Ukraine government in crisis but fighting in the east continues

Submitted by AWL on 30 July, 2014 - 12:33 Author: Dale Street

The Svoboda (neo-fascist) and Udar (right-wing) parties resigned from Ukraine’s coalition government on 24 July. A few hours later the Prime Minister, Arseniy Yatsenyuk, announced his resignation as well.

Svoboda’s stated reason for pulling out of the coalition was: “A parliament which protects state criminals, Moscow’s agents, and refuses to strip (parliamentary) immunity from those who work for the Kremlin should not exist.”

Udar’s stated reason for pulling out was: “We see that the Verkhovna Rada (Parliament) is not set for constructive work in accordance with the will of the Ukrainian people.”

Yatsenyuk based his resignation on the fact the Svoboda/Udar withdrawal from the coalition left the government without a parliamentary majority. This was reflected in the parliament’s refusal to back a package of budgetary ‘reforms’ proposed by Yatsenyuk the same day.

The “reforms” in question involved yet another attack on the already crumbling living standards of the majority of Ukrainians. Imposing cuts in public spending — apart from military spending — is a condition imposed by the IMF before it releases a further tranche of a $17 billion loan.

The state budget deficit for 2014 currently amounts to 14.5 billion hryvnia. Inflation is expected to remain at around 20%. Ukrainian GDP is set to decline by a further 6%, or, in the worst case scenario, by around 10%.

The Ukrainian economy has been weakened still further by the fighting in the south-east, which accounts for around 15% of Ukraine’s GDP and 25% of its industrial output. The fighting has resulted in a slump in output, and widespread damage to the industrial infrastructure.

The daily cost of the conflict runs to some three million dollars. Overall, the costs of the war in the south-east are expected to run to a billion dollars.

After Russia’s annexation of the peninsula in March, the Crimea is no longer a source of revenue for Ukraine. And, unsurprisingly, the level of trade between Ukraine and Russia in recent months has slumped dramatically.

On the eve of the parliamentary vote on the proposed cuts the Federation of Trade Unions of Ukraine (FTUU) wrote to all Ukrainian MPs, urging them to vote against the cuts.

The cuts included: powers to suspend employment law protection; changing, for the worse, the indexing of pensions and other welfare benefits; powers to impose cuts in daily working hours and compulsory unpaid “holidays” on state employees; and freezing the already low rate of the minimum wage.

However weakly, FTUU leader Sergei Kondryuk warned: “If the Rada does not listen to our appeals and adopts these proposals, trade union members are calling on us to stage serious protest activities.”

The Rada did reject the proposals. But certainly not in response to the FTUU’s appeal, nor out of any concern for the impact of the budget cuts on Ukrainian workers.

Even before the collapse of the coalition government, it was likely that parliamentary elections would be held in Ukraine this autumn. (The government’s collapse makes this more likely.)

Rather than enter the elections as members of a government which imposed another savage round of spending cuts, Svoboda and Udar can now enter them as parties which brought down the government rather than vote for cuts.

By resigning, Yatsenyuk has also avoided responsibility for the cuts. By the time of the elections he will doubtless declare that whatever cuts have been imposed are far worse than anything he suggested.

While the country’s oligarchic and kleptocratic parliamentarians manoeuvred for electoral advantage, fighting intensified in the south-east.

Militarily, the separatists are on the defensive: more and more territory is being lost to the advancing Ukrainian forces.

Politically, the separatists are even more on the defensive.

Evidence continues to mount that they shot down the Malaysian Airlines Boeing 777 (not realising it was a passenger plane). Evidence of external Russian military support for the separatists also continues to mount.

Propaganda-wise, the separatists are doing just as badly: Contrary to their claims, the Ukrainian authorities are clearly not committing “genocide” (sic) as they advance, and whacky conspiracy theories advanced by separatist leaders and supporters about the downing of the Boeing 777 undermine their credibility even more.

But the biggest losers are the civilian population in what are now the main areas of fighting: the densely populated cities of Gorlovka, Donetsk and Lugansk. A tweet by one inhabitant of Donetsk succinctly summed up their plight:

“Artillery fire can be heard every night in Donetsk. Shelling comes from both sides. Civilians suffer. Many people flee in recent days.”

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