During the last year Ukrainian foreign debt has many times increased. If would it be able to pay off, or all those means slipped into obscurity?
Ms. Lagard's letter to the Premier of Ukraine Yatsenyuk
Ukraine more and more resembles Titanic in this latter year. Either governmental frauds in financial sphere, or costly and unsuccessful military operation in southeast region of the country, or energetics problems drug the country into the vortex of systemwide collapse and an imminent default. Just its captains have been sitting on the shore pretending this was as it should be.
Since last March the Prime Minister of Ukraine Arseniy Yatsenyuk has been resembling a mad squirrel feverishly hoarding nuts for the winter. Just instead of nuts Arseniy Petrovich collects international credits on any conditions and never intends to stop. As a result the Ukrainian debt burden has been regularly increasing. Meanwhile last November according IMF forecast for 2015 Ukrainian want of capital should figure up to $15 bln. But now it is clear that the demand is much higher than predicted.
At year-end 2014 GDP shortened 7.5% less. And by Ukrainian governmental count it will fall away more 4.3%. At the same time Ukraine has already managed to enslave itself with $17 bln IMF credit in 2014. And here you are, this January the President Poroshenko begging the head of IMF Christine Lagardewith outstretched hand to prolong to more 10 years existing credit program and to grant even more additional means. So he managed to make a €1.8 bln touch. And Ms. Lagard asked a reasonable question about how and when Ukraine would pay interest on this entire wealth :
What does Ukrainian Government count on? Unless the Big Brother overseas would help. However USA hasn’t much desire (and they are totally right) to sponsor a huge backward country with collapsed economics and dead industry. So they just pay with insignificant handouts. You must admit that promised by John Kerry his last visit to Kiev $16.4 Mio is a miserly drop in a bucket. Meanwhile the President Poroshenko complains that south east Anti-terrorist operation costs €5-7 bln per diem.
In prospect there just unblest Ukrainian citizens remain. Even they start suspecting that “the boat is out of gas.” However it is already clear at first view :the commodity prices has gone up following oil-products ones, prices for mass transport increased either. Also as late as November, 2014 national joint stock company Naftogaz announced 40% mark-up for utility charges toward the end of May, 2015. Meanwhile national currency has dropped to 25 hryvnias for $1.And continues going down steadily for National Bank of Ukraine has to supply Ukrainian Budget 2015 with more 65.4 blnhryvnias.
Also somehow divorced from reality Ukrainian authorities hope to gain from the taxpayers 50 bln hryvnias more than the last year. Where would poor Ukrainians with frozen “till stabilizing of situation in the country” wages and welfare benefits get such sums? No one takes into account neither raised in price utility services, nor increased taxes like purchase tax, and war tax, and real-estate tax which became a general one. Meanwhile Ukrainian Parliament, aka the VerkhovnaRada has ‘forgotten’ to place a ceiling on salary for the Ukrainian high officials – what nonsense indeed :
http://khpg.org/en/index.php?id=1420492857
So sale of energy industry, heavy engineering, chemistryhighly profitable enterprises with a controlling block of shares owed by the government is well under way. But the Cabinet of Ukraine is extremely satisfied with “reforms”. Thus Aivaras Abromavičius open-heartedly expressed his delight with falling hryvnia, with production cost-cutting and with the government enterprises’ depreciating. According his words these measures would encourage “foreign investors”. It’s just funny to hear the minister of economy and trade rejoicing to classic signs of a coming national default, in other word to the failure of a government to repay its national debt.
In general it wouldn’t be surprising if such “reform in public enterprises sphere” were one of IMF new credit conditions. In addition the National Bank of Ukraine administration acknowledged the leading role of IFM and US Department of the Treasury officials in winding-up of the Fund on individuals’ investments guarantee Banks. As a result by decision of the National Bank of Ukraine handed control over provisional administrations in troubled financial institutions and following benefits to IMF.There is also draft of bill about “temporary” nationalization of Ukrainian individuals’ investments. Guess, who skims all the cream off.
On the other hand, these are reasoned measures in the face of disastrous situation of common Ukrainians and flourishing corruption in top echelons of power. By all odds principal holders would want some guarantees (and theoretically some dividends either) for the exponentially growing Ukrainian external debt. And neither IMF nor Brussels can afford such a vast scale charity. As a result the USA would be forced to buy for a song Ukrainian agriculturally used areas just like longsighted Monsanto Company did in Zhytomyr region. Indeed, better a small fish than an empty dish. Ukraine should use credits for raising economics and paying off debts. Instead Poroshenko’s Government robbed Ukraine blind and laid the legislative groundwork to give generous share with its American friends.
According The Wall Street Journal this year Ukraine has to pay off $10 bln of foreign debt. Meanwhile towards the end of 2014 international reserves of the National Bank of Ukraine have shortened to $7.5 bln. Most probably the Ukrainian central government budget deficit 2015 would be compensated by the National Bank of Ukraine’s money printing press. But it cannot save drowning country. In this case Yatsenyuk squirrel should commit suicide like any self-respecting rodent after founding his winter stores taken.
Since last March the Prime Minister of Ukraine Arseniy Yatsenyuk has been resembling a mad squirrel feverishly hoarding nuts for the winter. Just instead of nuts Arseniy Petrovich collects international credits on any conditions and never intends to stop. As a result the Ukrainian debt burden has been regularly increasing. Meanwhile last November according IMF forecast for 2015 Ukrainian want of capital should figure up to $15 bln. But now it is clear that the demand is much higher than predicted.
At year-end 2014 GDP shortened 7.5% less. And by Ukrainian governmental count it will fall away more 4.3%. At the same time Ukraine has already managed to enslave itself with $17 bln IMF credit in 2014. And here you are, this January the President Poroshenko begging the head of IMF Christine Lagardewith outstretched hand to prolong to more 10 years existing credit program and to grant even more additional means. So he managed to make a €1.8 bln touch. And Ms. Lagard asked a reasonable question about how and when Ukraine would pay interest on this entire wealth :
What does Ukrainian Government count on? Unless the Big Brother overseas would help. However USA hasn’t much desire (and they are totally right) to sponsor a huge backward country with collapsed economics and dead industry. So they just pay with insignificant handouts. You must admit that promised by John Kerry his last visit to Kiev $16.4 Mio is a miserly drop in a bucket. Meanwhile the President Poroshenko complains that south east Anti-terrorist operation costs €5-7 bln per diem.
In prospect there just unblest Ukrainian citizens remain. Even they start suspecting that “the boat is out of gas.” However it is already clear at first view :the commodity prices has gone up following oil-products ones, prices for mass transport increased either. Also as late as November, 2014 national joint stock company Naftogaz announced 40% mark-up for utility charges toward the end of May, 2015. Meanwhile national currency has dropped to 25 hryvnias for $1.And continues going down steadily for National Bank of Ukraine has to supply Ukrainian Budget 2015 with more 65.4 blnhryvnias.
Also somehow divorced from reality Ukrainian authorities hope to gain from the taxpayers 50 bln hryvnias more than the last year. Where would poor Ukrainians with frozen “till stabilizing of situation in the country” wages and welfare benefits get such sums? No one takes into account neither raised in price utility services, nor increased taxes like purchase tax, and war tax, and real-estate tax which became a general one. Meanwhile Ukrainian Parliament, aka the VerkhovnaRada has ‘forgotten’ to place a ceiling on salary for the Ukrainian high officials – what nonsense indeed :
http://khpg.org/en/index.php?id=1420492857 So sale of energy industry, heavy engineering, chemistryhighly profitable enterprises with a controlling block of shares owed by the government is well under way. But the Cabinet of Ukraine is extremely satisfied with “reforms”. Thus Aivaras Abromavičius open-heartedly expressed his delight with falling hryvnia, with production cost-cutting and with the government enterprises’ depreciating. According his words these measures would encourage “foreign investors”. It’s just funny to hear the minister of economy and trade rejoicing to classic signs of a coming national default, in other word to the failure of a government to repay its national debt.
In general it wouldn’t be surprising if such “reform in public enterprises sphere” were one of IMF new credit conditions. In addition the National Bank of Ukraine administration acknowledged the leading role of IFM and US Department of the Treasury officials in winding-up of the Fund on individuals’ investments guarantee Banks. As a result by decision of the National Bank of Ukraine handed control over provisional administrations in troubled financial institutions and following benefits to IMF.There is also draft of bill about “temporary” nationalization of Ukrainian individuals’ investments. Guess, who skims all the cream off.
On the other hand, these are reasoned measures in the face of disastrous situation of common Ukrainians and flourishing corruption in top echelons of power. By all odds principal holders would want some guarantees (and theoretically some dividends either) for the exponentially growing Ukrainian external debt. And neither IMF nor Brussels can afford such a vast scale charity. As a result the USA would be forced to buy for a song Ukrainian agriculturally used areas just like longsighted Monsanto Company did in Zhytomyr region. Indeed, better a small fish than an empty dish. Ukraine should use credits for raising economics and paying off debts. Instead Poroshenko’s Government robbed Ukraine blind and laid the legislative groundwork to give generous share with its American friends.
According The Wall Street Journal this year Ukraine has to pay off $10 bln of foreign debt. Meanwhile towards the end of 2014 international reserves of the National Bank of Ukraine have shortened to $7.5 bln. Most probably the Ukrainian central government budget deficit 2015 would be compensated by the National Bank of Ukraine’s money printing press. But it cannot save drowning country. In this case Yatsenyuk squirrel should commit suicide like any self-respecting rodent after founding his winter stores taken.
