Introduction by New Cold War.org editors, Dec. 22, 2014

The secretary of the National Security and Defense Council of Ukraine, Oleksander Turchynov, told reporters following a recent meeting with military officials that the Ukrainian government plans to make a “colossal’ increase in military spending in 2015. “Victory is the only option,” he said.

He has also announced three waves of military conscription to take place in January, April and June that aim to draft tens of thousands of ordinary citizens into military service.

At the same time, President Poroshenko has proposed a law to the Verkhovna Rada (Parliament) to abolish Ukraine’s constitutional status as a non-aligned country. [The measure passed first reading on Dec. 23.]

These measures as well as the sharp cuts to social spending being imposed as a consequence of Ukraine’s ‘economic association’ agreement with austerity Europe show the worth of the claims by the government to be interested in ‘peace’ for the country. They also suggest that the government does not intend to prolong into something more lasting the current, on-again, off-again ceasefire with the rebellious people of southeast Ukraine will not last.

All this as Ukraine is facing default on its external debt and another IMF mission is set to return to the country in early January to oversee the drastic cuts underway to government spending in the social sphere.

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Poroshenko Meets Belarus Leader as Ukrainian Peace Efforts Stall

By Volodymyr Verbyany and Daryna Krasnolutska, Bloomberg News, Dec 21, 2014

Ukrainian President Petro Poroshenko has met the leader of Belarus as efforts faltered to agree on a new round of talks with pro-Russian separatists. Belarus hosted negotiations that clinched a cease-fire in September,

The agreements reached in Minsk are the “basis of the peace process in Ukraine,” Poroshenko told Belarusian President Aleksandr Lukashenko today in Kiev. “There’s now no alternative model to de-escalate the situation.”

While the truce has stemmed deaths, which exceed 4,600 since the conflict began after Russia’s (sic) annexation of Crimea in March, no date has been set for a new round of peace talks in Minsk. A negotiator for the breakaway People’s Donetsk Republic said today that he was hopeful a meeting in the Belarusian capital may be held this year, according to RIA Novosti.

See also:

* Ukraine’s minister of security says “colossal” increase in military spending for 2015, by Reuters, Dec 20, 2014

Ukraine plans to spend five percent of its budget or 86 billion hryvnia ($5.5 billion) on the army and on law enforcement in 2015 and to reintroduce compulsory military service, a top security official said on Saturday.

* President Poroshenko proposes law to abolish non-aligned status of Ukraine, on website of President Poroshenko, Dec. 18, 2014

In eastern Ukraine, where another unsteady truce has held since Dec. 9, four government soldiers were wounded in the past day as they came under repeated attacks from their pro-Russian adversaries, according to military spokesman Andriy Lysenko. A convoy of 180 trucks carrying what Russia says is humanitarian assistance arrived in rebel-held cities of Luhansk and Donetsk, the news service Tass reported. Ukraine has expressed concern that Russian relief missions are a guise for funneling weapons and reinforcements to insurgents.

“We don’t want war, we want peace,” said Alexander Zakharchenko, head of the Donetsk People’s Republic, one of two breakaway regions in eastern Ukraine. “But if you want peace, prepare for war.”

Defense spending

Addressing Ukraine’s security council yesterday, Poroshenko urged expenditure on the army of 5 percent of gross domestic product in 2015. The government should target NATO guidelines on military spending and seek to meet the alliance’s entry criteria, he said yesterday in Kiev, the capital.

“The war made us stronger, but has crushed the economy,” Poroshenko said. “There’s one article of spending that we won’t save on and that’s security. Our financial plan should cover force majeure. Our enemy can start a full-scale offensive any minute.”

Ukraine is finalizing next year’s fiscal plan after the months-long conflict ravaged its industrial heartland near Russia’s border. As its economy shrinks and reserves languish at a more than 10-year low, it’s also racing to secure more international aid to top up a $17 billion rescue. Standard & Poor’s said Dec. 19 that a default may become inevitable, downgrading Ukraine’s credit score one step to CCC-.

With official forecasts putting this year’s contraction at 7 percent, the government needs $15 billion on top of its bailout to stay afloat, according to the European Union. To unlock the next tranche of the International Monetary Fund-led package, it plans to submit a 2015 budget by Dec. 23. An IMF mission, which visited Kiev Dec. 9-18, will return early next year.

The European Union and the U.S. are discussing $12 billion to $15 billion in aid to Ukraine and “there needs to be a Russian contribution to the package,” Pierre Moscovici, the 28-nation bloc’s economy commissioner, said at a Bloomberg Government event this week in Washington. A decision is needed in January, he said.