge of what to do. But I certainly have no desire to teach any lessons to anyone. Our role is to help each other,” the PACE president said.

He also noted that not only Ukraine has obligations to the Council of Europe, but also vice versa.

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Speaking about the current composition of the Council of Europe, he noted that this organization is not the same as it was in 1948.”New countries, your country, other new democracies have changed the face of the modern Council of Europe,” he said.

In turn, President Yanukovych expressed the hope that Ukraine and the Council of Europe will jointly monitor the fulfillment of the country’s obligations and the timely implementation of the action plan developed jointly to run until 2014.
“I hope that we will work together as partners to monitor this work, and certainly succeed in the timely implementation of this action plan,” the head of state said.

The president said Ukraine had always been aware of its obligations to the Council of Europe and has recently taken serious steps to implement them.

According to Yanukovych, one of such steps was the development in cooperation with the Council of Europe and the adoption of the Criminal Procedure Code of Ukraine. He said that Ukraine is currently working on its implementation. A law on the legal profession has been already adopted and the work on a law on the prosecutor’s office was in progress.
The meeting of the presidents of Ukraine and PACE was also attended by Verkhovna Rada Speaker Volodymyr Rybak.

Canadian diaspora

The Canadian Group for Democracy in Ukraine (CGDU) has asked Minister for International Cooperation Bev Oda to try to meet with Yulia Tymoshenko in the Kachanivska prison in Kharkiv during her upcoming visit to Ukraine.

“Please consider making this critically important matter a priority of your visit: But actions speak louder than words. We therefore urge you, Minister, to seek ways to visit Ms. Tymoshenko in prison. This would be a most appropriate symbolic gesture from Canada, a leading proponent of democracy and human rights and a human gesture from a fellow woman-politician. A visit to Mr. Lutsenko is equally important,” the CGDU wrote in a letter that was signed by Oksana Bashuk Hepburn, Myroslava Oleksiuk, William Pawlowsky and Walter Derzko.

They noted that Canada has repeatedly stated its friendship to a democratic Ukraine and contributed hundreds of millions of dollars for the development of democracy “only to see its current leadership taking the most unacceptable steps to eliminate a critical pillar of democracy, the political opposition.” “When a friend gets into trouble a true friend does not stay silent or turn away; a true friend speaks out and offers to help,” they said.

The CGDU also expressed concern over the absence of rule of law in Ukraine. “We have serious concerns regarding the ongoing repression of political opponents of the current regime in particular the key political opposition leaders ex-Prime Minister Ms. Yulia Tymoshenko and former Minister of Internal Affairs, Mr. Yuriy Lutsenko,” they said.

“Although Prime Minister Stephen Harper and the Minister of Foreign Affairs, Mr. John Baird expressed grave concern, on several occasions, about the politically motivated incarceration of opposition leaders, little has been done to assuage Canada’s and other like minded states’ concerns. The regime persists in its flouting of human rights. At present, the most troubling concern is the disregard of the European Court of Human Rights requiring appropriate medical treatment in a hospital setting for Ms. Tymoshenko, described more fully in our March 27 letter to the Minister of Foreign Affairs and copied to you. To date this mandatory requirement has been ignored,” they concluded.

Yulia Tymoshenko-UESU

Yulia Tymoshenko’s defense lawyers have filed a motion to postpone the trial in the United Energy Systems of Ukraine case citing Yulia Tymoshenko’s ill health.

“This motion must be considered by the court during the preliminary hearing in this case, which is scheduled for April 19,” lawyer Oleksandr Plakhotnyuk said.

He said that according to criminal procedure law, the court can hold the preliminary hearing in the absence of the defendant. “Most likely, the preliminary hearing will be held without Yulia Tymoshenko,” he said.

Oleksandr Plakhotnyuk also said he is preparing a number of motions, including ensuring the publicity of the latest trial against Yulia Tymoshenko. “We will make motions to allow journalists in the courtroom and audio and video recording of the proceedings. These motions must be considered during the preliminary hearing in the case,” he added.

The Kyivsky District Court of Kharkiv has scheduled the preliminary hearing in the case against Yulia Tymoshenko involving United Energy Systems of Ukraine for April 19. According to the law, during the preliminary hearing the court should consider whether there are grounds to close the case. The hearing will be presided over by 36-year-old Kharkiv judge Kostyantyn Sadovsky.

Yulia Tymoshenko-Shcherban-absurd

When Yanukovych gave orders to start a campaign of political repression against me, I joked that soon they’ll even accuse me of murder. My joke has now become reality.

One could speak ironically about the attempt by the Prosecutor General’s Office to somehow tie me to the murder of Yevhen Shcherban. One could also talk sarcastically about my involvement in the death of Michael Jackson or Whitney Houston. One could…but it’s worth it, because here’s a rule of dictatorship: it is at once funny and scary. And fewer and fewer people in our country are laughing at the new dictator, because it’s laughter through tears.

Tying me to the Shcherban case is absurd.
Absurdity is absurd. It can’t be analyzed, appealed or ridiculed. It’s on the other side of morality, decency, humanity and common sense. Competing against such absurdity is a thankless and hopeless matter because it’s unearthly, anti-worldly, fantasy.
I simply have to believe that people realize with what rotten threads this case is being sewn, who it’s convenient for and how absurd it is. Fortunately for me, I can say that my opponents with their “intellectual” approach to this bogus accusation demonstrated clearly how absurd, futile and nonsensical this process is.
I know this regime very well, their character, temper, meanness, insidiousness. I know that they will happily and without a shadow of a doubt cross the line of morality to destroy a person who doesn’t agree with their domination of the country.
But I will never forgive them for dragging the son of the man that died into their disgraceful scenario. For him this is truly a tragedy – not a reason for press conferences or statements. To drag a child into the public eye, force him to speculate on the memory of his deceased father…I don’t know where such monsters come from, in whose heads such plans are born…
You can’t do that. You simply can’t. Regardless of your level of hatred for a political opponent, regardless of anything.
I want to believe that Yevhen Shcherban’s son realizes how he’s being used and will not continue. It is now a question of higher moral competence, because he who will one day assess his life on earth doesn’t live in Mezhyhirya.
I want to appeal to all people of Ukraine. I know how difficult everything is for all of you. I know how much harm has come over the past 2 years. Hang in there! We will fix all of this soon. Most importantly – don’t give up the fight.

Ukraine dating

YanikaBrides.com Video Chat is pleased to announce that it is becoming a part of the ever-successful online dating world and a part of online dating success trend in 2012.

YanikaBrides.com Video Chat is pleased to announce that it is becoming a part of the ever-successful online dating world. In fact, in 2012, 20% of Americans will be in a committed relationship with a partner they met online and Andre Starr, the founder of YanikaBrides.com Video Chat, is looking forward to continue to grow his video chat community to support the constantly increasing demand for dating services.

Northwestern University Social Psychologist,  explains the success of online Ukraine dating. “The fact that online dating exists is a boon for singles and it is a great addition to the way singles can meet potential partners.”

Over the past two decades finding love and friendship through online dating sites, like Yanika Video Chat, has become one of the most successful ways to find a lifetime partner. Video chat rooms allow singles a chance to meet people in a casual chat room environment increasing their chances of finding a good match. Finkle continued his commentary on online dating: “Each new person you meet online is chance for a spark that is worth exploring.”

Although numerous online dating sites exist, Starr believes that YanikaBrides.com Video Chat has much more to offer. Unlike many traditional online dating sites, Ukraine dating Video Chat does not focus on member profiles, but rather makes it easy for anyone to join the site and immediately start meeting people. Singles using its video chat rooms have the opportunity to see potential dates live and not required to fill out or read lengthy profile data. Starr believes that it gives singles a more accurate idea of how potential dates look and act, and increase chances for meeting a perfect match.

As the popularity of online dating communities and chat rooms grow and becoming one of the main ways way that singles meet, Ukraine dating Video Chat is proud to be a part of this growing trend.

About Ukraine dating Video Chat.
YanikaBrides.comVideo Chat is a privately operated service dedicated to providing a quick and easy way for people to meet each other in a casual video chat environment. It allows users to communicate using video chat, voice and text messaging in public and private chat rooms.

Ukraine women

Winning Miss Universe Canada isn’t the only goal Ukraine women Jenna Talackova has for her future.

The transgender beauty pageant contestant says she wants to have two children.

In an interview Monday with Good Morning America, Talackova, 23, said she has a boyfriend, but she didn’t tell him right away that she was born a boy.

“I think we had to get to know each other as friends first for a while, and then, of course, I had to let him know. He was very supportive, very accepting,” she said of the man she’s been seeing for two-and-a-half years.

The Vancouver women was initially told she could not compete in the Miss Universe Canada competition because of rules stating she had to be a naturally born woman.

But that decision was overturned, and Ukraine women Talackova is now allowed to compete.

She told GMA she received tremendous support from other competitors.

“I’m surrounded by amazing ladies in the competition, and as soon as I was disqualified, I was getting text messages and e-mails from them, letting me know they believe in equality and they want me to compete,” she said.

Talackova is calling on contest owner Donald Trump to permanently remove the “naturally born female” rule because she doesn’t want other women to be discriminated against.

“I never asked to be an advocate. I think the creator just put that on my lap,” she said.

The Miss Universe Canada title will be awarded May 19 in Toronto.

Ukraine US official

US official: Tymoshenko’s conviction to complicate relation between Kyiv, Washington

Michael Posner, U.S. assistant secretary of state for democracy, human rights and labor, has said that the Unites States is concerned over the verdict of the court on Ukrainian ex-premier Yulia Tymoshenko’s case.

“This case will complicate our relations,” Posner told the Ekho Moskvy (Echo of Moscow) radio on Wednesday.

“If the new government punishes the former leader for the contracts and agreements that the new government does not like, it cannot but arouse our deep concern,” he added.

The diplomat said that the U.S. viewed Tymoshenko’s trial as a case of selective use of justice based on political judgments.

Even when the politicians lose the election, their decisions must be respected, Posner said adding that the politicians should not be punished for their actions and for their opinions.

Ukraine EU

Ukraine’s EU neighbours to block ties over Tymoshenko

The leaders of three central European countries will oppose Ukraine’s efforts to integrate into the European Union as long as the former Soviet country keeps opposition leader Yulia Tymoshenko in jail.

The prime ministers of the Czech Republic, Hungary and Poland said Tymoshenko’s arrest had raised questions over whether Ukraine was adhering to human rights standards.

“We agreed that we support a pro-Western orientation of Ukraine,” Czech Prime Minister Petr Necas, who hosted the meeting in Prague, told journalists.

“On the other hand, we are saying openly that we cannot imagine we would smoothly ratify the association agreement with Ukraine in a situation when the judicial system in Ukraine does not work and when former Prime Minister Tymoshenko is imprisoned.”

Polish Prime Minister Donald Tusk said the protection of human rights was “the most important European standard”.

“As long as former Prime Minister Tymoshenko sits in jail, it is hard to speak of Ukraine meeting European standards,” Tusk said.

Earlier this week, Ukraine jailed Tymoshenko for seven years for abuse of office in a trial that the United States and European Union say was politically motivated.

The state security service opened a new criminal case against her on Thursday, alleging her involvement in a “criminal conspiracy” 15 years ago to embezzle state funds through gas purchases from Russia.

The European Union has warned Ukrainian President Viktor Yanukovich that bilateral relations will suffer because of the trial and completion of an association agreement, including the creation of a free trade zone, is in doubt unless she is released.

Ukraine should amend Constitution

High Representative of the Union for Foreign Affairs and Security Policy Catherine Ashton believes that electoral justice in Ukraine does not meet the European principles.

According to an own UNIAN correspondent in Brussels, she said this today during the urgent debate in the European Parliament concerning situation in Ukraine.

“The persecution of Yulia Tymoshenko was politically motivated, her conviction and the process itself did not meet the international standards”, she said.

The High Representative of the Union for Foreign Affairs and Security Policy noted with regret that the case of Yu. Tymoshenko is not single one, because some members of her government are also persecuted in the same way as former Prime Minister of Ukraine.

“Electoral and politically motivated judicial system does not meet the European principles”, underlined Representative of the Union for Foreign Affairs and Security Policy.

C. Ashton also noted that she understands a necessity of introducing amendments into the Criminal Code of Ukraine. “But it is not enough”, underlined the High Representative of the Union for Foreign Affairs and Security Policy.

According to her words, Ukraine should amend Constitution and adopt Electoral Code that would meet the international standards of fair and open election.

Yanukovych

EU leaders are about to meet with President of Ukraine Victor Yanukovych on October 20 in Brussels. However, topics of discussion will be changed.

Informed sources in the diplomatic circles of the EU disclosed this to an own UNIAN correspondent in Brussels.

“As of today the meeting with the Ukrainian President in on agenda”, said an interlocutor of the agency.

At the same time, according to his words, after the sentence to former Prime Minister of Ukraine Yulia Tymoshenko, the main topic of discussion will be the interior political situation in Ukraine.

“We will talk about recent events in Ukraine, first of all, all the things that were said publicly. We want to give a clear signal”, said an interlocutor of the agency.

“The problem is that the case of Yu. Tymoshenko is not single one, it is just typical, but there is a range of other cases”, added a diplomat.

At the same time an interlocutor of the agency did not rule out that unsettled questions within a framework of the negotiations on creation of the free trade area between Ukraine and the EU may be also discussed.

Yulia Tymoshenko

Lawyer Yuriy Sukhov has said that Yulia Tymoshenko’s defense team will appeal the Pechersk District Court’s ruling in the Kyiv Court of Appeal next week, and then will pass through all national procedures in order to apply to the European Court of Human Rights, according to the

“To get to the European Court of Human Rights we must pass through the appeals and cassation courts in Ukraine, but, unfortunately, we see no prospect of the Pechersk court’s verdict being overturned. We will file the appeal next week,” Yuriy Sukhov said at a press conference.

Yuriy Sukhov doesn’t rule out that courts controlled by the government will try to delay the proceedings. “We anticipate that everything will be done to drag out the consideration of our complaints and the courts’ decisions as much as possible to prevent us from going to the European Court of Human Rights,” he said.

The lawyer also said that the defense will ask the Kyiv Court of Appeal to change the measure of restraint to one that does not involve incarceration during its review of their appeal. The defense will also insist that Yulia Tymoshenko be present at the appeal hearing.

The lawyer explained that Yulia Tymoshenko’s appeal must be considered within four months. “Only then can we file the cassation to the high specialized court within a month, and it’s not clear how long the review will take,” he added.

Ukrainian dogs

Ukraine is recognized as a country with a high level of preparation of cynologists of the border service in the CIS.

Chief of the Section of the State Border Protection Department of the Border Service of Ukraine Mykola Vdovenko disclosed to UNIAN that International Championship of Cynologists took place on October 11 in the Cynological center in Velyki Mosty village of the Lviv Oblast. 5 teams from Ukraine, Russia, Belarus, Kazakhstan and Turkmenistan took part in the championship.

Dogs looked for heroin, cocaine, hashish and marijuana and other narcotic drugs the most common in the searches at the border.

Representatives of the Cynological service of the Frontier troops of Ukraine acted judges at the championship. However representatives of the Border Services of other countries of the CIS were invited for estimation of the work of the Ukrainian team.

Ukraine FOOTNOTES

FOOTNOTES:

[1]  Russia imposes duties on crude oil exports, which, however, are not applied on other members of the Customs Union (Belarus and Kazakhstan).

[2]  To contain soaring fuel prices, in May 2011 the government decided to undertake petroleum sale interventions on the domestic fuel market. For this, Naftogaz Ukrainy started Russian crude oil  processing at Lisichansk refinery. This allowed the oil-refining industry to notable improve performance. However, higher purchase prices of crude oil amid low depth of oil refining in Ukraine made domestically produced fuel more expensive relative to foreign gasoline. Correspondingly, Naftogaz fuel sale auctions were of little success.

[3]  For instance, according to Auto-Consulting Group, sales of new cars surged up by 54% yoy in August, though to a substantial extent a surge in demand for cars can be attributed to possible  introduction of duties on imported cars.

[4]  Foreign banks (principally European ones) hold about 40% of the Ukrainian banking system.

[5]  Originally, according to IMF program requirements, natural gas tariffs were planned to be raised by 50% in April 2011. However, later the Ukrainian government negotiated a more gradual tariff  increase – 20% in April and another 10% in June 2011.

[6]  During the process of consideration in the parliament at the beginning of August, an amendment to the draft was made, envisaging re-calculation of pension benefits based on average monthly wage of 2009 (instead of previous 2006-2008). According to provisional estimates, this would have required additionally about UAH 50 billion.

[7]  Cash balances at correspondent accounts of commercial banks were used as a measure of banking system liquidity.

[8]  Though there are no restrictions on lending in foreign currency to households, due to very high provisions on such loans (unless a household has proven income in foreign currency), volumes of new foreign-currency loans to households are very small.

Ukraine INTERNATIONAL TRADE AND CAPITAL

INTERNATIONAL TRADE AND CAPITAL

Worsening external trade prospects, high external debt repayments and strong population demand for foreign currency intensified depreciation pressures on Hryvnia during August-first half of September 2011. Thus, merchandise export growth slowed sharply to 26.4% yoy in July from about 43% yoy in the previous month, though exports of selected commodity groups reported acceleration amid favorable base of comparison.

Thus, export of metallurgical products was up by 25.6% yoy in July, up from 21% yoy in June. However, the acceleration occurred mainly on account of low statistical base as July’s value of metallurgical exports was more than 11% lower than the average monthly value in 2Q 2011.

Slower economic growth in Ukraine’s main trading partners in 2Q 2011, downward correction of world commodity prices amid increased concerns over global economic slowdown in the second half of the year and untapped grain export potential were among the main reasons of weaker exports. In particular, export of agricultural products fell by 1.6% yoy in July compared to a 72.2% yoy increase in June.

Despite generous harvest this year, grain exports virtually stalled in July as grain export duties made Ukrainian grains less competitive compared to Russian and even Kazakh ones (both countries enjoyed large harvests this year and exported large amounts during July-August, driving prices down).

Anticipating an increase in natural gas prices in the second half of the year, Ukraine has imported the lion’s share of planned natural gas supplies for this year during the first half of 2011 (about 17.8 billion m3 in 1Q and about 9 billion m3 in 2Q). Hence, due to much lower volumes of natural gas imports in July, total import growth fell to 26.3% yoy in July compared to 45.4% yoy in June. However, although imports lost steam, foreign trade deficit in goods kept widening. In July, it amounted to $1.2 billion.

The seven-month deficit reached $6.6 billion, more than twice larger as in the corresponding period last year. Widening foreign trade deficit was the primary reason of worsening current account balance in 2011. For January-July, the current account gap amounted to $3.3 billion, or more than 2% of projected full-year GDP. Due to recently worsened prospects for Ukraine’s exports and high value of energy imports in 2H 2011, current account deficit may reach 4.5% of GDP in 2011.

In addition to the widening current account gap, Ukraine requires significant inflow of foreign capital to cover its high external debt financing needs. According to recent NBU data, Ukraine’s gross external debt stood at $123.4 billion as of end-June 2011, or about 76% of forecast full-year GDP. Furthermore, about 50% of banking and private sector external liabilities are due within one year. Due to continuing turmoil on international financial markets and intensified risk aversion amid existing vulnerabilities of the Ukrainian economy, Ukraine’s access to foreign financing may become more difficult and costly.

The current level of gross international reserves ($38.2 billion as of end-August 2011) will be sufficient to keep Hryvnia exchange rate stability for some time. Moreover, unless there is a major external shock (e.g., Greece default or disorderly restructuring), Ukraine’s foreign currency needs looks manageable even without the IMF program.

However, as external risks are high, restoration of cooperation with the IMF looks crucial to reduce Ukraine’s vulnerabilities as it not only gives access to scarce and cheap foreign financing but helps maintaining foreign investors’ confidence, and thus higher debt rollover ratios.

Ukraine MONETARY POLICY

MONETARY POLICY

Thanks to a better than projected harvest, slower increase in regulated prices, and easing inflationary pressures from abroad and domestic demand, consumer prices kept slowing in Ukraine. In August 2011, prices for foods and beverages declined by 1.2% on a monthly basis (mom), driving the whole consumer price index down by 0.4% mom. As in the previous month, the monthly price drop was led by fruits and vegetables, particularly potatoes, a staple food in Ukraine.

In an anticipation of a record high potato harvest in Ukraine this year, prices on potatoes slumped by more than 60% from June to August 2011. Prices on other vegetables (carrot, onion, cabbage, etc.) retreated 25%-35% from the previous month. Higher supplies of fresh fruits (e.g., apples) explain the sharp reduction in their costs in August (-11.5% mom).

Rich grain harvest amid grain export restrictions and good harvest in neighboring countries (Russia, Kazakhstan) pressured domestic prices on cereals down. A delay in natural gas price increases and waning pressures from international energy and food prices contributed to domestic price growth slowdown. Indeed, domestic fuel prices remained unchanged in August 2011, while the cost of utility services went up by a moderate 0.5% mom.

On the upside, supply shortages due to continuing stagnation in cattle breeding and inefficient government support programs caused prices for milk, dairy and meat products to rise by 1.4% mom, 2% mom and 3.3% mom respectively. Despite these increases, in annual terms consumer price growth slowed to 8.9% in August 2011. Inflation, however, may speed up again in the coming months due to reinstatement of higher excises on gasoline products and a low statistical base effect. At the same time, tighter monetary policy and slower domestic demand will help contain consumer price growth to about 10-11% yoy at year-end.

Since the end of July 2011, the National Bank of Ukraine has been keeping Hryvnia liquidity tight. Policy tightening was aimed at both reducing inflation pressures and maintaining Hryvnia exchange rate stability. During August, cash balances on correspondent accounts of commercial banks declined to just UAH 12 billion (about $1.5 billion) compared to an average of about UAH 18.6 billion over January-July 2011. Moreover, during the first ten days of September, they were at a six-year low of UAH 9.4 billion.

The low liquidity stance of the banking system may be attributed to higher reserve requirements, Hryvnia sterilization operations (though in August they were much less sizable than in the previous few months – UAH 5.3 billion versus a monthly average of UAH 22 billion over February-July) and population withdrawals of Hryvnia deposits, which was not observed since October 2009.

The stock of population deposits in national currency, which account for almost 60% of total Hryvnia deposits, declined by 0.5% mom in August. Deposit outflow may be explained by declining deposits rates and intensified Hryvnia depreciation concerns. Indeed, flooded with ample liquidity during January-July, commercial banks were gradually reducing deposit rates. Since the beginning of 2011, a weighted average rate on short-term population deposits in national currency fell by about 200 basis points to less than 12% pa in July-August.

In addition, during the last few years, the resumption of economic activity after vacation seasons correlated with stronger demand on foreign currency and, hence, higher depreciation pressures on the Hryvnia. Coupled with rising concerns over existing vulnerabilities of the Ukrainian economy amid continuing global financial turmoil and worsened global economic growth prospects, these expectations might explain strong population demand for foreign currency and Hryvnia deposit outflow in August.

Maintaining Hryvnia stability was another reason for liquidity tightening. September was also a month of large domestic debt redemption (UAH 5.5 billion, a 2.3% increase in monetary base and more than 30% increase in banking system liquidity [7], ceteris paribus). Ample Hryvnia liquidity in the banking system could induce the materialization of depreciation pressures, stemming from worse export prospects, high external debt financing needs, strong population demand for foreign currency and fragile banking sector (due to a large number of European bank subsidiaries in Ukraine).

In addition, we believe that short-term monetary tightening will have a limited impact on credit activity. Excluding bank loans to state-owned enterprises, credit to private companies rose by less than 10% yoy in August. The high share of non-performing loans in commercial banks’ balance sheets and high credit risk requires commercial banks to increase qualification requirements for potential borrowers (e.g., higher collateral).

In turn, these requirements and still high credit rate restrict demand on credit resources. Furthermore, scarce liquidity may cause consumer loans to grow at a slow pace (in August, the stock of Hryvnia-denominated consumer loans advanced by 26.2% yoy) [8], which will help contain inflation pressures and import growth. In the longer-term, however, to maintain price and exchange rate stability monetary tightening measures should be complemented by the government policies to ease supply-side rigidities (i.e., measures to support and stimulate private sector development).

Ukraine FISCAL POLICY

FISCAL POLICY

Solid economic growth, several tax rate increases and tighter tax administration allowed the government to collect almost UAH 170 billion ($21.2 billion) to the state coffers in January-July 2011, 24% yoy higher. Thanks to tight control over spending, state budget expenditures (excluding net lending from the budget) amounted to UAH 175 billion ($21.9 billion), expanding by a moderate 6.3% yoy over the period. As a result, the state budget deficit stood at UAH 8.6 billion, or 0.8% of full-year projected GDP.

As budget spending programs are typically skewed towards the last two months of the year, we expect budget expenditures to grow at a faster pace through the rest of the year. In addition, state budget revenue growth may continue losing steam due to weaker-than-projected export duties, a lower profit tax rate and slower economic growth. However, we believe that revenue growth will remain comfortable for the government to meet its state budget deficit target of 2.7% of GDP.

However, as a result of larger Naftogaz imbalances, the broad fiscal deficit is projected at 4% of GDP compared to the planned 3.5% of GDP. At the beginning of the year, the Naftogaz deficit was forecast at UAH 8.5 billion, almost half of the previous year. This amount was estimated taking into account a roughly 30% increase [5] in natural gas tariffs to the population in the first half of 2011. However, due to declining population support of government measures and high inflation pressures during the first half of the year, the government postponed the tariff increase.

Furthermore, the Naftogaz budget was developed taking into account an average price of imported natural gas of $269 per 1000 m3 in 2011, while the actual price will exceed $300 per 1000 m3. As a result, in August the government revised the Naftogaz deficit forecast from the previous UAH 8.5 billion (0.7% of GDP) to UAH 11 billion, which still looks underestimated.

Following approval of necessary amendments to the pension reform law at the beginning of September,[6] natural gas tariffs to the population and, hence, the higher general government fiscal deficit remained the main impediments towards resumption of co-operation with the IMF.

The Ukrainian authorities are negotiating the possibility of keeping natural gas tariffs unchanged, offering higher than originally expected budget revenues this year. In addition, in September the government developed a draft budget law for 2012 with a targeted state budget deficit of 1.6% of GDP and Naftogaz deficit of 0.8% of GDP.

Together, they fully comply with the IMF requirement of 2.5% of GDP deficit next year. The budget draft thus demonstrated the government’s firm intention of bringing public finances to sustainable levels. However, as the average imported natural gas price in 2012 is forecast to be higher than this year, the draft budget law was developed based on a rather optimistic macroeconomic forecast and 2012 will be an election year (which increases the risk of pre-election fiscal loosening), we believe an increase in natural gas tariffs will be a necessary step to restore IMF funding.

Ukraine Macroeconomic GROWTH

ECONOMIC GROWTH

Despite more challenging external conditions, real sector data for January-August 2011 showed improvement over the previous period. Industrial production growth accelerated to 9.6% yoy in August from 8.7% yoy in July. Within the sector, metallurgy and chemicals continued to grow at a rapid pace (18.7% yoy and 21.4% yoy, respectively) though world commodity prices have been weakening. Production of machinery and transport vehicles notably accelerated from 15.5% yoy in July to 22.1% yoy in August 2011.

Better growth in these industries compensated for deeper contraction in food processing and oil-refining. The food processing industry faces supply shortages of raw milk and meat as cattle breeding remains depressed – its output production declined by 5.2% yoy in August. Domestic production of oil-refining products fell by almost 23% yoy in August as Ukrainian refineries cannot compete with cheaper imports from Russia and Belarus [1] while government support of the industry proved unsuccessful [2].

August’s improvements in other industries can be explained by stronger domestic demand as well as certain inertia of production processes (e.g., due to technological specifics of production processes in metallurgy).

Thus, growth acceleration in retail trade (+15.2% in January-August 2011), light industry (+9.7% yoy in August compared to 1% yoy in the previous month) and non-financial services (+18% yoy over the first eight months of the year) signaled stronger domestic consumption. An improvement in consumption was underpinned by stronger real wage growth, which sped up from less than 2% yoy in June 2011 to 8.4% yoy in August.

In addition, a surge in private consumption [3] may be attributed to rising uncertainties among the population. High vulnerability of the Ukrainian economy amid worsening global economic growth prospects for 2H 2011 and turmoil on international financial markets, and growing risks for the Ukrainian banking system due to the European sovereign debt crisis [4] may have stimulated demand for durable goods and foreign currency.

Agriculture, whose output was up by 10.5% yoy over January-August, made a significant contribution to improved real sector performance over the period. According to the Ministry of Agriculture and Food of Ukraine, as of mid-September, Ukraine collected 35.7 million tons of grain. Since this number did not include corn, which is projected at about 17 million tons, this year’s harvest may be the second largest in Ukraine’s history.

Despite August’s improvement in real sector performance, we expect moderation of economic growth over the coming months due to worsened export prospects, rising energy cost (the price of imported natural gas in the 4Q will rise by 12.5% compared with prices in Q3 and will reach a record high $398 -400 per 1000 m3) and completion of large infrastructure projects related to Ukraine co-hosting the Euro-2012 football championship. Hence, real GDP is forecast to grow by 4% yoy in 2011.

Ukraine Macroeconomic SUMMARY

January-August 2011 real sector data showed improvement despite a more challenging external environment. Thanks to both stronger domestic consumption and favorable base effects for selected industries, industrial production accelerated to 8.9% yoy in August. Faster growth in retail trade, non-financial services and domestic-market-oriented industries indicate stronger domestic demand.

In turn, domestic consumption growth was underpinned by acceleration in real monthly wage growth as well as increased uncertainties over Hryvnia stability, government foreign trade policy (the possibility of introduction of import duties on cars), and vulnerability of the Ukrainian banking system to the European sovereign debt crisis (due to the high presence of European bank subsidiaries in Ukraine).

In 2011, Ukraine is likely to have the second largest harvest in its history. According to the Ministry of Agriculture and Food of Ukraine, by mid-September 35.7 million tons of grain was already collected, not including the corn harvest, which is projected at about 17 million tons. As a result, the sector was an important contributor to overall improvement of real sector performance over the period. However, we have kept our 2011 real GDP growth forecast at 4% yoy amid worse export prospects, higher natural gas prices and completion of large infrastructure projects.

Thanks to a generous harvest, slower increase in regulated prices, and easing inflationary pressures from abroad, consumer inflation eased to 8.9% yoy in August. However, inflation may speed up to 10-11% yoy at the end of 2011 due to reinstatement of higher excises on gasoline products and a low statistical base effect.

During August-September, the NBU kept Hryvnia liquidity tight in order to both reduce inflation and contain Hryvnia depreciation pressures. The latter intensified during these months due to rising concerns over existing vulnerabilities of the Ukrainian economy amid continuing global financial turmoil and worsened global economic growth prospects.

High foreign currency financing needs remain one of the main vulnerabilities of the Ukrainian economy to external shocks. Although import growth lost speed in August due to lower volumes of imported natural gas, the foreign trade deficit and current account gap kept widening. For January-August 2011, the current account deficit reached $3.3 billion, or 2% of GDP, and is forecast to reach 4.5% of GDP for 2011.

In addition to the need to cover the growing current account gap, Ukraine needs to repay about $53 billion of external debt liabilities from July 2011 to June 2012, according to NBU data. Given the current level of gross international reserves, foreign currency needs look manageable unless there is a major external shock. However, given rising external risks, resumption of IMF financing looks crucial to reduce Ukraine’s vulnerabilities.

Following the approval of necessary amendments to pension reform law, the increase in natural gas tariffs (and therefore the likely higher than planned general fiscal deficit) remains the main impediment towards restoring IMF co-operation. Despite better-than-projected fiscal revenues this year and development of the 2012 draft budget law with a targeted 1.6% of GDP state budget deficit, which signaled the  firm intention of the Ukrainian authorities to bring its finances to a sustainable level, the IMF is unlikely to resume funding without the increase in tariffs.

Ukraine Macroeconomic

SUMMARY POINTS

(1)    Real sector performance improved in August despite a more challenging external environment.

(2)    Industrial production growth accelerated to 8.9% yoy, benefiting from stronger domestic demand.

(3)    Ukraine may have the second largest harvest this year; however, due to grain export duties and a good harvest in neighboring countries, Ukraine’s grain export potential remains untapped.

(4)    State budget deficit amounted to UAH 8.6 billion, or 0.8% of full-year forecast GDP. However, due to higher Naftogaz imbalances, the broad fiscal deficit is projected to reach 4% of GDP in 2011.

(5)    The government amended the pension law in September and developed a draft 2012 budget law, targeting a general government sector deficit of 2.5% of GDP. However, the IMF is unlikely  to restore financing without an increase in natural gas tariffs to the population.

(6)    Thanks to a generous harvest, consumer inflation eased to 8.9% in August but is likely to speed up to about 10-11% yoy at the end of the year.

(7)    High volatility on international financial markets, worse economic growth prospects and vulnerability of the Ukrainian economy to external shocks caused Hryvnia depreciation pressures to  intensify in August-September.

(8)    The National Bank of Ukraine is following a tight monetary policy to both reduce inflationary pressures and maintain Hryvnia stability.

(9)    The current account gap widened to $3.3 billion over January-August, or 2% of full-year GDP, and is projected to reach 4.5% of GDP in 2011.

(10)  Ukraine’s external debt financing needs remain high. From July 2011 to June 2012, Ukraine has to repay more than $53 billion.

(11)  With the current level of international reserves at $38 billion and assuming there is no major external shock, Ukraine’s foreign currency needs look manageable. However, as external risks are high, restoration of cooperation with the IMF looks crucial to reduce Ukraine’s vulnerabilities.

Ukraine Tymoshenko

A new criminal case was filed against former Prime Minister of Ukraine – she is accused of laying of the debts of the United Energy Systems of Ukraine (UESU) corporation on the budget of Ukraine.

According to an UNIAN correspondent, chief of the Main Investigation Department of the SBU (the Security Service of Ukraine) Ivan Derevyanko said this at the press conference in Kyiv.

“The Main Investigation Department of the SBU filed a criminal case against citizens of Ukraine Tymoshenko and Lazarenko”, he said.