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Zelensky newly determined to root out corrupt oligarchs and Russian influence

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Amidst a brewing constitutional crisis that has increasingly alarmed Kyiv’s partners in Washington and Brussels and put the country’s visa-free regime with the EU in jeopardy, Ukrainian President Volodymyr Zelensky is doubling down on the bent for cracking down on graft which swept him to power. In particular, the comedian turned anti-corruption crusader is striking back against what he has described as an “attack” on Ukraine and its democratic values—a set of rulings by the country’s Constitutional Court that have frittered away anti-corruption legislation.

Zelensky has characterised his tussle with the Constitutional Court in stark terms, calling it a “fight for the soul and the future of our nation”—and has made it clear that he is ready to take dramatic steps to continue battling corruption and Russian influence, including attempting to replace the entire court. This bold initiative is a direct response to the court’s October 28th ruling to strip away— among other things— the compulsory and transparent asset register for public servants which was an essential part of the country’s anti-corruption architecture, painstakingly built after the Maidan.

Zelensky and anti-corruption activists see the Constitutional Court’s ruling as the last straw in its systematic attempts to attack Ukraine’s anti-graft institutions, a push that they suggest is “driven by pro-Russian politicians and lawmakers allied to powerful oligarchs who want to wreck Kyiv’s relations with the IMF and EU”. Indeed, while Zelensky and some of his closest allies, in particular security chief Ivan Bakanov, have distanced themselves from the oligarchic networks and Russian influence which long dominated Ukrainian politics, the constitutional court’s manoeuvring—which has brought thousands onto the streets of Kyiv in protest and which Zelensky has warned could lead to bloodshed if not swiftly resolved— is a reminder of the uphill battle they face to excise these corrupt remnants.

Security services a bright spot under Ivan Bakanov

If the special interests entrenched in Ukraine’s judiciary have slowed down the ambitious reforms which Zelensky pledged to carry out, progress in cleaning up some areas of the government, in particular the country’s security agency (SBU), offers a blueprint of how even institutions with deep Soviet roots can be overhauled and modernised. Specifically, the reform of the SBU highlights how fresh blood in the Ukrainian political and security landscape is vital to ensuring that Kyiv is a trusted international partner for its Western allies, despite continuous Russian pressure.

Before Zelensky’s administration, the SBU remained true to its KGB roots, a bloated body with little oversight and far too many cases of abuse of power. A 2018 assessment deemed it “the only agency in the country that has avoided any reform since 2014”, highlighting a cornucopia of scandals in which high-ranking SBU officials schemed to illicitly enrich themselves. The rot at the core of the security services went far beyond garden-variety graft, however; of particular concern were reports that top SBU cadres had close ties to Russia and that private businessmen with Russian connections exploited the SBU for their business interests.

Given Russia’s relentless aggression in Ukraine, reforming the SBU was a matter of national security— with significant implications for other European states, given the vital role which Kyiv plays in safeguarding the continent’s security due to its strategic location. Under SBU director Ivan Bakanov, in his post since August 2019, the agency has proven effective in rooting out corruption and Russian influence. Bakanov, by virtue of not himself being a product of the pre-reform SBU, has proven less susceptible to pressure from pro-Russian forces and corrupt actors than his predecessors.

Some 510 corruption cases have been opened so far in 2020, the SBU recently announced, with 143 government officials sacked over graft. In April, an SBU investigation uncovered “indisputable evidence” that Major General Valery Shaytanov was collecting information for Russian intelligence and had agreed to plan terrorist attacks on Ukrainian soil in exchange for $200,000 and a Russian passport. In early October, meanwhile, the SBU blocked several cybernetworks of pro-Russian agitators who were attempting to destabilise the country ahead of the local elections.

In a sign that the Ukrainian security services are earning the confidence of their Western counterparts, Zelensky and Bakanov recently had a meeting with MI6 chief Richard Moore, to discuss issues ranging from Russian aggression to the importance of promoting independent journalism in Ukraine, where a number of major media channels are still controlled by powerful oligarchs.

Pervasive influence remains in courts

An independent and trustworthy SBU is an invaluable partner for the EU as the bloc faces up to increasing Russian aggression and tries to reinforce the rule of law across the European continent. It’s particularly fortunate that Bakanov has led the SBU to turn over a new leaf, because he will likely play a key role in investigating the oligarchic networks which have played a role in the brewing constitutional crisis. It’s abundantly clear that Ukraine’s judicial system needs a major overhaul. Ukrainians’ trust in their court system is appallingly low—as little as 5% of the country’s citizens has confidence in the judiciary overall, while a mere 2.2% of citizens have full confidence in the Constitutional Court.

There’s good reason for their scepticism. One of the main elements of the controversial October 28th ruling was a severe curb on the National Agency for Preventing Corruption (NAZK). Four of the Constitutional Court judges who stripped the NAZK of a broad swath of powers—including the agency’s ability to verify public officials’ asset declarations and conduct anti-corruption inspections in government agencies—are themselves under investigation by the NAZK for failing to properly declare their own assets; the head of the court is under investigation for having secretly purchased property in Russian-occupied Crimea. The fact that these four judges refused to recuse themselves from the case naturally casts a further pall over the ruling, which the head of one NGO lambasted as an “indulgence” granted to corrupt officials.

The standoff between anti-corruption activists and the court shows no signs of abating—a number of other petitions from pro-Russian MPs are pending before the court and it seems increasingly likely to annul the creation of Ukraine’s Anti-Corruption Court, one of the main success stories in Kyiv’s fight against graft. The Constitutional Court judges’ gross conflicts of interest only emphasizes the need to systematically ferret out influence from Moscow and oligarchic networks. If an institution which once teemed with graft and Russian influence, like the SBU, can be reformed into a dependable European partner by placing it under the leadership of someone who’s not a “product of the system”, then there’s hope yet for Ukraine’s judiciary, no matter how deep the veins of profiteering and Russian ties run.

Economy

EU approves €2.9 billion in state aid for battery project attracting €9 billion

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The Commission has approved, state aid of up to €2.9 billion in funding for an ‘Important Project of Common European Interest’ (IPCEI) to support research and innovation in the battery value chain. The twelve EU countries involved will provide public funding expected to unlock an additional €9 billion in private investments.

The project, called “European Battery Innovation” was jointly prepared and notified by Austria, Belgium, Croatia, Finland, France, Germany, Greece, Italy, Poland, Slovakia, Spain and Sweden.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “For those massive innovation challenges for the European economy, the risks can be too big for just one member state or one company to take alone. Today's project is an example of how competition policy works hand in hand with innovation and competitiveness. With significant support also comes responsibility: the public has to benefit from its investment, which is why companies receiving aid have to generate positive spillover effects across the EU.”

When Vestager was asked if companies from outside the EU, such as Tesla, could benefit from this funding she said that this was possible and showed that the EU was committed to open strategic autonomy and welcomes non-EU firms when they have the right projects.

The Vice-President for Foresight, Maroš Šefčovič, said: “The Commission has given its green light to a second important project of the common European interest in the field of batteries. Technology is vital for our transition to climate neutrality. The figures show what an enormous undertaking this is. It involves twelve member states from North, South, East and West, injecting up to €2.9 billion euros in state aid in support of 46 projects designed by 42 companies, which in turn will generate three times as much private investment. "

The project will cover the entire battery value chain: extraction of raw materials, design and manufacturing of battery cells, recycling and disposal. It is expected to contribute to the development of a whole set of new technological breakthroughs, including different cell chemistries and novel production processes, and other innovations in the battery value chain, in addition to what will be achieved thanks to the first battery IPCEI.

 

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coronavirus

EU urges AstraZeneca to speed up vaccine deliveries amid 'supply shock'

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The European Union has urged AstraZeneca to find ways to swiftly deliver vaccines after the company announced a large cut in supplies of its COVID-19 shot to the bloc, as news emerged the drugmaker also faced supply problems elsewhere, write and

In a sign of the EU’s frustration - after Pfizer also announced supply delays earlier in January - a senior EU official told Reuters the bloc would in the coming days require pharmaceutical companies to register COVID-19 vaccine exports.

AstraZeneca, which developed its shot with Oxford University, told the EU on Friday it could not meet agreed supply targets up to the end of March, with an EU official involved in the talks telling Reuters that meant a 60% cut to 31 million doses.

“We expect the company to find solutions and to exploit all possible flexibilities to deliver swiftly,” an EU Commission spokesman said, adding the head of the EU executive Ursula von der Leyen had a call earlier on Monday with AstraZeneca’s chief Pascal Soriot to remind him of the firm’s commitments.

A spokesman for AstraZeneca said Soriot told von der Leyen the company was doing everything it could to bring its vaccine to millions of Europeans as soon as possible.

News emerged on Monday that the company faces wider supply problems.

Australia’s Health Minister Greg Hunt told reporters AstraZeneca had advised the country it had experienced “a significant supply shock”, which would cut supplies in March below what was agreed. He did not provide figures.

Thailand’s Health Minister Anutin Charnvirakul said AstraZeneca would be supplying 150,000 doses instead of the 200,000 planned, and far less than the 1 million shots the country had initially requested.

AstraZeneca declined to comment on global supply issues.

The senior EU official said the bloc had a contractual right to check the company’s books to assess production and deliveries, a move that could imply the EU fears doses being diverted from Europe to other buyers outside the bloc.

AstraZeneca has received an upfront payment of 336 million euros ($409 million) from the EU, another official told Reuters when the 27-nation bloc sealed a supply deal with the company in August for at least 300 million doses - the first signed by the EU to secure COVID-19 shots..

Under advance purchase deals sealed during the pandemic, the EU makes down-payments to companies to secure doses, with the money expected to be mostly used to expand production capacity.

“Initial volumes will be lower than originally anticipated due to reduced yields at a manufacturing site within our European supply chain,” AstraZeneca said on Friday.

The site is a viral vectors factory in Belgium run by the drugmaker’s partner Novasep.

Viral vectors are produced in genetically modified living cells that have to be nurtured in bioreactors. The complex procedure requires fine-tuning of various inputs and variables to arrive at consistently high yields.

“The flimsy justification that there are difficulties in the EU supply chain but not elsewhere does not hold water, as it is of course no problem to get the vaccine from the UK to the continent,” said EU lawmaker Peter Liese, who is from the same party as German Chancellor Angela Merkel.

The EU called a meeting with AstraZeneca after Friday’s (22 January) announcement to seek further clarification. The meeting started at 1230 CET on Monday.

The EU official involved in the talks with AstraZeneca said expectations were not high for the meeting, in which the company will be asked to better explain the delays.

Earlier in January, Pfizer, which is currently the largest supplier of COVID-19 vaccines to the EU, announced delays of nearly a month to its shipments, but hours later revised this to say the delays would last only a week.

EU contracts with vaccine makers are confidential, but the EU official involved in the talks did not rule out penalties for AstraZeneca, given the large revision to its commitments. However, the source did not elaborate on what could trigger the penalties. “We are not there yet,” the official added.

“AstraZeneca has been contractually obligated to produce since as early as October and they are apparently delivering to other parts of the world, including the UK without delay,” Liese said.

AstraZeneca’s vaccine is expected to be approved for use in the EU on Jan. 29, with first deliveries expected from 15 February.

($1 = €0.8214)

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EU

Chemicals: EU protects wildlife from negative effects of lead in the environment

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On 25 January, the Commission took firm steps to ensure that wildlife is protected from the negative effects of lead in the environment, by restricting its use in gunshot in or around wetlands. Adopted under the framework of the EU's chemicals regulation, the measure will help to protect the environment by significantly reducing lead pollution while preventing the avoidable death by lead poisoning of around 1 million waterbirds every year. Lead is a highly toxic substance, which released to the environment contaminates both the soil and water.

Every year, 4,000 to 5,000 tonnes of lead are released into wetlands from lead gunshot.  There are affordable alternatives, for example steel gunshots, which currently cost about the same as lead gunshots. The measure adopted today will harmonise and enhance the effectiveness of national legislation limiting the use of lead gunshot in wetlands already in place in 24 member states.

It will start applying in two years' time. The restriction supports the goals of the Chemical Strategy for Sustainability and the Green Deal. It also supports the objectives of the Birds Directive, and is a first concrete deliverable under the new EU 2030 Biodiversity Strategy. More info here.

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