'Backed Into A Corner': In Negotiating Prisoner Swap With Russia, Ukraine's Zelenskiy Faces Tough Decision

To hand over to Russia a Ukrainian man who the Dutch-led MH17 investigation team has said is a "person of interest" in the downing, or not -- and risk angering Ukrainians who want to see dozens of their compatriots come home. This is the question Volodymyr Zelenskiy must answer. Whatever he decides, he will likely face harsh criticism. By Christopher Miller

This ends our live blogging for September 6. Be sure to check back tomorrow for our continuing coverage.

U.S. sends delegation to Ukraine to prepare for gas cutoff:

By RFE/RL

The U.S. Department of Energy is sending a delegation to Ukraine to help the country address a possible energy shortage this winter as Russia seeks to end gas transit.

The U.S. energy specialists will work with Ukrainian counterparts to study the country's energy generation, transmission, and distribution and develop a "winter action plan," the Department of Energy said in a statement on September 6.

The announcement follows a meeting between U.S. Energy Secretary Rick Perry and members of Ukrainian President Volodymyr Zelenskiy's administration on August 31 in Warsaw to discuss energy security. The delegation was requested by the Ukrainians, the statement said.

Russia is seeking to launch two new pipelines next year to carry gas to Europe via Germany and Turkey. The pipelines would eliminate Russia's need to ship gas through Ukraine to meet European needs, potentially leaving the country short of energy in the winter.

"This team will help ensure that the Zelenskiy administration and government of Ukraine is best equipped to ensure Ukraine is never again vulnerable to threats of supply disruption from Russia," the statement said.

Natural gas accounts for about a quarter of Ukraine's annual energy consumption, according to a 2018 report by PwC. Coal and nuclear account for more than half.

Perry was accompanied on his trip to Warsaw with executives from U.S. companies involved in the nuclear, coal, and gas industries.

Russia cut off gas to Ukraine in the winters of 2006 and 2009 amid price disputes.

Russia for years had sold gas to Ukraine at discounted prices to ensure loyalty to the Kremlin, but that changed as Kyiv pursued a policy of closer relations with the west.

Ukraine imports about one-third of its gas needs. The country has struggled to increase its own domestic gas production though it sits atop large reserves. Ukraine is not expected to produce enough gas to meet its own needs until the end of the next decade.

Ukraine's ratings upgraded by Fitch as debt declines, IMF deal likely:

By RFE/RL

Ukraine's improving financial stability and renewed commitment to reform has pushed a leading Wall Street firm to upgrade the country's debt ratings.

New York-based Fitch Ratings raised Ukraine's long-term foreign- and local-currency debt to B from B-, the company said in a statement on September 6. The rating is still five notches below investment grade.

Ukraine's government debt as a percentage of its economy is expected to end the year at slightly below 50 percent, compared with 69 percent just three years ago, Fitch said. It expects the public-debt ratio to decline further over the next two years.

At the same time, the country is expected to reach a new loan deal with the International Monetary Fund (IMF) to help meet a spike in debt repayments in 2020 and 2021. The IMF loans are tied to commitments to undertake economic policies, such as land and gas reform.

"Ukraine has demonstrated timely access to fiscal and external financing, improving macroeconomic stability and declining public indebtedness, while a shortened electoral period has reduced domestic political uncertainty," Fitch said in the statement.

President Volodymyr Zelenskiy, who was swept to power on a mandate to fight corruption and attract foreign investment, called snap parliamentary elections in July, which gives the new government more time to negotiate with the IMF.

The parliamentary elections were initially scheduled for October.

Fitch described the new cabinet as including "technocratic, pro-Western, and reform-minded ministers." Among them are some key economic officials from the previous government, such as Finance Minister Oksana Markarova, which will help ensure some policy stability.

"Expected macroeconomic policy continuity, the new government's strong stated commitment to structural reforms and engagement with IIFs [international financial institutions] mean that Fitch expects further improvements in creditworthiness," the rating agency said.

Fitch said risks to its positive outlook for Ukraine include failing to carry out the reforms under the IMF deal and the new administration's reported ties to tycoon Ihor Kolomoyskiy.

The firm said Ukraine had a "weak record" in completing reforms.

Kolomoyskiy, a businessman who owns metals and energy assets in Ukraine, backed Zelenskiy's candidacy. The tycoon's former lawyer, Andriy Bohdan, is head of the presidential administration.

Kolomoyskiy is fighting the state to recover PrivatBank, a leading lender that was nationalized by the previous government in 2016.

"Although the reported links between the new administration and [Kolomoyskiy] pose a downside risk, Fitch does not expect these to prevent a new IMF program and progress with structural reforms," the firm said.