Politico -Economic Results In June 2014

The situation in eastern Ukraine and Russian-Ukrainian interstate relations saw a certain de-escalation in June 2014. In particular, Russia recognized new Ukrainian President P. Poroshenko. However, the situation remains to be tense. The east Ukrainian armed groups cannot see how they may exist within a unifi ed state while the government in Kiev cannot allow a secession of these regions. The Russian government authorities are looking for a way out of the crisis, without losing face, but it hasn’t been found yet. At the same time, gas price negotiations between Russia and Ukraine reached no agreement. Russia announced transitioning to prepayment for natural gas supplies to Ukraine. Considering gas volumes accumulated by Ukraine, negotiations on this subject matter are likely to become more relevant in the upcoming fall. Ukraine cannot be excluded from Russia’s natural gas transit, at the same time it won’t be able to strike its fuel balance alone, without Russia. A fi erce dispute on what should be done with the 2014 pension accruals, virtually pension savings as such, began in the Russian Government. The standards of potential infrastructural costs of the National Wealth Fund (NWF) were increased, however, new costs till remain to be agreed.