Ukraine

To summarize: in an act of complete disregard for the official diplomatic song and dance, both Israel and the US are now providing military support to Iran, which in turn is providing military support to Syria, which is also getting military support from Russia. And now, just to make things more interesting, the same labyrinth of "military support" is about to be unleashed in the Ukraine, whose western half is just as likely getting arms and military equipment (not to mention funding)from the West under the table, while Russia, whose main Black Sea port is in the Ukraine's Crimean peninsula, is arming the Eastern part of the Ukraine.

What can possibly go wrong?

Many have been surprised by the lack of public response by Russia to the ongoings in Ukraine. Aside from some comments by Siluanov, the response has been concerning in its absence from the iron fist. However, quietly and with little new coverage, RiaNovosti reports that the combat capability of Russia’s naval task force in the Mediterranean will increase significantly - for the first time in decades - following the first deliveries of Varshavyanka-class submarines (with advanced stealth technology dubbed "black holes in the ocean") to the Black Sea Fleet.

"There is no money in Ukraine's Treasury account," exclaimed 'Interim President' Oleksandr Turchynov to the Ukrainian parliament; adding that the Ukraine economy is in a "catastrophic state."

*THERE ARE PROBLEMS WITH BANKING SYSTEM AND HRYVNIA: TURCHYNOV
*PROBLEMS WITH PENSION FUND ARE "COLOSSAL": TURCHYNOV
*UKRAINE'S ECONOMY IS IN A 'PRE-DEFAULT' SITUATION: TURCHYNOV

Hardly surprising given the months of protest; but with Russia 'conditionally' postponing its EUR2bn 'loan', the Europeans are riding to the nation's aid with promises of EUR20bn (if Ukrainian authorities meet certain conditions). But, as the map below shows, a great deal of the nation's wealth lies in the eastern (pro-Russia) region.

A dispassionate and analytic of the macro developments for the week ahead. 

The bad feelings concerning Russia run deep in the Western parts of Ukraine (as they topple statues of Lenin in growing numbers) while in the East they see themselves much more as Russians. These feelings run very deep in the region and memories do not fade so easily as the mayor and police chief of Kerch vigorously defend the Ukrainian flag in the clip below - deep in the eastern Crimea region (that Russia has already suggested it is willing to go to war over). Russian President Vladimir Putin has now been placed in a very difficult position, as Martin Armstrong notes, the entire set of circumstances creates the image of events in Ukraine that have diminished the power of Russia, which is a matter of pride and the only stable resolution remains a split along the language faultline. The critical question then is - will Putin let it go?

It is hardly surprising, given the drastically divided nation, that when Vitali Klitschko's pro-European political party ventured to Kerch - a city of the eastern edge of Ukraine in the Crimea region - things did not go entirely according to plan... This is the region that Russia has stated it is willing to go to war over and is deep in the pro-Russia territory... headlines galore are coming out of Ukraine but all that matters now is the Russian response... Especially after Tymoshenko's earlier comments:

TYMOSHENKO: UKRAINE MAY BRING CHANGES IN OTHER EX-SOVIET STATES; WILL HELP OTHER COUNTRIES UNDER `DICTATORS'

Though it seems pretty clear who they blame...

We've seen first hand the tremendous opportunity that exists in the world, and the incredible way that human beings innovate to overcome challenges. But the reality is that the world is on fire right now. In some places, like Ukraine or Thailand, quite literally. In many others (like Japan, China, and much of southern Europe), there are heaps of smoldering embers beneath a continent-wide funeral pyre. And in the Land of the Free, it’s as if politicians and central bankers are smoking their back-room cigars at the foot of a mountain of napalm and thermite that grows ever-higher by the day. If you step back and look at the big picture, there is cause for concern.

Having already fled Kiev and his compound for the more hospitable eastern are of Ukraine, perhaps it was Tymoshenko's comment that...

• *UKRAINIANS OBLIGED TO BRING YANUKOVYCH BACK TO KIEV: TYMOSHENKO

...that was the final straw. Interfax is reporting that, for now, Customs have lost rack of the deposed leader...

• *UKRAINE CUSTOMS SVC STOPPED DEPARTURE OF PRESIDENT'S PLANE: IFX
• *UKRAINE CUSTOMS SVC SAYS YANUKOVYCH LEFT AIRPORT IN CAR: IFX
• *YANUKOVYCH HASN'T SHOWN UP AT OTHER CHECKPOINT: CUSTOMS TO IFX

Cue - webcams at Moscow International...

*TYMOSHENKO URGES PROTESTERS TO STAY IN INDEPENDENCE SQUARE "NOW UKRAINE IS A FREE UKRAINE:"

Yulia Tymoshenko was the heroine of the 2004 pro-Western Orange Revolution in Ukraine. But, as DPA notes, the two-time former prime minister was convicted in 2011 of abuse of power in connection with a gas deal with Russia (detailed below). This morning she was freed from prison in Kharkiv in eastern Ukraine Saturday after parliament voted for her release...

*TYMOSHENKO LEAVES HOSPITAL WHERE SHE WAS UNDER GUARD;: WEBSITE
*UKRAINE'S TYMOSHENKO SAYS SHE WILL RUN FOR PRESIDENT: ITAR TASS

and is set to address the protesters in Independence Square... (full chronology below) The US welcomed her freedom and is "closely monitoring"; Russia is displeased blaming opposition for violence. Meanwhile,

• *UKRAINE EX-INT MIN ZAKHARCHENKO CAUGHT TRYING TO FLEE BY BORDER SERVICE: IFX
  

Sometimes you just have to sit back, look at some charts, and say WTF...

With 328 (of the 450 seats) voting in favor, the Ukraine parliament has agreed to removed President Viktor Yanukovych:

*UKRAINIAN PARLIAMENT VOTES TO REMOVE PRESIDENT YANUKOVYCH
*UKRAINIAN PARLIAMENT VOTES TO HOLD EARLY ELECTIONS ON MAY 25

“Yanukovych, in an illegal manner, removed himself from his constitutional duties,” Turchynov says in chamber before vote. The Russians are not at all happy with Siluanov exclaiming these actions "pose a direct threat to Ukraine's sovereignty and constitutional order." As Martin Armstri0g warns, the nation will survive divided for there is far too much resentment to simply put this all behind and walk forward. Divide Ukraine along the historical language faultline and there is a chance to calm things down. Otherwise, this will flare up and take others with it.

It has been a busy night in the Ukraine.

Yes, a tentative settlement has been reached, following mediation by European Union foreign ministers, with a promise of early elections. But such settlements have been proposed before, and no agreement is likely to gain broad acceptance unless it includes the immediate departure of President Viktor Yanukovich. The vast majority of demonstrators on the Maidans across the country are ordinary people angry about abuse of power, state violence, official impunity, and corruption. For the venal and vicious elites who have taken control of Ukraine, the real threat is these demonstrators’ perseverance, not the provocations of a radical fringe. "Indeed, while I refuse to believe that Ukraine’s march to civil war is unstoppable, I also know that our citizens will never be silenced again."

“We planned to allocate another tranche according to that arrangement. Yet in the current situation we have many questions as to how the money will be used and how it will be paid back," said Russian Finance Minister Anton Siluanov, according to ITAR-TASS this morning.

*RUSSIA URGES RESPECT FOR UKRAINE SOVEREIGNTY, LEGITIMATE GOVT

Siluanov also added "[central bank] interventions can prove a waste of gold and currency reserves that will lead to nothing and will not prevent the hryvnia's devaluation."

1. Within 48 hours of the signing of this agreement, a special law will be adopted, signed and promulgated, which will restore the Constitution of 2004 including amendments passed until now. Signatories declare their intention to create a coalition and form a national unity government within 10 days thereafter. 

2. Constitutional reform, balancing the powers of the President, the government and parliament, will start immediately and be completed in September 2014.

3. Presidential elections will be held as soon as the new Constitution is adopted  but no later than December 2014. New electoral laws will be passed and a new Central Election Commission will be formed on the basis of proportionality and in accordance with the OSCE & Venice commission rules.

4. Investigation into recent acts of violence will be conducted under joint monitoring from the authorities, the opposition and the Council of Europe.

5. The authorities will not impose a state of emergency. The authorities and the opposition will refrain from the use of violence. The Parliament will adopt the 3rd amnesty, covering the same range of illegal actions as the 17th February 2014 law.