Wednesday, August 27, 2014

Ukraine / Russia situation ( August 27 , 2014 ) -- Daily update on the state of play regarding South East Ukraine battlefield , sanctions watch ( US/EU/Ukraine and Russia ) , Peace Talks / Mediations , Natural Gas Situation....

Ukraine Accuses Russia Of Launching Invasion, Then Promptly Retracts

Tyler Durden's picture

It has been a busy morning: following a substantial surge in Ukraine separatist activity in the past 24 hours, which saw them capture the strategic Sea of Azov port town of Novoazovsk, a move which the NYT classified as "Ukraine Reports Russian Invasion on a New Front", Ukraine has turned on the disinformation spigot to max resulting in a constant verbal, and headline, diarrhea as follows:
So sure was Ukraine that this time (unlike all those previous disinformation launches) Russia has invaded that Anton Herashchenko, adviser to Ukrainian Interior Ministry, actually commented on his Facebook page saying "Invasion of regular Russian army of Putin to Ukraine is an accomplished fact,” Adding that Putin "de-facto places Ukraine on a war-footing at a time when a decree was signed to dissolve parliament."
Well, yes, Ukraine has no government, but Russia of course denied all of it:
All of this latest disinformation propaganda was summarized byReuters best:
Ukraine accused Russia on Thursday of mounting an invasion in the southeast of the country in support of pro-Moscow separatist rebels. Ukraine's security and defense council said the border town of Novoazovsk and other parts of Ukraine's south-east had fallen under the control of Russian forces who together with rebels were staging a counter-offensive.

"A counter-offensive by Russian troops and separatist units is continuing in south-east Ukraine," the council said in a post on Twitter.

President Petro Poroshenko, in a statement explaining his decision to cancel a visit to Turkey, said: "An invasion of Russian forces has taken place."

Russia denies intervening in Ukraine by arming the rebels or sending soldiers across the border. The defense ministry declined to comment on reports of Russian tanks in Novoazovsk.

“The Russian authorities clearly said many times there are no regular Russian troops there. Russia is not taking part in this armed conflict,” said a Russian diplomatic source. The latest escalation in the five-month crisis came only two days after the presidents of the two countries held their first talks in more than two months and agreed to work towards launching a peace process.

Ukrainian Prime Minister Arseny Yatseniuk appealed to the United States, European Union and G7 countries "to freeze Russian assets and finances until Russia withdraws armed forces, equipment and agents". Rebel advances this week have opened a new front in the conflict just as Ukraine's army appeared to have gained the upper hand, virtually encircling the separatists in their main strongholds of Donetsk and Luhansk.

Anton Gerashchenko, an adviser to Ukrainian Interior Minister Arsen Avakov, said on Facebook: "The invasion of Putin’s regular Russian army of Ukraine is now an established fact!"

French President Francois Hollande said it would be "intolerable and unacceptable" if it was proved true that Russian troops had entered Ukrainian territory.
So a lot of words all of which were best summarized by Ukraine'sPrime Minister in dissolutia, Yatseniuk, who as a reminder does not have an official role any more after the Ukraine government was dissolved (on Twitter) last week:
Ok so far so good: accusations, counteraccusations - we are used to that.
But where things once again got surreal, making everyone not only laugh but wonder how the CIA has lost the plotline so badly, was the following "clarification" headline from Reuters, which noticed some rather substantial change in the language on the website of the Ukraine president:
Indeed, instead of explicitly saying a "Russian military invasion has taken place", the website now reads: "I have made a decision to cancel my working visit to the Republic of Turkey due to sharp aggravation of the situation in Donetsk region, particularly in Amvrosiivka and Starobeshevo, as Russian troops were actually brought into Ukraine," the President noted."
For all those wondering if to BTFATH or STFR, please sit tight until Ukraine gets its marching orders from the US State Dept whether to brand the "Russian troops being brought into Ukraine" as an invasion, or merely an accidental crossing, depending on how all of this will impact US strategy in Syria, which all of this is really all about: because remember, if and when the US begins to bomb the Assad regime under the guise it is fighting ISIS, all it will do is greenlight Qatar sending its gas pipeline to Europe... which after all has been the plan all along since 2012.
So stay tuned as this "socially-networked war" comedy unfolds before our eyes.


. reports as pro-Russian rebels enter Novoazovsk in eastern

 Retweeted by 
Senior military officer says there are well over 1000 troops operating inside .

Ukraine calls emergency meeting of its security council over "Russian invasion" - join our live coverage

 Retweeted by 
's President cancels trip to due to troops 'invasion'

Map: Ukraine says Russia and separatists opened up a third front of fighting


A key new front is on the road linking Russia to the Ukrainian port of Mariupol and onto Crimea, Associated Press reports. The excursion raises the fear that the separatists, with the help of Russian forces, are trying to create a land link between Russia and Russian-occupied Crimea.

The Saker...

Fighting for Ukraine's coastline intensifies

Local mayor says pro-Russian rebel forces now in resort town of Novoazovsk, which could give them control of Azov Sea.

Last updated: 27 Aug 2014 20:07

At least three people were killed on a main road when their cars were hit by shrapnel from artillery shells [Reuters]
The battle for Ukraine's strategic coastline has intensified as a local mayor reported that pro-Russian rebel forces entered a key town in southeast Ukraine after three days of heavy shelling.
Novoazovsk, a resort town of 40,000 on the Sea of Azov, lies in a strategically significant location, on the road linking Russia to the Ukrainian port of Mariupol and onto Crimea, the Black Sea peninsula Russia annexed.
Wednesday's incursion was the first time in the four-month-long conflict between the government in Kiev and separatists in the east that fighting has reached as far south as the seacoast.
The new southeastern front has raised fears the separatists are seeking to create a land link between Russia and Crimea.
If successful, it could give them or Russia control over the entire Sea of Azov and the gas and mineral riches that energy experts believe it contains.
Ukraine already lost roughly half its coastline, several major ports and significant Black Sea mineral rights in March when Russia annexed Crimea.
Oleg Sidorkin, the mayor of Novoazovsk, told the Associated Press by telephone that the rebels had entered the town and he had seen dozens of tanks and armoured vehicles roll in.
Sidorkin said the rebels had been positioned near Ukraine's southernmost border with Russia.
The assault on the town has forced government troops to spread their ranks thinner along the Russian border.
A spokesman for Ukraine's security council, Colonel Andriy Lysenko, said "we do not have information that it [Nozoazovsk] is occupied."
In the town of Starobesheve, about 30 kilometres southeast of Donetsk, there were signs of a hasty departure by Ukraine's army.
Locals told the AFP news agency that the troops left on Monday after shelling started from the direction of the Russian border about 30 kilometres away.
Ukraine's military conceded that "militants together with Russian occupants" had taken control of Starobesheve, as well as a string of villages near Novoazovsk, a town on the Azov Sea where clashes had been raging for days.
In Mariupol, a city of 450,000 about 30km to the west, the defences built up.
A brigade of Ukrainian forces arrived at the airport on Wednesday afternoon, while deep trenches were dug a day earlier on the city's edge.
In Donetsk at least three people were killed on a main road when their cars were hit by shrapnel from falling artillery shells.
'Direct intervention'
There is increasing concern in Kiev over Russia's willingness to intervene directly in the conflict with the Ukraine government claiming on Wednesday that a battalion of Russian soldiers had set up a military headquarters near the village of Pobeda, around 50km southeast of Donetsk.
NATO and Polish intelligence also have evidence of regular Russian army units operating in Ukraine, Poland's Prime Minister Donald Tusk told his parliament on Wednesday.
Russian Foreign Minister Sergey Lavrov responded that the Kremlin was "not interested in breaking up" Ukraine, although it does respect two independence referendums from May - in Crimea and the Russian-speaking eastern regions of Luhansk and Donetsk.
Lavrov also confirmed that Russia will send a second aid convoy into Ukraine "in the nearest future" which will be followed by others.
A first convoy was sent to Luhansk last week, and Kiev fears the convoys could provide cover for smuggling military support to the rebels.

Merkel Slams US Hegemony? "America Can't Solve All The World's Problems Anymore"

Tyler Durden's picture

First Russia and China, then UAE, Egypt, and Turkey... and now it appears Germany (following a phone call with Putin) is pulling the rug out from under US hegemony - just as Obama's warmongery ramps up...
Which is odd because just yesterday, President Obama (who never lies) stated "The United States is and will remain the one indispensable nation in the world..." adding that "no other nation can do what we do." Perhaps he is wrong?
“Even a superpower can’t solve all of the problems alone anymore,” German Chancellor Angela Merkel says.
Merkel did not stop there...
Seems like she is returning to the offensive from the defensive...

Ukraine Accuses Russia Of Imminent Gas Cut-Off, Russia Denies, Germans Anxious

Tyler Durden's picture

So much for the Russia-Ukraine talks bringing the two sides together as even Germany's Steinmeier could only say it's "hard to say if breakthrough made." Shortly after talks ended, Ukrainian Premier Yatsenyuk stated unequivocally that "we know about the plans of Russia to cut off transit even in European Union member countries," followed by some notably heavy-on-the-war-rhetoric comments. The Russians were quick to respond, as the energy ministry was "surprised" by his statements on Ukraine gas transits and blasted that comments were an "attempt at EU disinformation."

Russia to halt gas transit to Europe via Ukraine in winter - Ukrainian Premier

"We know about the plans of Russia to cut off transit even in European Union member countries. That's why [Russian] companies were ordered to maximally pump gas to the storage facilities on the territory of Europe," he said before starting the regular Cabinet meeting on Wednesday.

The Premier said that Russia is also forming plans to stop all supplies of energy resources to Ukraine.

"We know about Russia's plans to basically switch off all energy resources for Ukraine," he added.

Yatseniuk added that Ukraine had accumulated nearly 15 billion cubic meters of gas in its underground storages and now deals with diversification of coal supplies to the country, "since the Russian Federation and its mercenaries bomb and destroy coalmines [in eastern Ukraine]."

Besides, Yatseniuk reported that Ukraine hopes to continue the talks and consultations in the trilateral Ukraine-EU-Russia format to address energy concerns.
h/t @Erula1
*  *  *
The Russians responded...
*  *  *
Of course -the question is - does Russia have a 'contractual obligation' with Ukraine if it is not paying the bills...
*  *  *
We leave it to the Germans to summarize the de-escalation...


What is the deal with the Ukie "cauldrons"?

A lot of people are wondering what the deal is with the so-called "cauldrons" in which the Ukie forces seem to get surrounded over and over again.  Are the Ukie generals simply stupid, or what is the deal?  I will try to explain.

Remember that that Ukie forces are typically "heavy".  They have lots of tanks, lots of artillery, lost of ammo, lots of soldiers, etc.  At least initially.  They are also much inferior in terms of tactical skills, morale and willpower.  In contrast, the Resistance forces have dramatically fewer tanks, fewer artillery pieces, much less ammo and less soldiers too.  But their morale is sky-high, their tactical skills excellent and they are fighting on their own land - a big "home turf" advantage.  Add to all this the following: the Ukies are desperately trying to prove to the world that they are "winning" whereas the Resistance is trying to eject an occupying force.  Now if you keep all that in mind, you will very easily understand how these "cauldrons" form.  It typically goes like this:

The political powers in Kiev order the commanders of the so-called "anti-terrorist operation" to show some results.  The latter get together and define what they consider a number of key towns and villages.  They then order their forces to go in and take these towns/villages.  The junta forces move in and with much superior firepower typically destroy a few Resistance roadblocks on the main roads and move to seize the said towns.  At this point they report "mission accomplished - our flag is on the administration of town X".  The BBC picks up the info handed to them by the Ukies and the world learns of yet another Ukie victory.    In the meantime, Ukie terror squads are brought in to smoke out any sympathizers of the Resistances in the occupied towns.  As for the tanks, they are used to protect the Ukie force while their artillery is used long range to terrorize the population of the next town on the list.

Then everything goes down the tubes.

First, a big forces requires lots of petroleum, lubricants, ammo, supplies, food, etc.  But the roads are under constant attack by Resistance forces.  Next, the Novorussians slowly but inevitably bring in some artillery which begins ponding on the Ukie forces.  Gradually, the bigger Ukie forces is forced to dig in while the Resistance take back full control of the main roads and surrounding towns.  That's it - the circle has closed, the Ukies are surrounded and a 'cauldron' has formed.

At that point two things happen: a) the Ukies try to retreat b) reinforcements are sent in to rescue them.  But at this point the density and quality of Resistance forces is sufficient to block the main roads and to prevent both retreats or reinforcements.  In some cases the Ukies succeed in breaking out or reinforcing, but typically at great costs in equipment and lives.  And that brings me to another important point:

The Ukies prefer to fight on the main roads.  The Resistance is at home in the forests, hills, fields and bushes (what the Russian military calls the "The Green").  That means that Ukie movements are very predictable.  Not so for the Resistance.  The Ukies fear the "Green" - the Novorussians love it.  I don't know of a single battle so far in which the Ukies attempted to attack through, or from. the "Green".  The Novorussians do that all the time.

Pretty soon, supplies become a real problem, and with more or less the entire Ukie Air Forces kaput, and the density of anti-air weapons of the Resistance, even large units go from a fighting mode to a survival mode.  At least 4 Ukie death squads are in that mode right now, today.

But remember, the Ukies sill have more armor and more firepower, so it is not that easy to reduce and crush a cauldron - that is why the Resistance needs so much time to eventually finish them off.  They do though, one by one.  If they had the time and forces, they could do it easily, but they don't.

Right now, the main forces protecting Mariupol are all stuck in 2-3 cauldrons southeast of Donetsk.  But instead of wasting time reducing them, the Novorussian Armed Forces have launched an attack along the sea coast towards Mariupol were the Ukies are already in a panic mode as nothing much stands between them and the Resistance.  And this is the correct move for the Novorussians.

Just as in chess a blocked figure is essentially useless, so is a Ukie force in a cauldron.  The important thing is to keep the initiative and press the advantage.  This is why the Resistance is pushing towards Mariupol.  If that city is taken, or even surrounded,  or if the cauldrons south of Donetsk are reduced, that will mean a collapse of the entire southern front of the Ukie attack on Novorussia.

There are risks however.  First, any Novorussian force moved in or towards Mariupol risks been cut off and surrounded by Ukie reinforcements.  Now, I don't know for a fact what the Ukies are up to, but I bet you that there is total panic in Kiev and that reinforcements are sent from all over the country to prevent Mariupol from falling into Novorussian hands.  The Novorussians need to keep a very careful eye over their shoulder (but then, I am pretty sure that the many GRU eyes in space and on the ground are already doing that for them).  Second, the surrounded Ukies can try to join forces and then either break out or attack towards the north.  If they fail, they will probably either do what they have done in the past - run for their lives and abandon all their heavy equipment or fight to the last man.  Either way is fine for the Novorussians.

I hope that the short (and somewhat simplified) explanation above explain, at least in general lines, why and how these "cauldrons" are constantly forming.

Cheers and kind regards,

The Saker

​Europe to depend on Russian gas for at least a decade - Fitch

Published time: August 27, 2014 10:50
Reuters/Gleb Garanich
Reuters/Gleb Garanich
Europe will remain heavily reliant on Russian gas for at least until the 2020s and potentially much longer due to the lack of an alternative, according to a report from Fitch Ratings.
The substitution of Russian gas is not expected, given the weak prospects for shale gas production, the lack of available imported liquefied natural gas (LNG) and the absence of significant pipeline projects in Europe which are independent from Russia, the rating agency says in the report released on Tuesday.
"Any attempt to improve energy security by reducing European reliance on Russia would require either a significant reduction in overall gas demand, or a big increase in alternative sources of supply, but neither of these appears likely," Fitch said in the report.
At best Europe could avoid significantly increasing its gas purchases from Russia, but Fitch's analysis shows that in the long term the EU demand for gas will only increase. An average of 1.3 percent consumption growth per year is expected over the next 15 years, driven by economies’ recovery and the supremacy of gas fired electricity generation over coal and nuclear power.
Fitch expressed its doubts over the shale gas revolution having the same success in Europe as in the US.
"We do not expect meaningful shale production for at least a decade by which time it could at best offset the decline of conventional gas production," The Telegraph cited the full version of the report.
In 2013 the European demand for gas was 530 billion cubic meters, of which Russia supplied 145 billion or 27 percent.
Europe could substitute gas with oil, coal and nuclear power, but all these alternatives are closely connected with economic, political and ecological costs. Overhauling Europe's current infrastructure and making the network more resilient to shocks would cost around €200 billion ($264 billion) with possible risk of higher energy bills.
Moreover, despite being a major gas provider, Russia is also an active supplier of other energy sources to Europe. In 2013 Russia provided 36 percent of the enriched uranium needs for European nuclear power plants, with Bulgaria, Czech Republic, Slovakia and Hungary completely dependent on Russian fuel.
Renewables such as solar power or wind power were also named in the report as alternative energy sources for Europe. However the cost of the projects makes them uncompetitive to the traditional forms of energy generation without government subsidies.

Kiev’s bloody eastern Ukraine campaign LIVE UPDATES

Published time: April 15, 2014 14:19
Edited time: August 25, 2014 18:00

Armed anti-goverment fighters walk in front of garages set ablaze by what locals say was recent shelling by Ukrainian forces in Donetsk August 23, 2014 (Reuters / Maxim Shemetov)
Armed anti-goverment fighters walk in front of garages set ablaze by what locals say was recent shelling by Ukrainian forces in Donetsk August 23, 2014 (Reuters / Maxim Shemetov)
Russia delivered humanitarian aid to the besieged city of Lugansk as fighting between the Ukrainian army and self-defense forces continues in eastern Ukraine. The conflict has claimed the lives of at least 2,000 people and displaced over 300,000.

Wednesday, August 27

05:01 GMT:
Two Crimean journalists, Evgeniya Korolyova and Maksim Vasilenko, said that one of the reasons for their capture by the Right Sector radical group was photos they took of 'the march of prisoners' in Donetsk on Ukraine’s Independence Day.
“When we were stopped at the checkpoint, they first congratulated us on [Ukraine’s] Independence Day, but when they saw those photos they lost control,” said Vasilenko.
One more reason for their detention was the journalists’ accreditation from the self-proclaimed Donetsk People’s Republic.

Tuesday, August 26

15:25 GMT:
The latest UN figures show that the number of killed and wounded in the armed conflict in Ukraine is steadily increasing, the Russia Foreign Ministry said.
“As of August 19, we’re talking about 2,249 people (including at least 23 children) and 6,033 others wounded (including at least 38 children),” the ministry said in a statement.

According to the UN Office for the Coordination of Humanitarian Affairs, the number of internally displaced people in Ukraine has increased to 190,000 (from 156,000 on August 13), the statement said.

As for Ukrainian refugees fleeing to Russia, their numbers rose from 188,000 to 207,000 in the last two weeks, the ministry added.
09:49 GMT:
Russian customs officials from the Veselo-Voznesensk checkpoint have been evacuated due to a shooting in Ukraine.
“Heavy shooting started near the Ukrainian checkpoint Novoazovsk. There was a threat that the ammunition would reach Russian territory. The customs officials have been evacuated to a safe place,” Ryan Fakurshin from the press service of Russian Southern Customs Department told ITAR-TASS.
08:51 GMT:
Night time shelling by the Ukrainian military has reached the Petrovsky and Kievsky districts of Donetsk, resulting in three deaths, according to the city council.
08:49 GMT:
08:36 GMT:
Presidents Putin and Poroshenko could be set to discuss the situation with the recent abduction of Russian news agency journalists in the south-east of Ukraine, RIA Novosti reports.
02:55 GMT:
President of Ukraine Petro Poroshenko in a telephone conversation with Chancellor Angela Merkel discussed his decision to terminate the powers of the Ukrainian parliament, as well as the upcoming meeting of representatives of the EU Customs Union and Ukraine in Minsk, according to the website of the Ukrainian president.
"The two sides discussed separately the president's decision to terminate the powers of the Verkhovna Rada. Parties agreed that this is a step towards the expectations of Ukrainian civil society, as well as a way to strengthen democratic institutions in Ukraine"

Itar Tass.....

Russian Foreign Ministry denies alleged Russia-US ‘secret talks’ on Ukraine

 August 27, 14:47 UTC+4
However, it was not of the nature of consultations between official representatives of the two states, FM says

A stop sign seen in front of Russian Foreign Ministry building in Moscow

A stop sign seen in front of Russian Foreign Ministry building in Moscow

© ITAR-TASS/Gennady Khamelyanin
MOSCOW, August 27./ITAR-TASS/. The Russian Foreign Ministry denied earlier media reports that Russia and the United States were allegedly holding the so-called “secret talks” on the solution of the Ukrainian ongoing crisis and recently held a meeting on the issue on the island of Boisto, located off the southern Finnish coast.
“In connection with reports on some kind of ‘secret talks’ between Russia and the United States on the Ukrainian issue held on the Finnish island of Boisto, we would like to state that an expert meeting did take place there,” the ministry said.
“However, it [the meeting] was not of the nature of consultations between official representatives of the two states, but one of multiple contacts on the level of Russian and American non-governmental organizations and academic societies,” the ministry added.
The ministry said that the participants of the meeting drafted a documented following their discussions and it stated a purely public nature of the talks containing ideas and points of view “concerning the ways to overcome the crisis in Ukraine.”
“On our behalf, we welcome intentions of the public and academic societies to contribute into the resolution of the situation in the Southeast of Ukraine and to put an end as soon as possible to bloodshed encouraged by Kiev authorities’ forceful measures,” the ministry said.
“Such opinion exchanges between the Russian and American non-governmental experts are regularly held on other issues as well,” the Russian ministry added.

Ukraine parliament sends anti-Russian sanctions bill to president for signature

 August 27, 13:04 UTC+4
The bill provides for Ukraine to terminate all trade agreements with Russia, stop all joint projects and industrial programs in certain spheres, including defense and security
Ukrainian parliament in session

Ukrainian parliament in session

© ITAR-TASS/Mikhail Palinchak
KIEV, August 27. /ITAR-TASS/. Ukrainian Parliament Speaker Oleksander Turchynov has sent a bill on anti-Russian sanctions adopted by the country’s legislature to President Petro Poroshenko for signature, the local TV company TSN reported on Wednesday.
The TV company did not specify when exactly the anti-Russian sanctions law had been submitted to the presidential administration.
The Ukrainian parliament adopted a package of anti-Russian sanctions by 242 votes on August 14.
The law gives Ukraine’s National Security and Defense Council the right to block assets, restrict trade operations, stop, fully or partially, the transit of resources, air flights and haulages via the Ukrainian territory; prevent an outflow of capital, suspend the implementation of financial and economic obligations and annul licenses.
In addition, the anti-Russian measures may ban or restrict Russian sea vessels from calling at Ukrainian ports and entering Ukraine’s territorial waters and bar planes from entering the Ukrainian airspace and landing at Ukraine’s airports.
Ukraine is supposed to terminate all trade agreements with Russia, stop all joint projects and industrial programs in certain spheres, including defense and security.
The measures also provide for stopping cultural exchanges, scientific cooperation, educational and sport contacts, entertainment programs; denying visas to the residents of foreign countries and cancelling official visits, meetings and talks for the conclusion of treaties and agreements.
Prior to the final vote, Ukrainian Prime Minister Arseniy Yatsenyuk said that a ban of mail services and restrictions on media and printed editions should be excluded from the anti-Russian package. “Such decisions can be passed in Ukrainian courts,” the premier explained.
At the same time, the Ukrainian government suggested imposing sanctions against 174 Russians and citizens of other states, as well as 65 Russian companies.
“Decisions on this issue should be made by the National Security and Defense Council of Ukraine,” he said.
Proposals on the use of sanctions will be considered by the National Security and Defense Council of Ukraine upon recommendation by the Ukrainian parliament, the Cabinet of Ministers, the National Bank of Ukraine and the Security Service of Ukraine.
Sanctions will be imposed by decrees of the Ukrainian president. The anti-Russian sanctions law will come into effect on the following day after it is published.

Russian, Ukrainian experts to analyze Ukraine-EU deal — minister

 August 27, 14:28 UTC+4
Russia expected to come forward with specific proposals on a possible adjustment of the basic agreement on Ukraine's association with the European Union and the agreement’s supplement by September 12
NAYPYIDAW (Myanmar), August 27. /ITAR-TASS/. Experts from Russia and Ukraine have agreed to meet in Brussels on September 1 to analyze the Ukraine-EU association and free trade deal, Russian Economic Development Minister Alexei Ulyukayev said on Wednesday.
The minister made the statement after a meeting of the leaders of Russia, Belarus and Kazakhstan that form the Customs Union, EU officials and the Ukrainian president in Minsk on Tuesday. The meeting discussed the consequences of the implementation of the Ukraine-EU association and free trade agreement.
Ulyukayev earlier said the first expert consultations on this issue would be held in Moscow later this week.
The economic development minister said earlier on Wednesday that Russia expected to come forward with specific proposals on a possible adjustment of the basic agreement on Ukraine's association with the European Union and the agreement’s supplement by the ministerial meeting on September 12.
"This refers to specific amendments, which we must introduce into the text of the supplement and, I do not rule it out, into the text of the basic agreement," Ulyukayev said.
Economic assistant to the Russian president Andrei Belousov told journalists he did not rule out that expert consultations might lead to an adjustment of the text of the basic agreement on Ukraine's association with the European Union and the supplement to it.
"Within a short period of time, we shall examine those points of the Ukraine-EU association agreement, which cause concern and pose risks to Russia. We shall seek to find some solutions, up to a possible introduction of alterations to the text of the agreement or to its supplements," Belousov said.
The economic aide also said that "the Ukrainian side may agree to the introduction of amendments to the text of the supplement at least". "This applies to duties and a timeframe - such definite adjustments are possible," Belousov said.
EU-Ukraine association deal implications
The Ukrainian economy’s transition to EU standards will cost it billions of euros over ten years while Russia may lose up to 100 billion rubles ($2.7 billion) from its economy’s forced readjustment, Russian President Vladimir Putin said on Tuesday.
“The refusal to use technical norms common in the CIS countries and adaptation to EU standards will cost Ukraine €165 billion within 10 years,” Putin said at a meeting of the leaders of the Customs Union member states, EU officials and the Ukrainian president.
Putin said that Ukraine will lose partnership with the Customs Union member states in a whole number of sectors.
Russia has numerously warned that the obligations, which Kiev will assume in full under the Ukraine-EU association deal for tariff liberalization and the transition to European technical, veterinary and sanitary standards, will inevitably affect the volumes and dynamics of trade and investment cooperation in the Eurasian region, Putin said.
The economies of Russia, Belarus and Kazakhstan will also be affected, Putin said.
“In the most modest estimates, damage to the Russian economy alone may total 100 billion rubles. Entire sectors of our industry and agribusiness will be affected with all ensuing consequences for economic growth rates and employment,” Putin said.
“Losses will also be sustained by Belarus and Kazakhstan,” Putin said.
Estimate of losses from Ukraine-EU association and free trade deal
The Civil Initiative Committee led by former Russian finance minister Alexei Kudrin earlier gave an estimate of possible losses for Russia and Ukraine, if their trade relations deteriorated.
The estimate suggests that Russia may fall short of $4.5-5 billion worth of export revenues annually while losses in the financial, credit and property spheres are estimated at $45-50 billion, if Ukraine refuses to repay debts to Russia, imposes restrictions on Russian entities’ deposits and seizes Russia’s property.
The Civil Initiative Committee estimates Ukraine’s losses at about $100 billion in 2015-2018, including up to $8 billion a year from smaller money receipts generated by labor migrants in Russia, up to $4.2 billion a year from Russia’s possible refusal to give up pipeline gas transit across Ukraine, up to $3.7 billion a year from the risk of the persistence of high Russian natural gas prices, $2 billion from the risk of falling short of Russian investment, $1.6 billion from the risk of a reduced number of Russian citizens’ trips to Ukraine and $400 million from a possible refusal by Russian companies to provide transportation services jointly with Ukrainian operators.

Russia, Ukraine, EU agree to go ahead with trilateral consultations on gas

 August 26, 20:07 UTC+4
Earlier on Tuesday, Russian Energy Minister Alexander Novak said Russia was ready to sell to Ukraine additional gas volumes should Kiev pay for them
MINSK, August 26. /ITAR-TASS/. Russia’s Energy Minister Alexander Novak and EU Energy Commissioner Gunther Oettinger will hold a bilateral meeting on Tuesday night to discuss issues of Russian natural gas supplies to Ukraine and Europe.
“We will discuss the current situation concerning with gas deliveries and transit,” Novak, who is currently visiting the Belarusian capital of Minsk, told journalists. “More detailed talks will be held in Moscow on August 29.
Earlier on Tuesday, Alexander Novak said Russia was ready to sell to Ukraine additional gas volumes should Kiev pay for them.
“We are always ready to sell [more gas] if we receive the money [for it],” Novak told ITAR-TASS.
Ukrainian Prime Minister Arseniy Yatsenyuk said Monday his country needs to additionally buy 5 billion cubic meters of Russian gas for the upcoming winter. Yatsenyuk said the volume of reverse gas supplies from Europe Kiev hoped for will only total 1 billion cubic meters.
Russian state-controlled energy giant Gazprom is implementing the South Stream project to diversify deliveries of natural gas to Europe bypassing Ukraine and reduce dependence on transit countries.
The South Stream Transport B.V. company is an international joint venture organized to carry out planning, construction and subsequent operation of the gas pipeline that will be laid through the Black Sea to Bulgaria and on to Italy and Austria.
Novak cited expert data saying Ukraine will hardly live through the winter without Russian gas.
Gazprom on June 16 switched Ukrainian national oil and gas company Naftogaz to prepayment for gas supplies because Kiev failed to pay part of its gas debt by the deadline of 10:00 Moscow Time on June 16. Gas supplies to Ukraine were halted, but transit volumes were reportedly passing via Ukraine to Europe in line with the schedule.
Gazprom said June 16 that Naftogaz’s past due debt for supplied Russian gas totaled $4.458 billion.
Russia recently raised the gas price for Ukraine to $485.5 per 1,000 cubic meters, but Ukraine has insisted the price should be lowered to that of this year’s first quarter ($268.5 per 1,000 cu m).
The price for Kiev rose to $385.5 per 1,000 cu m in the second quarter of 2014 because Ukraine failed to fulfill its commitments under an additional agreement concluded in December 2013, which obliged the country to pay for supplied volumes of Russian gas in time.
Another raise to $485.5 per 1,000 cu m was due to the cancelation of the Kharkov Accords with Ukraine, which had been struck in 2010 and stipulated that Russia’s lease of naval facilities in Crimea [then part of Ukraine] would be extended by 25 years beyond 2017 - until 2042. The accords also envisioned a $100 discount.