Ukraine - western media coverage

Ukraine agrees to talks on Moscow-backed plan for eastern regions

Prime minister to chair discussions on OSCE peace proposals day after six Ukrainian soldiers killed in rebel ambush

the Guardian

14 May, 2014

The Ukrainian government has agreed to launch discussions on giving more powers to the regions under a peace plan brokered by the Organisation for Security and Cooperation in Europe (OSCE) – a roadmap backed by Moscow but regarded with scepticism by Kiev.

Ukraine's prime minister, Arseniy Yatsenyuk, is to chair the first in a series of meetings that will include national MPs, government figures and regional officials in line with proposals drafted by the OSCE – a transatlantic security and rights group that includes Russia and the US.

A solution to the crisis in east Ukraine had seemed remote on Tuesday, when six Ukrainian army servicemen were killed in an ambush by rebels and attempts to get Kiev and the armed separatists to negotiate came to nothing.

Ukraine's defence ministry released a statement saying six of its soldiers had been killed and a further eight wounded during an ambush outside the town of Kramatorsk, in Donetsk region. The attackers used grenade launchers and automatic weapons to fire at the Ukrainian column, hitting an armoured personnel carrier.

More than 50 people have died in Donetsk since Kiev began its "anti-terrorism operation" in the area, but Tuesday's attack represents the largest loss of life for the Ukrainian army in a single incident.

The de facto separatist government in Donetsk repeated on Tuesday lunchtime that the Ukrainian army was considered to be an "occupying force", and the ambush appeared to be a bloody restatement of their case.

The "Donetsk People's Republic" was proclaimed on Monday, after a hastily arranged referendum resulted in nearly 90% of votes in favour of state sovereignty. Critics have pointed out that there were no observers and that most of those who remain loyal to Kiev simply stayed at home. Nevertheless, the region announced independence and immediately appealed to Russia to accept it as a new region.

The Ukrainian government and western powers have rejected the referendum as a sham.

In Brussels on Tuesday, Yatsenyuk thanked the OSCE for its plan but said Ukraine had its own proposals for ending the crisis and that the people of his country should settle the issue themselves. He disclosed no details of that plan.

The self-proclaimed Donetsk republic took its first tentative steps on the international stage on Tuesday, imposing sanctions on three individuals – the US president, Barack Obama, the German chancellor, Angela Merkel and the EU foreign affairs chief, Catherine Ashton – who are banned from entering the territory as well as flying over it. The reason given is that they support the Kiev government's operation's against armed separatists in the east of the country.

In a document, the separatists also gave David Cameron a sharp warning, saying: "PS British prime minister David Cameron is on a provisional list (without the sanctions being enforced in practice) and is advised to think carefully about his attitude to the Kiev junta, especially given the traditional good relations between Britain and the Donbas region."

Donetsk was founded by a Welshman, John Hughes, in the 1870s, and for a time the city even bore his name.

Ukraine crisis: Talks held in bid to curb violence

Bear with the Christian “end-of-days” bias here

US Holds Massive Nuclear Drills amidst Ukraine Crisis

Ukraine Just Issued $1 Billion Bonds Backed By The US Taxpayer

Zero Hedge

14 May, 2014

The bailout floodgates are open and the US taxpayer is footing the bill once again - whether through IMF loans or more directly. Today saw Ukraine issue $1 Billion 5-Year Notes at a stunningly low risk of only 28bps above US Treasuries and dramatically cheaper than the cost of capital in the public markets (and from the IMF) which yield over 10%. The reason for the 1) low cost, and 2) actual ability to raise debt... the bond is guaranteed by the US Agency for International Development and "assures full repayment of principal and interest" based on the full faith and credit of the US (Taxpayer). We assume Gazprom will be happy...

• *UKRAINE $1B 5Y NOTES LAUNCH AT +28

So why not pile into these bonds? 28 extra basis points for no apparent additional credit risk... some liquidity risk but we are sure your friendly local central bank will enable you to swap them for infinitely rehypothecatable cash with no haircut...

They're gonna need moar... (and this does not include Gazprom)

Oh and Ukraine says "thanks America"... (as WSJ reports)

"The $1 billion loan guarantee that (U.S. Agency for International Development) will implement will help the government of Ukraine access capital at reasonable rates and manage the transition to a prosperous democracy," Mark Feierstein, assistant administrator at USAID, said in April.

 

"The guarantee assures investors of full repayment of principal and interest."

 

The deal follows similar guarantees provided for bonds issued by Tunisia in 2012 and Jordan last year.

But - there is a catch...

Bank of America Merrill Lynch said Tuesday that Ukraine's bondholders could face losses if separatists in the country's southeastern regions successfully gain independence.

 

The bank said a breakup of the country could potentially force the International Monetary Fund to tear up Ukraine's current $17 billion aid package and trigger a debt restructuring program that would hit private investors. An IMF spokesperson said the fund is monitoring the situation.