Ukraine must strike at heart of corruption to survive.

(Reuters) - Ukraine must take brave measures to transform an economy hooked on cheap Russian gas, huge state spending and corruption into an investment destination able to bolster a weak state, an economic adviser to the government said.

Credited with helping liberalise Georgia's economy to shed Soviet-era practices that encouraged nepotism and corruption, Kakha Bendukidze has a tough message for his new employers - either overhaul the economy or face destruction.

Drafted in by Ukrainian President Petro Poroshenko to take up a position on the government's international expert council last month, Bendukidze told Reuters the former Soviet state would have to launch two or three waves of reforms, striking at the heart of widespread corruption and lavish state spending.

Most reforms would not be popular - subsidised gas prices would have to be increased, hundreds of state employees would lose their jobs and corruption scams would be broken up - but the results should please the majority, he said.

"It's a 'to be or not to be' question for Ukraine right now," Bendukidze said. "If this country does not carry out all these reforms, it may disappear as the state."

http://uk.reuters.com/article/2014/06/20/uk-ukraine-economy-reform-idUKKBN0EV0ZV20140620

Re. subsidised gas prices :

Consumers were paying 25% of cost.

That was made subject to 47% increase last month and so became 37.5% 0f cost.

By the end of this year there will have have been another two 40% increases which take what consumers pay to 73.5% of cost.