Via Associated Press:
The International Monetary Fund will answer Ukraine’s call for financial help “at this critical moment in its history,” fund chief Christine Lagarde said Thursday.
In the IMF’s first official statement on Ukraine since the country’s political crisis intensified last week, Lagarde said a fact-finding team will go to Kiev in the coming days to assess the financial needs.
“We are ready to respond,” she said.
The mission will help the IMF understand the economic situation and its officials will start discussing with Ukrainian authorities what reforms would be required in exchange for emergency loans, she added.
Ukraine’s finance ministry has said it needs $35 billion for this year and next to avoid default. The political turmoil since the end of last year has roiled the economy, depleted the central bank’s reserves and sent its currency tumbling.
Any financial help from the IMF for the country of 46 million is likely to come with tough conditions, including demands for budget cuts, structural reforms and a devaluation of the currency to make the economy more competitive. The IMF would also likely demand a sharp increase in the price of natural gas, which the country heavily subsidizes.
Those measures are likely to be unpopular and dent the support of any new government. A currency devaluation would cause import prices to soar. More expensive energy would further eat into consumers’ budgets.
So, there it is with only a bit of spin. The Ukrainian government borrowed money it can’t pay back. So the IMF is “ready to respond” by loaning some money to cover what’s due in the short term if the Ukrainian government will only defy the will of the people and impoverish them with a debauched currency and skyrocketing energy costs.
Once Ukraine has implemented these starvation measures on its people, then they can go into more debt and have the privilege of another crisis with another round of demands for another temporary loan.
Seriously, if Russia had proposed such “help” it would be seen as an act of imperial aggression. Because it is an act of imperial aggression!
Can someone please explain to me how a Democratic revolution succeeds by coming under the authority of a foreign power to dictate its laws and internal policies? This doesn’t look like a revolution. It looks like a foreign buyout.
I hate subsidies of any industry, including energy. But that is up to the Ukrainians. And yes, it is quite likely Ukraine will have to suffer a time of economic pain. But they should suffer under their own power. They should default and rebuild the economy. Forget taking on new debt to pay interest on old debt.
Ukraine you fought to be free, so be free. Kick the IMF to the curb.