Politico-Economic Results in May 2014

Abstract

Tensions in the eastern Ukraine were eased a bit in May 2014, although the causes of the confl ict still remain to be resolved. There is a fragile balance today between the Ukrainian military forces and the armed groups of supporters of federalism in Donetsk and Lugansk regions. In the circumstances, Russian leaders made a few conciliatory statements, making it clear that Russia is ready for a dialogue with Ukrainian President P. Poroshenko elected on May 25, 2014. Beside the military issues, there is a serious Russia-Ukraine confl ict over payments for Russia’s natural gas supplies to Ukraine. Russia entered into a contract with China on large supplies of natural gas in the long-run perspective. The profi tability of the contract remains questionable due to the need to build from scratch a new pipeline, however, Russia seems to be seriously interested in China’s potential to fi nance, even now, the Russian economy. The anticipated Treaty on the Establishment of the Eurasian Economic Community covering Russia, Kazakhstan and Belarus was signed, without causing any sensations. Russia made minor concessions but gained its principal point on the impropriety of nulling export du?? es on hydrocarbons in trade relations between the countries.