Risks To Ukraine Turnaround 'Exceptionally High', IMF Says
Source: REUTERS
By Chris Vellacott
LONDON Thu Mar 12, 2015 6:47pm GMT
(Reuters) - Efforts to restore financial stability in Ukraine face "exceptionally high" risks from further conflict and disgruntled creditors, the International Monetary Fund said on Thursday.
The financial toll of fighting pro-Russian separatists has shrunk currency reserves to their lowest in a decade and weakened the hryvnia currency over 60 percent since the start of 2014, forcing Kiev to ask for additional international funding to stave of bankruptcy.
In a report by IMF staff released after the fund announced a new, longer-term $17.5 billion (11.78 billion pounds) loan package, the IMF said the programme it was backing and Ukraine's journey back to economic health are most vulnerable to being derailed by renewed conflict in eastern Ukraine.
Violence has lessened significantly in recent weeks as a new ceasefire deal shows signs of holding, but many fear a fresh offensive could be launched in the spring.
Read more: http://uk.reuters.com/article/2015/03/12/uk-imf-ukraine-idUKKBN0M81OX20150312
Purveyor
(29,876 posts)The International Monetary Fund (IMF) is to decide Wednesday whether to give a $17.5 billion bailout package to Ukraine. The Ukrainian parliament has already passed a series of austerity reforms to cut pensions and increase taxes in order to meet the creditors conditions, but more changes are going to be needed to gain this financial aid.
RT: About $4.6 billion in credit was extended to Ukraine in 2014, but its economic performance has scarcely improved. Does that mean the aid had no effect?
Martin Sieff: Pretty much yes, it does. It had the effect on keeping Ukraine afloat in the short-term. But this is an unconstitutional government in Ukraine which was really established by a violent coup in Kiev last year which has waged an aggressive war of repression against two secessionist provinces of its own country, which doesnt have any real social contract with its own people. Its efforts to conscript large numbers of forces for the regular army have been met with peaceful but very clear resistance. This is a very weak disorganized government, its a black hole. The more money you pour in, the less effect you will have. You can keep it stable for a year or two but no longer than that.
RT: The IMF has agreed on a new $17.5 billion lifeline to Ukraine. Do you think that will be enough to stabilize the country's economy even if fully implemented?
MS: The aid went at least in theory to what it was supposed to, but no doubt there was a great deal of corruption. Its ironic that the government of President Yanukovich was accused of corruption and incompetence. This government is far more corrupt than the previous government was and its infinitely more incompetent. So simply money leaches away, but the real problem is the lack of credibility of governance. This government is even purging its civil service of anyone remotely accused or suspected of being efficient and loyal to President Yanukovich and his predecessors. You cannot have an efficient and credible government under these circumstances.
more...
http://rt.com/op-edge/239705-ukraine-imf-financial-aid/
Mika
(17,751 posts)Now the jackals will systematically gut Ukraine.
What the Putin haters wanted?
The Farce Is Complete: Joe Biden's Son Joins Board Of Largest Ukraine Gas Producer
http://www.zerohedge.com/news/2014-05-13/farce-complete-joe-bidens-son-joins-board-largest-ukraine-gas-producer
Response to Purveyor (Original post)
Name removed Message auto-removed
delrem
(9,688 posts)the IMF will shut up.