Page 11 - UKRRptFeb19

and their interaction with state bodies, he said. The General Staff conducted large-scale organizational and training exercises to address the threat of military aggression, he added.
“As Concorde Capital CEO Igor Mazepa pointed out, martial law came at a very high price tag for Ukraine. The fact that few preparations were taken to prepare for war during the martial law period, or to actually repel the Russian army from Ukrainian territory, indicates that the measure had more political than military motivations. We believe President Poroshenko knew that Russian President Putin would react exceedingly aggressively to Ukrainian navy ships attempting to cross the Kerch Strait and hoped to impose martial law to delay the March presidential vote. If Poroshenko had not anticipated the November 25 Russian attack, then it would indicate the incompetence of Ukraine’s military leadership.” Zenon Zawada of Concorde Capital said in a note.
“We believe American diplomats, such as US Special Envoy to Ukraine Kurt Volker, advised the Ukrainian leadership not to play with fire by extending martial law, or making similar attempts in the future. Nonetheless, we still believe it’s likely (higher than 50%) that martial law will be imposed again during the election campaign. Poroshenko is desperate to remain in office, and the polls show him trailing far behind his longtime adversary, Yulia Tymoshenko. Postponing elections, or holding them under conditions of martial law, will be under consideration as few alternatives are available (transferring power to Tymoshenko is anathema to Poroshenko). A similar attempt by Poroshenko to seek out a conflict with Russia would have to be less obvious. At the same time, the Russians are likely to react more severely in response to a Ukrainian military challenge, likely targeting military sites on the Ukrainian mainland. So another Russian strike may backfire on Poroshenko, humiliating him ahead of the elections instead of bolstering support for him as the better presidential candidate to defend against Russia.”
2.5 Never Never index of inflation + central bank rates is too high
Sky high inflation has been the bane of emerging Europe for most of the last two and half decades, but the beast has been slain in almost all of the countries of the region.
The first in a series of heatmaps bne IntelliNews t he consumer price inflation (CPI) heatmap shows that inflation is in single figures for almost all the countries in the region.
The problem children in the region that are still battling high inflation are Turkey and Iran, which are both in the midst of economic crises – the former self inflicted and the latter due to new US sanctions.
The real success story has been Ukraine which is recovering from an almost total collapse of its economy in 2015. Encouragingly the heatmap shows that inflation fell to 10% as 2018 came to an end from over 60% in April 2015. The National Bank of Ukraine (NBU) has shown real backbone and made growing-killing rate hikes three times in 2018 putting controlling inflation above stimulating spluttering growth. As a result it has delivered stability and burnished its reputation for independence in the process that will pay off soon when the country goes back to the bond markets in 2019.
But with a few exceptions, almost all of the other countries in the region have inflation at 3% or lower.
11 UKRAINE Country Report February 2019 www.intellinews.com