Scorched Earth Policy
Last week, the government in Ukraine cut off pensions benefits to residents of
rebel-held areas until such time as these areas return to Ukrainian control.
Yesterday, in yet another scorched-earth policy move, president Petro
Poroshenko announced Ukraine Rebel Areas to Lose State Services.
Ukraine's president has ordered the
withdrawal of all state services, including funding for hospitals and
schools, from rebel-held areas.
Mr Poroshenko's ruling says all state companies and institutions should end
their work in the Donetsk and Luhansk regions within a week.
It also says Ukraine's central bank is to close down all banking services -
including card operations - in some areas within a month.
Initial Thoughts
- Poroshenko just ceded major portions of Ukraine to
rebels
- Expect a run on ATMs
- Russia will have to intervene for humanitarian reasons
- Western Ukraine will have a difficult time getting
needed coal from the East
Point number two is happening already.
I picked this up from ZeroHedge Ukrainians Line Up to Withdraw Money from a
Bank in Donetsk.
That's a small line now. I suspect it soon won't be.
Human Rights Violations
Here's some additional details on Poroshenko's Bank Servicing Decree.
"National bank of Ukraine [shall] adopt measures
within one month to stop serving bank accounts, including card accounts, that
belong to economic entities… and residents in the territories of anti-terror
operation in Donetsk and Luhansk regions," the decree said.
Poroshenko asked the government Saturday to keep the Council of Europe
informed on Kiev being forced to take steps violating the European Convention
for the Protection of Human Rights in Donbas.
"To the Ministry of Foreign Affairs of Ukraine… together with the
Ministry of Justice of Ukraine… to ensure that within a week in accordance
with the article 15 of the [European] Convention for the Protection of Human
Rights and Fundamental Freedoms… a statement on behalf of Ukraine about Kiev
taking measures derogating from its obligations under the Convention for the
Protection of Human Rights on the several territories of the area of special
operation in Donetsk and Luhansk Regions, is sent to the Secretary General of
the Council of Europe," the decree said.
Expect Major Rebel Advance
Reader Jacob Dreizin, a US citizen who speaks Russian and reads Ukrainian,
offers these thoughts via email.
Hello Mish,
I am tentatively calling for the start of the rebel offensive for on or about
Friday, November 21st.
I may be wrong on the "when", but I will be right on the
"how".
I expect the rebel offensive will be similar to the one in late August to
early September and it will proceed in a direction or directions unexpected
by Kiev and its CIA handlers.
The outcome will be that Kiev will lose almost all of its remaining heavy
weaponry.(Over half was already lost by early September, according to both
the rebels and Poroshenko himself.)
Most of the major population centers of Ukraine's Donetsk and Lugansk
provinces that have not yet come under rebel control, will come under their
control. This will demoralize the remaining Ukrainian troops.
Once that happens, Kiev has no strategic reserve and nothing to stop the
remaining areas of historic Novorossia from being overrun or simply breaking
off on their own accord. So this will not be a "long retreat." Once
the tension snaps, things will be decided very quickly.
Then there will be a slowdown for winter. The winter will be so brutal
for Ukraine that by the time spring comes, the rebels believe they will
simply waltz into neighboring regions without much effort and be welcomed as
liberators. On that point, we shall see.
Major Mistake?
To combat alleged terrorism, Kiev announced it can suspend article 15 of the
Convention for the Protection of Human Rights and Fundamental Freedoms.
Lovely.
If Ukraine was looking to give Russia a humanitarian reason to invade, it
just did.
Is this a brilliant play by Poroshenko to trap Putin into invading, or was it
just plain stupid?
Only the final outcome will tell. But one thing's for certain now:
Poroshenko stirred up major resentment against Kiev, not the rebels, with his
decree.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
