Ukraine’s parliament passed a series of sweeping reforms of the country’s gas sector yesterday ahead of this weekend’s Orthodox Easter, raising hopes that the fight against entrenched corruption and the interests of powerful oligarchs is making sustained progress. The Financial Times:
Approved by a majority of almost two-thirds, the “natural gas market law” aims to boost competition and transparency in one of the most troubled sectors of Ukraine’s recession-battered and war-torn economy.
Described by one lawmaker as a “moment of truth” demonstrating parliament’s determination to break the longstanding hold of oligarchs over Ukraine’s politics and economy, the new law brings Ukraine’s gas market into line with the EU’s Third Energy Package, which aims to boost competition in the energy sector.
This is very big, and very good news, but it’s still too early to celebrate. The economic situation remains dire, and the reforms are being pushed through as part of a set of laws demanded by the IMF in exchange for the funds that are keeping Ukraine afloat. And just barely afloat, at that: as the reforms were being passed, Metinvest, a massive steel and mining conglomerate with assets in the war-torn eastern part of the country, announced that it was defaulting on $113 million in debt and that it recorded an 18 percent drop in revenues in 2014.
Add to these stiff economic headwinds the distinct possibility of hostilities resuming with Russian-backed separatists (something Vladimir Putin can always resort to if things start going too well in Kyiv), and it’s clear that Ukraine faces a very steep climb ahead of it.