Western Balkans citizens legally resident in EU equal to 14% of region’s population
International Ice Hockey Federation (IIHF) has stripped Belarus of the right to hold the World Championship this year
Alexei Navalny arrested on arrival as he returns home
LONG READ: The oligarch problem
Russia's National Welfare Fund accounts for almost 12% of GDP
Police arresting activists ahead of Saturday’s demonstration in support of Navalny
Biden seeking a five-year extension to START II missile treaty
Russian consumer confidence index drops q/q, y/y in 4Q20
Western Balkans and Ukraine urged to scrutinise coal subsidies
Oligarchs trying to derail Ukraine’s privatisation programme, warns the head of Ukraine’s State Property Fund
Private finance mobilised by development banks up 9% to $175bn in 2019
VISEGRAD BLOG: Central Europe's populists need a new strategy for Biden
OUTLOOK 2021 Lithuania
EBRD says loan to Estonia’s controversial Porto Franco project was never disbursed
Czech MPs pass protectionist food law in violation of EU rules
M&A in Central and Eastern Europe fell 16% in value in 2020, says CMS report
Hungarian vehicle makers hit by supply chain shortage
COVID-19 and Trump’s indifference helped human rights abusers in 2020
OUTLOOK 2021 Poland
OUTLOOK 2021 Slovakia
BRICKS & MORTAR: Rosier future beckons for CEE retailers after year of change and disruption
FDI inflows to CEE down 58% in 1H20 but rebound expected
Albania needs reforms for e-commerce to thrive, says World Bank
BALKAN BLOG: US approach to switch from quick-fix dealmaking to experience and cooperation
Corona-induced slump in global clothing sector dragged down Albania’s 2020 exports
Bosnia's exports in 2020 amounted to BAM10.5bn, trade deficit to BAM6.3bn
Bulgaria's Biodit first company to IPO on new BEAM market
Bulgaria’s government considers gradual easing of COVID-related restrictions
Sofia-based LAUNCHub Ventures holds first close of new fund on €44mn
Spring lockdown caused spike in online transactions in Croatia
ING: Growth in the Balkans: from zero to hero again?
Labour demand down 28% y/y in Croatia in 2020
EBRD investments reach record €11bn in pandemic-struck 2020
OUTLOOK 2021 Moldova
Storming parliaments: New Europe's greatest hits
World Bank revises projection for Moldova’s 2020 GDP decline to 7.2%
Montenegrins say state administration is most corrupt institution
North Macedonia plans to cut personal income tax in IT sector to zero in 2023
Romania government to pursue “ambitious” timetable for justice reforms
OUTLOOK 2021 Romania
OUTLOOK 2021 Slovenia
Slovenia’s opposition files no-confidence motion against Jansa cabinet
Slovenia’s government to release funds to news agency STA after EU pressure
UK Moneyhub picks Slovenia for post-Brexit European base
D’S Damat franchise deals ‘show Turkey’s hard-pressed mall operators becoming their own tenants’
Turkey’s benchmark rate held as concerns over faltering recovery come to fore
Turkish lira breaches HSBC’s stop-loss, Turkey ETF signalling outflows
CAUCASUS BLOG : What can Biden offer the Caucasus and Stans, all but forgotten about by Trump?
Armenia ‘to extend life of its 1970s Metsamor nuclear power plant after 2026’
OUTLOOK 2021 Armenia
COMMENT: Record high debt levels will slow post-coronavirus recovery, threaten some countries' financial stability, says IIF
OUTLOOK 2021 Georgia
Iran’s Khamenei menaces private citizen Trump with image of aircraft shadowing blond golfer
Iran’s technology minister indicted for failing to properly implement internet censorship
No US move to rejoin Iran nuclear deal imminent, say Biden national security nominees
TEHRAN BLOG: Will Biden bet on a quick return to the Iran nuclear deal?
Central Asia vaccination plans underwhelm, but governments look unruffled
Fears of authoritarianism as Kyrgyz populist wins landslide and backing for ‘Khanstitution’
Mongolia's PM quits amid protests over treatment of mother with coronavirus and newborn baby
Mongolia's winter dzud set to be one of most extreme on record says Red Cross
Mongolian coal exports to China paralysed as Beijing demands virus testing of truck drivers
Mongolia fears economic damage as country faces up to its first local transmissions of coronavirus
OUTLOOK 2021 Tajikistan
OUTLOOK 2021 Turkmenistan
Turkmenistan: How the Grinch stole New Year
COMMENT: Uzbekistan is being transformed, but where are the democratic reforms?
Download the pdf version
Ukrainian President Volodymyr Zelenskiy’s honeymoon has definitively come to an end, as he has struggled to get two bills through the Rada – the land market bill and the so-called anti-Kolomoisky banking bill – to avoid facing a cataclysmic default on the country’s external debt.
Zelenskiy has been riding on a wave of popular optimism ever since his election on April 20, a year ago next week. He coasted to victory with a landslide 73.2% of the vote, crushing his opponent and incumbent Petro Poroshenko in the first round, who won 24.4%.
Now Zelenskiy's support in the Rada is waning, as his own faction, which also won a landslide victory, is fragmenting. At the same time he now also finds himself in open conflict with his mentor and the sponsor of his presidential campaign, oligarch Ihor Kolomoisky.
Zelenskiy’s popularity has been reduced but he still retains more support than any other senior politician; however, the compromises he is now being forced to make will continue to undermine his popularity.
Zelenskiy’s popularity was at 46% in late March, a slight dip compared to February (48%) but a pretty stable trend since a sharp fall in December from a still giddy 60%, according to a poll released by the Kyiv International Institute of Sociology (KIIS) recently.
All these issues were highlighted by the recent votes in the Rada on the two key pieces of legislation. Neither of the two bills is popular. Both are essential if Ukrainian is to secure a new deal with the International Monetary Fund (IMF). And without fresh donor money Ukraine will almost certainly default on its debt and end up losing a decade like Russia did in the 90s. The cost of default for a country already reeling from the war with Russia in the Donbass and the stop-shock of the coronavirus (COVID-19) epidemic would be exorbitant.
Both bills were passed in the first reading during a special session on March 30 but both are heavily laden with compromise. First, the banking bill only just squeezed through, earning 227 votes in the 450-person parliament, despite the fact that Zelenskiy’s faction is 248 strong. That means despite Zelenskiy's call on his faction ahead of the vote, many of his deputies rebelled.
So many rebelled that in the end the bill only passed after former President Petro Poroshenko’s European Solidarity faction and the Golos faction of Ukrainian musician Svyatoslav Vakarchuk added some of their votes to the tally.
Oligarch Ihor Kolomoisky, the former owner of Privatbank, has launched a sustained attack on the government in his efforts regain control of Privatbank, which was nationalised in 2016. In May 2019 the NBU lost a court decision to reverse the nationalisation of Privatbank.
At this stage it appears that Kolomoisky's motivation is not so much as to make even more money after he stole some $5.5bn from Privatbank, but simply to stop the legal cases being brought against him by the now state-owned Privatbank management to recover this money. Privatbank has already won an important decision in the London courts in April that saw $2bn of Kolomoisky's assets frozen, and has recently launched another case in Cyprus to recover $5.5bn. IMF says a total of $15bn has been stolen from banks during the reforms of the last six years, half of that by Kolomoisky alone.
Zelenskiy now finds himself between a rock and a hard place, where whatever choice he had in making up the reform agenda has evaporated as the economy slides into crisis following the double whammy of oil price shocks and the pandemic. That has put him into open conflict with Kolomoisky. Whatever Zelenskiy's original intension was to cater to Kolomoisky’s desires, he now has no choice but to do exactly what the IMF tells him to do or face an economic disaster.
At the same time Zelenskiy needs to rely on his political foes in the Rada – and Poroshenko is chief amongst them – and this has undermined his stance as the “new guy” that doesn't belong to the political elite and was going to be the clean sweeping brush of change. For his part, Poroshenko’s motivation to vote with Zelenskiy's faction on the bank bill can be attributed to the animosity the two fellow oligarchs have long had towards each other.
The compromises surrounding the land bill were also painful, but less extreme. While over 16,000 amendments have been added to the banking bill ahead of its second of three readings in an effort to sabotage the process, the land bill went to the floor with 4,000 amendments submitted to the first draft well ahead of its first reading.
The land bill is supposed to create a land market that should suck in billions of dollars of investment that would see the agricultural sector – one of Ukraine’s biggest export earners – flourish as well as earn the state significant new revenues.
As it was, the bill that was finally approved will do none of that. It limits the size of plots to 10 ha and only private citizens can buy. Laws to cover the corporate buying and selling of land will be worked out later. And laws on selling land to foreigners will have to be put to a referendum.
Even in this watered down version the bill to create a land market is highly unpopular. A recent poll by KIIS found that 60% of those surveyed did not support the Rada’s decision to pass the land market bill. When asked how they would vote in a hypothetical nationwide referendum on agricultural land sales, 74% of respondents said they would vote against opening up the market.
Ukrainians are even sceptical about co-operating with the IMF: only about a third of respondents believed it would be best for Ukraine to submit to a new IMF programme to secure new loans, while another 46% do not think IMF co-operation is the right way to go.
According to Ukrainian journalist Konstantin Skorkin in an analysis for Carnegie Moscow, Zelenskiy had no other option but to get these laws approved and that meant that he had to pay a large political price.
Zelenskiy’s attempt simultaneously to push through the anti-Kolomoisky bill and the land bill was met with even greater resistance from within his own party.
“Poroshenko’s unexpected transformation into some kind of constructive opposition amid the schism in Servant of the People is very dangerous for Zelenskiy, who has built an image for himself as someone who is there to correct the mistakes of his predecessor,” Skorkin said.
“Struggling to hold on to his party’s majority, Zelenskiy is increasingly forced to take heed of the influential national-patriotic minority in Parliament,” Skorkin continued. “Zelenskiy finds himself held hostage by the old elite, from whom he is buying the last chances for reform at the cost of his own political future.”
Reflections from our correspondents on the ground in the Ukrainian capital.
here to continue reading this article
and 5 more for free or purchase
12 months full website access including
the bne Magazine for just $250/year.
Register to read the bne monthly magazine for
Password could contain only
and have 8-20 symbols length.
Please complete your registration by confirming your
A confirmation email has been sent to the email
address you provided.
can't be empty.
No user with
this email address.
Access recovery request has expired, or you are using
the wrong recovery token. Please, try again.
Access recover request has expired.
Please, try again.
To continue viewing our content you need to complete
the registration process.
Please look for an email that was sent to
with the subject line
"Confirmation bne IntelliNews access". This email will have
instructions on how to complete registration
process. Please check in your "Junk" folder in
case this communication was misdirected in your
If you have any questions please contact us at email@example.com
Sorry, but you have used all your free articles fro
this month for bne IntelliNews. Subscribe
to continue reading for only $119 per year.
Your subscription includes:
For the meantime we are also offering a free
digital weekly newspaper to subscribers to
the online package.
Click here for more subscription options,
including to the print version of our
flagship monthly magazine:
Take a trial to our premium daily news
service aimed at professional investors that
covers the 30 countries of emerging
For any other enquiries about our
products or corporate discounts please
contact us at
If you no longer wish to receive
Magazine annual print
Website & Archive
Combined package: web
access & magazine print
Take a trial to our premium daily news service
aimed at professional investors that
covers the 30 countries of emerging Europe: