Ukrainian army, rebels trade blame amid warning of hard 2015

Bloomberg

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A Ukrainian helicopter flies past the headquarters of the Ukrainian forces in eastern Ukrainian city of Kramatorsk, in the Donetsk region, on Dec. 24, 2014. A Ukrainian helicopter flies past the headquarters of the Ukrainian forces in eastern Ukrainian city of Kramatorsk, in the Donetsk region, on Dec. 24, 2014.

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Separatist rebels fired on Ukrainian forces 23 times on New Year’s eve, wounding three soldiers, the country’s military spokesman said.
Nobody was killed during the incidents in Ukraine’s eastern regions of Donetsk and Luhansk in the past 24 hours, Andriy Lysenko, the spokesman, told reporters in Kiev today. Five “enemy” drones were also spotted in the conflict-affected areas overnight, he said, while a soldier who had been “abducted by bandits” was freed by Ukrainian special forces.
Militants made “numerous attempts to provoke Ukrainian servicemen” in order to blame the military for violations of a cease-fire, Lysenko said. Rebels continue to receive supplies of weapons from across the Russian border, he said.
Ukraine accuses Russia of supporting the separatists in a conflict that has killed more than 4,700 people since April, according to the United Nations. The U.S. and the European Union imposed sanctions on Russian companies, individuals and industries after Russia annexed Ukraine’s Crimea in March in what has become the worst confrontation between the former Cold War enemies since the fall of the Iron Curtain. Russia denies it is assisting the separatists in eastern Ukraine.

Prisoners from the self-proclaimed "People's Republic of Donetsk" stand as Ukrainain soldiers stand guard prior to a prisoner exchange between Ukraine and pro-Russian rebels in the eastern Ukrainian city of Yasinovataya, near Donetsk, on Dec. 26, 2014.
Ukrainian troops fired 15 times with small arms on rebels in Donetsk on New Year’s eve, RIA Novosti news service reported, citing the military press center of the self-proclaimed Donetsk People’s Republic.
‘Cruel enemy’
U.S. Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov discussed the crisis in Ukraine during a phone conversation today, the Russian Foreign Ministry said in a statement on its website. It gave no further details. A senior U.S. State Department official confirmed the two spoke and said they also discussed the Middle East.
Ukraine endured its most difficult year since the end of World War II in 1945 as a “cruel enemy has encroached on our lives, territory, freedom and independence,” President Petro Poroshenko told Ukrainians in his New Year’s address. The year ahead “will not be easy,” he said, according to the presidential website.
Russian President Vladimir Putin called Crimea’s annexation a “landmark in national history” in his New Year’s address to the nation last night, according to a Kremlin transcript, saying that residents of the Black Sea peninsula have returned “to their native home.” Soviet authorities transfered Crimea from the Russian constituent republic to the Ukrainian constituent republic in 1954, a move Putin has called a mistake that needed to be rectified.
Ukrainian ‘catastrophe’
The Ukrainian “catastrophe” shows that “war is no longer only news from far-off lands; it is reality in today’s Europe,” Finnish President Sauli Niinisto said in his New Year’s address.
The crisis “has led to a new polarization between the West and Russia,” he said.

U.S. Secretary of State John Kerry, left, and Russian Foreign Minister Sergei Lavrov shake hands during a bilateral on the side line of an Organization for Security and Cooperation in Europe ministerial meeting in Basel on Dec. 4, 2014.
Ukraine and rebel groups released more than 370 prisoners following negotiations on Dec. 24 in Minsk, Belarus, the first since September. Envoys from Ukraine, Russia, the Organization for Security and Cooperation in Europe, and the separatists failed to make progress, however, on entrenching the fragile cease-fire that has been in place since Dec. 9, and a second day of talks planned for Dec. 26 did not take place.
Future generations
Ukraine may have to leave the issue of resolving the fate of Crimea to future generations, Prime Minister Arseniy Yatsenyuk said on Dec. 30, a day after Poroshenko said that the country could not afford to take back its rebel-held areas by force.
Poroshenko has said he’ll meet Putin, German Chancellor Angela Merkel and French President Francois Hollande in the Kazakh capital Astana on Jan. 15 for further talks on the crisis.
The Ukrainian president signed the nation’s 2015 budget yesterday, which foresees a rise in defense spending to 5.2 percent of gross domestic product, a drop of 4.3 percent in economic output and an inflation rate of 13 percent. This year’s estimated nominal GDP calculated by the International Monetary Fund is 1.73 trillion hyrnvias ($108 billion).
In a televised question-and-answer session with the press on Dec. 29, Poroshenko said the budget shifts the economy to a “war footing,” as the nine-month standoff with the pro-Russian rebels risks becoming a “frozen conflict.”
The budget bill was passed ahead of the IMF’s scheduled Jan. 8 visit, during which the lender will decide whether to continue providing installments as part of a $17 billion bailout package that since spring 2014 has disbursed $4.55 billion to the ailing nation. European Commission President Jean-Claude Juncker said on Dec. 17 that Ukraine needs another $15 billion in financial aid in addition to the IMF loan.

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