Hmmm... It seems that -- contrary to earlier reports -- a Mistral deal has not been done and dusted after all (from RFE/RL's news desk):
President Francois Hollande has denied claims by Moscow that France has agreed to pay compensation to Russia for cancelling the sale of two Mistral warships.
Earlier on July 31, a top aide to Russian President Vladimir Putin said that a refund deal was reached between Russia and France.
Hollande, however, told reporters on July 31 that "discussions are under way. I will make a decision in the coming weeks."
The deal was worth $1.3 billion.
The delivery of the two warships was put on hold by Paris in September 2014 in response to Russia’s illegal annexation of Crimea and its support for pro-Russian separatists in eastern Ukraine.
The contract, which was signed in 2011, was meant to be the biggest arms sale ever to Russia by a NATO country, with the first of the ships due to be delivered to Moscow in 2014 and the second in 2015.
France had come under strong public pressure from its European partners and the United States to abandon the deal.
(AFP, AP, TASS, rian.ru, Bloomberg, BBC)
It seems Vladimir Putin will be heading to Crimea soon for one of his notorious "action man" stunts:
Russian President Vladimir Putin intends to participate in an archaeological expedition to the annexed Crimean peninsula in the coming weeks, according to reports in Izvestia and other Russian media.
Putin's spokesman, Dmitry Peskov, told RIA-Novosti on July 31 that he could not "yet" confirm the report. However, Peskov was the original source of the news, apparently mentioning it to journalists on July 29.
According to Izvestia, Putin will make the trip under the auspices of the Russian Geographic Society, of which he is the chairman of the Board of Trustees (Russian Defense Minister Sergei Shoigu is the president of this "all-Russian nongovernmental organization").
The Russian daily says details of the expedition are being kept secret, but that it will focus on archaeological sites related to the historic Silk Road and an antique shipwreck in the Black Sea.
Read the entire article here
Katya Gorchinskaya and Serhiy Andrushko from RFE/RL's Ukrainian Service have been looking at the possibility that a former Ukrainian official from the Yanukovych era might be on the lam in alligator shoes:
As former Ukrainian official Mikola Zlochevskiy runs from the new authorities in Ukraine, he might be doing so in his own brand of highly fashionable, exotic-leather shoes.
Zlochevskiy earned a reputation for lavishness while serving as environment and natural resources minister under ousted President Viktor Yanukovych. In December, he was placed on Ukraine's most-wanted list for a host of alleged economic crimes.
So when that same month a new upscale shoe and apparel boutique opened in Kyiv, with a trail of ownership that appears to lead back to Zlochevskiy, it raised some eyebrows.
Read the entire report here
We are now closing the live blog for today. Until we resume again tomorrow morning, you can keep up with all our ongoing Ukraine coverage here.
Good morning. We'll start the live blog today with an update on the situation regarding Ukraine's debt (from RFE/RL's news desk):
The International Monetary Fund (IMF) has approved a second installment of loans for Ukraine despite uncertainties raised by the country's heavy debts and conflict with Russian-backed separatist forces.
The IMF executive board said on July 31 that it would immediately disburse $1.7 billion, part of a $17.5 billion support program awarded in March that is linked to economic reforms that Ukraine has started to carry out.
David Lipton, the IMF's first deputy managing director, said that the Ukrainian authorities had made a "strong start" on a tough reform program requiring it to simultaneously tackle debt, corruption, and inefficiencies in its governance.
"The momentum needs to be sustained, as significant structural and institutional reforms are still needed to address economic imbalances that held Ukraine back in the past," he said.
Ukraine welcomed the new loan, saying it will be used to replenish the National Bank's depleted reserves.
"The new tranche will encourage growth in the economy and reassure financial markets both domestically and internationally," the Ukrainian finance ministry said.
But the task is Herculean. Deprived of the heart of its industrial sector in the eastern part of the country, which has been seized by Russian-backed rebels, the Ukrainian economy is expected to plunge deeper into recession this year. The government is projecting a huge 9.5 percent contraction in output.
As the economy shrinks, the country's debt appears on course to reach nearly 135 percent of output this year, compared with about 70 percent in 2014.
Under its charter, the IMF can only provide financing if a country's debt is "sustainable with high probability" -- a test that seems increasingly out of reach for Ukraine.
To resolve this headache and satisfy the United States, its largest shareholder, the IMF said that Ukraine needed to find $15.3 billion in debt relief from private creditors over the coming four years.
But debt negotiations with Ukraine's biggest creditors in the past four months so far have produced no concrete results.
The creditors, led by U.S. investment firm Franklin Templeton, this week proposed a debt reduction of 10 percent, far below the 40 percent "haircut" sought by Kyiv.
Ukraine warned the creditors on July 31 that the end of next week is the "absolute last deadline" for a debt restructuring deal.
After next week, Ukraine has said it could impose a "moratorium" on debt payments -- another word for default. Ukraine says it would be unable to make a $500 million bond payment coming due on September 23.
Lipton reiterated that the IMF is prepared to continue its loan program even if debt negotiations with private creditors flounder.
"In the event that talks with private creditors stall, and Ukraine determines that it cannot service this debt, the Fund could continue to lend to Ukraine consistent with its Lending-into-Arrears Policy," he said.
U.S. Treasury Secretary Jacob Lew said the United States "strongly supported" the IMF's latest disbursement to Ukraine.
Like the IMF, the Treasury has been pressuring Ukraine's creditors to reduce their demands.
"We urge the creditors participating in the ongoing debt operation to reach a timely agreement with the Ukrainian authorities that fully satisfies the criteria outlined in Ukraine's IMF program -- including the debt sustainability target," Lew said.
The IMF overall has been pleased with Ukraine's progress, given the many obstacles the struggling country faces.
IMF Director Christine Lagarde this week contrasted Kyiv's strong efforts to enact reforms with the lack of cooperation from Greek authorities. The IMF has been more lenient toward Ukraine as a result.
Ukraine's biggest worry is a $3 billion Eurobond that Russia purchased in 2013 after a now-deposed Ukrainian government bowed to Kremlin pressure and rejected an association pact with the European Union.
Moscow has refused to join the debt negotiations and demands the full amount back by a December 20 deadline.
Western investment houses, despite as yet unresolved differences with Kyiv over how much of its debts can be paid, have been taking a far more compromising stand than Moscow.
(AFP, Reuters)