December 17: Russia, Ukraine Achieve Breakthrough into Future
Arhive | 19.12.2013

December 17: Russia, Ukraine Achieve Breakthrough into Future

Victor KRYLENKO - Independent analyst and researcher

The sixth session of the Russian-Ukrainian interstate commission in Moscow and the meeting of Vladimir Putin with Viktor Yanukovych on December 17 yielded the results to make one say with confidence that a revolutionary step forward is made in the relationship between the Russian Federation and Ukraine.  The parties signed 14 documents to spur the process of mutual cooperation.

A production cooperation protocol for 2014 incorporates commodities (and services) free of value added tax and excise payments, the list includes raw and other materials, manufactured goods and services required for joint production of finished products which are either not produced in Russia and Ukraine, or the production quantities fail to meet the needs of internal markets. This is a real step forward made to upkeep cooperation links and Ukrainian producers. It’s worth to note that the production facilitiesin questionwould be hard-hit (perhaps they would even stop functioning at all) in case the Association Agreement with the European Union were signed.

The parties concluded an agreement to design a bridge across the Kerch Strait. It envisions preparatory joint steps, a creation of intergovernmental Russia-Ukraine working group with defined authority and defining the phases of project’s implementation. This is a multibillion venture of great importance for the transportation system of the both countries. The cost is 24 billion in rubles calculated in 2010 prices, the implementation period is 4-5 years. 

One more conceptual document signed is the action plan to settle restrictions in bilateral trade in 2013-2014. The parties plan to liberalize access of goods to each other markets significantly increasing the flow of Ukrainian products to Russia and the member-states of the Customs Union. The work load for Ukrainian producers will sharply increase creating new working places, said Putin.    

A Memorandum of intentions on cooperation in shipbuilding envisages coordinated scientific research efforts to jointly produce equipment up to contemporary standards

 One more agreement may revive the Ukrainian airspace industry. The parties signed an agreement on government support for resuming the serial production of Antonov An-124 planes with various versions of the D-18T engines, including maintenance, upgrade, follow-on and increasing service life of An-124 aircraft and engines.   

Another agreement concluded is the Memorandum between the governments of the two countries on cooperation in the space sector signed by Ukrainian State Space Agency and Russian Federal Space Agency. It envisions joint space research efforts for the following four years. 

Russia’s aid in the construction of the third and fourth units of Khmelnitsky Nuclear Power Plant is an issue for discussion. As to Putin, as economic and political ties get closer, Russia seeks to involve Ukrainian economy in its defense programs, including repair and maintenance. It will give a new lease on life to half dead Ukrainian military industry.

A protocol amending the agreement on cooperation in the implementation of joint control over people, vehicles and goods on the Ukrainian-Russian state border is of vital importance for millions living in border areas. 

A protocol of the sixth Russia-Ukraine interstate commission mentions intensification of activities aimed at implementation of road maps, including joint ventures in the industries of priority: airspace, propulsion plant engineering, nuclear, space, shipbuilding and transport (put in bolds by author).  It all presupposes creating new working places in the Russian Federation as well as Ukraine.  

The addenda to contracts for the sale, supply, volume and terms of transit of natural gas are the accords of great importance.The parties agreed to reduce the gas price by about one-third from the current $400 per 1,000 cubic meters to $268.50 per 1,000 cubic meters. President Putinsaid Russia met Ukraine halfwayin view of the difficulties it encountered while fulfilling the conditions of current contract.  At that, he noted the decision is “temporary”; there are long-term contracts to be concluded ahead.  

Aside from reducing the gas price, Russia would grant a direct loan by purchasing $15 billion in Ukraine's Eurobonds. "For the purpose of supporting the Ukrainian budget the Russian government has made a decision to invest part of the National Welfare Fund, to the tune of $15 billion, in Ukrainian government securities,"Putin. The Russian President emphasized that the decision to buy the Ukrainian securities wasn't contingent on Kiev freezing social payments to its citizens.

The leaders of two states told their respective governments to come up with a memorandum on aligning the Ukraine’s and the Customs Union’s technical standards. The cabinets are to prepare proposals on Ukraine’s interaction with Eurasian Development Bank, the Eurasian Union Anti-Crisis Fund and Community of Independent Nations’ Interstate Bank.     

Moscow offered to Ukraine everything the West refused to give. The implementation of the concluded agreements will make the Ukrainian economy get back on track. After having been under the International Monetary Fund’s pressure, the social welfare will be revived. The accords signed in Moscow are filled with convincingly concrete and mutually beneficial substance, something the authors of the Association Agreement with the European Union could not even dream of.

Tags: Russia  Ukraine  Putin  Yanukovich