Martial law seen no obstacle to IMF aid for Kyiv: Ukraine update

Author : Bloomberg News Agency

Source : Bloomberg

Russia attacked Ukrainian ships in neutral waters in the area of Kerch Strait
11:58, 26 November 2018

A ship blocks passage under the Crimean bridge over the Kerch Strait on Nov. 25
Associated Press

Russia fired on Ukrainian warships Sunday, wounding several sailors and sparking the dramatic renewal of tensions between the ex-Soviet neighbors near the peninsula of Crimea, which President Vladimir Putin annexed four years ago.

The European Union and the North Atlantic Treaty Organization called on both sides to exercise restraint and demanded Russia ensure free navigation through the Kerch Strait, a key waterway for traffic from both countries. In Kiev, Ukrainian President Petro Poroshenko called a vote in parliament to consider imposing martial law for 4 p.m. Monday, a major step that his government rejected in 2014 when it was in open war with Moscow-backed separatists and forces from Russia.

Martial Law Seen as No Obstacle to Ukraine IMF Aid (11:01 a.m.)

The possible imposition of martial law by Ukraine’s government wouldn’t be an “obstacle” for the country to receive further financial aid under the International Monetary Fund, according to two people familiar with the matter.

The IMF will release an official statement on Ukraine later on Monday. The Washington-based lender will need to study the proposed law on martial law if it’s passed, according to its office in Kiev.

Germany Warns of ‘Terrible Consequences’ (10:51 a.m.)

German Deputy Foreign Minister Michael Roth called on Russia to ensure Ukraine’s access to ports in the Sea of Azov “in accordance with international law.” The situation is “very dangerous” and both sides should avoid pushing an escalation “that could ultimately lead to terrible consequences,” he told broadcaster Deutschlandfunk.

On Sunday, the EU said it expected Russia to restore freedom of passage at the Kerch Strait and to de-escalate the situation immediately. NATO said separately that it’s closely monitoring developments.

Russian and Ukrainian Assets Slide (10:41 a.m.)

The Kerch Strait connects the Sea of Azov to the Black Sea and is a major export channel for Black Sea grain, oil, minerals and timber. Chicago wheat futures climbed 1 percent.

The ruble slid for a second day, falling 0.4 percent to the weakest in almost two weeks. The yields on Russian bonds rose, and the cost of insuring the country’s debt jumped to the highest in more than two months.

Ukraine’s foreign-currency borrowing costs jumped, with the yield on dollar bonds due in 2025 climbing above 10 percent for the first time since March 2016.

Estonia Calls for New EU Sanctions Against Russia (10:31 a.m.)

EU and NATO member Estonia denounced what it called a “full-blown sea blockade” against Ukraine. It called for additional sanctions on Russia and for international observers to be sent to the region. It said Russia was escalating the tensions because of Ukraine’s 2019 presidential elections.

"A full-scale military conflict can begin at any moment,” Estonian Defense Minister Juri Luik says in an emailed statement.

Canada Condemns ‘Aggression,’ More Sanctions Likely (10:00 a.m.)

Canadian Foreign Minister Chrystia Freeland condemned Russia for what called “aggression” against Ukraine and vowed to remain "unwavering in its support" for Ukraine’s sovereignty.

In a research note, Eurasia Group said that a main difference from earlier clashes between Russian and Ukrainian military forces in the latter’s separatist-held east was that Moscow wasn’t denying its role in the fighting.

The incident follows months of complaints from Ukraine that Russia has harassed its vessels as it adds military forces to protect the new bridge over the Kerch straight, which it built to connect the Russian mainland to Crimea.

Chinese Foreign Ministry spokesman Geng Shuang told a briefing Monday that China hopes all parties remain constrained and avoid escalation through talks.

Opposition Legislators Question Need for Martial Law (8:30 a.m.)

Opposition lawmakers accused Poroshenko of seeking to impose martial law in a bid to delay next year’s presidential ballot, after Russia attacked Ukrainian vessels in the Sea of Azov.

“An introduction of martial law all over Ukraine is an excellent chance to manipulate presidential elections and in case of need to apply some dictatorship,” Oksana Syroyid, a legislator from Samopomich parliament group and deputy assembly speaker, said on Facebook.

The possible cancellation of the presidential ballot is a “threat” for the country resembling a “coup d’etat” and will cause “a popular uprising in the streets,” the leader of Radical Party, Oleh Lyashko, said on Facebook.

Ukraine’s National Security and Defense Council proposed to introduce martial law for 60 days. The measure “doesn’t automatically mean” cancellation of the presidential elections scheduled for the end of March, Iryna Herashchenko, first deputy speaker of parliament and a member of Poroshenko’s bloc, said on Facebook.

U.S. Envoy Accuses Russia of Ramming Ukraine Ships (8:15 a.m.)

Kurt Volker, U.S. Special Representative for Ukraine Negotiations, challenged the Russian account of events, appearing to blame Moscow for the conflict in one of the first official reactions from Washington.

“Russia rams Ukrainian vessel peacefully traveling toward a Ukrainian port. Russia seizes ships and crew and then accuses Ukraine of provocation???,” he wrote on Twitter.

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