Wednesday, October 01, 2014

Ukrainian Truce Frays As Rebels Step Up Airport Attacks

DONETSK, Ukraine -- The cease-fire in Ukraine that curtailed casualties for four weeks is starting to fray as the military said pro-Russian insurgents intensified their efforts to take control of the airport in Donetsk.

A Ukrainian soldier looks on at a camp base near Debaltseve, Ukraine, on Sept. 29, 2014.

Government forces still hold the airport of the biggest city in the combat zone after repelling a one-hour separatist assault this morning, the army said on Facebook.

Ten civilians were killed and nine wounded today in Donetsk, the local council said on its website.

A shell exploded meters from a school where 70 children were in attendance, it said. 

The violence contrasts with comments last week by President Petro Poroshenko that the worst of the war is over as Ukraine focuses on elections next month, securing gas supplies and preparing a bid for European Union membership.

Russia, which denies involvement in the war, said it wants to normalize ties with the EU and the U.S. after being hit by sanctions.

“Policing a cease-fire was alway going to be difficult given the presence of so much armor and of informal forces on both sides,” Tim Ash, a London-based economist at Standard Bank Group Ltd., said today by e-mail.

While rebels continue to shell Ukrainian troops, there were no military fatalities during the past 24 hours, Andriy Lysenko told reporters today in Kiev.

Ukraine is awaiting the delivery of drones that will help monitor the truce, he said. 

Russian Soldiers 

Russian forces and military equipment are still in Ukraine and the two nations’ border remains unsecured, according to U.S. Ambassador to Ukraine Geoffrey Pyatt, who said today on Twitter that Russia and the separatists should abide by the truce.

Since the cease-fire was reached in the Belarusian capital Minsk, the two sides have agreed to establish a 30 kilometer (19 miles) buffer zone between government forces and the rebels and exchange prisoners.

The conflict has killed more than 3,500 people and driven at least 615,000 from their homes, the United Nations estimates.

Nine Ukrainian soldiers were killed two days ago, the most since a Sept. 5 truce.

The fighting has hurt Russian assets.

The ruble weakened to a record against the dollar, losing 0.1 percent in Moscow as the Itar-Tass news service reported that presidential adviser Sergei Glazyev backs the idea of capital controls.

Ukraine’s hryvnia, this year’s worst-performing currency, lost 0.1 percent, as Prime Minister Arseniy Yatsenyuk said his government and state-run energy company NAK Naftogaz had begun the procedure to make a $1.6 billion Eurobond payment. 

Sanctions Stay 

While EU countries delayed the creation of a free-trade area with Ukraine until 2016 at Russia’s urging, they have held fast on refusing to ease sanctions.

The government in Moscow asked the central bank to consider providing foreign-currency swaps to banks, the government said on its website.

Sanctioned companies including state-run oil producer OAO Rosneft (ROSN) and gas producer OAO Novatek have asked for aid.

Russian Foreign Minister Sergei Lavrov has said his country won’t change its position over Ukraine to win a repeal of sanctions.

Ukraine accuses its neighbor of fomenting the unrest near the two nations’ border to prevent it from joining NATO and the EU following the ouster of President Viktor Yanukovych, an ally of Vladimir Putin.

Putin had cited the need to protect Russia speakers in Crimea as justification for Russia’s annexation of the Black Sea peninsula from Ukraine in March.

Today, Deputy Premier Dmitry Rogozin said the same reasoning would prompt his country to defend its citizens in the breakaway Moldovan region of Transnistria, the Interfax news service reported.

‘Long Haul’ 

German Chancellor Angela Merkel said the slight easing of the conflict in recent weeks wasn’t a reason to roll back sanctions.

“I don’t see any change at the moment regarding Russia’s position,” she told reporters in Berlin two days ago.

“Sometimes in history one has to be prepared for the long haul, and not ask after four months if it still makes sense to keep up our demands.”

Merkel, speaking yesterday in Gross-Gerau, Germany, said that while she wants to keep a channel open for talks with the Kremlin, it’s impossible to go back to business as usual with Russia given the situation in Ukraine.

Source: Bloomberg

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