Sunday, November 16, 2014

The Economic Funeral for Ukraine continues...

The Economic Funeral for Ukraine continues

_________________________________ British media, The Economist, expresses grave concern about the state of the Maidan's economy, and the collapse of which will disperse negatively into Europe. The Economy of the ( Bandera Pindos-junta occupied territory of Ukraine) is in complete chaos, and will only get worse by the end of the year, where it GDP will fall as much as 10%. If the country in its near future does not change its political course, the economy could collapse completely. This writes an editorial article in the British edition of The Economist.

The main tool of the West to help Ukraine was the International Monetary Fund (IMF). In April, the junta agreed to receive funds of $ 17 billion over two years, in exchange for austerity and the fight against corruption. Other donors have pledged to give the junta smaller amounts.The money, amounting to  $ 27 billion in total, was enough to avoid default and to stimulate economic growth. While Ukraine has already received about $ 7 billion of this amount, it was sufficient to prevent an immediate default, but not enough to restore the economy. Suffering much more than anyone had predicted about six months ago. The GDP decline for Ukraine was twice as much as  the IMF forecasts in April. Consumers are facing increasingly high cost of imported energy.
Private equity investors are running the country, and the hryvnia has seriously been devalued. The national currency, which reached this week, its lowest point - 16 hryvnia per dollar, has lost half its value in 2014 alone. In August, the IMF estimated in order to avoid this "adverse scenario" Ukraine will need to attract additional borrowings of $ 19 billion for the whole of 2015. Even though their debt burden increased from 40% of GDP in 2013 to about 70% now, and the government and the IMF still argue that the country can pay its debt payments, according to The Economist it looks, to put it mildly, awfully strange at best. 

As the prospect of more chaos by default, this will deter future investors. Ukraine, with the support of the IMF, is to begin talks on restructuring its government securities now' said the publication. "Western governments should clearly, know by now that they will need provide Ukraine a lot more funds in the very near future. In particular, the United States could be more generous; but she is still limited to one pathetic billion dollars ", it is stated in the article. In 2015 the newly created state of Banderastan, some are calling the Kiev junta regime, will need way more additional monetary assistance, probably at least in an amount not less than $ 20 billion, says the publisher.

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