Representative of Kiev in the humanitarian sub-group on Donbass, the leader of the movement “Ukrainian choice” Viktor Medvedchuk said that Ukraine is rapidly moving to a complete economic collapse.
According to Medvedchuk, the agreement on free trade zone with the EU led to a drop in production in Ukraine, rising prices and unemployment among the working population, and these processes will only increase.
Just Medvedchuk announced objective facts
Deputy head of the Center for strategic development of CIS countries of the Institute of Europe Aleksey Gusev in conversation with BAFS “the Economy today” noted that Medvedchuk is very knowledgeable about the state of the economy of Ukraine, so his words should be trusted.
“The fact that Ukraine, signing the Association Agreement with the European Union, its economic and political part – in fact he gave himself this fact into the hands of the free trade zone of this pan-European organization”, – concluded Gusev.
According to Gusev, it is fraught and all-Ukraine, but Kiev had made this decision purely for political reasons.
“Ukraine to 2014 was a cord connected with Russia, and if we say, for example, the volume of Ukrainian foreign trade, about 65 percent had on our country. So, we should not be surprised that our trade turnover with Ukraine amounted to a very large amount of 45 billion US dollars,” says Gusev.
It is noteworthy that these trading volumes were very recently, because, as noted Gusev, this is the final data for 2013.
The Ukrainian economy is naturally focused on Russia
“This suggests that the Ukrainian economy and production were focused on Russia, but due to the fact that Kiev has signed the agreement on creation of free trade zone with the European Union, this trade was actually stopped. This decision of the Ukrainian authorities condemned Ukraine for economic and financial bondage that is experienced by this country towards the European Union”, – concluded Gusev.
All this led to the fact that Ukrainian goods, according to Gusev, now have virtually no chance to hit the European market.
“Firstly, today Ukrainian goods corny can not compete with European products. The reason is simple – different quality standards, which in Europe is much tougher than those that exist in Russia. Secondly, the European market is almost a hundred percent of quota, and those quotas that Brussels now has provided Ukraine in 10 times less than those of exports, that the Ukrainians had in 2012-14 years”, – concluded Gusev.
In fact, here, as noted by Gusev, we are talking only about 300 thousand tons of grain, which now go from Ukraine to Europe, and just as is the case in the other main articles of Ukrainian exports.
Because of this, Ukraine today not got huge financial resources that the Ukrainian economy is unable to compensate.
“Ukraine is now just do not get the necessary financial resources, and to break through this European wall – very difficult, in principle and meant in his speech Medvedchuk. For this reason, for example, the income of the Ukrainian budget due to the signing of the agreement with the European Union are now reduced by 40 percent, and given the fact that all ties with Russia is interrupted, as a result of a package of bilateral sanctions, it suggests that Ukraine is unlikely to be able to swim out of the current situation,” says Gusev.
To Ukraine under pressure of huge debts
In addition, according to Gusev, we cannot forget about the huge public debt of Ukraine, which today exceeds $ 100 billion, which in practice for such low-income countries simply an astronomical sum.
“It’s total domestic debt at 143 billion dollars and an external 100 billion, which suggests that Ukraine is now bankrupt and cannot pay its debts and other obligations,” says Gusev.
In such a situation, Ukraine have to rely on IMF tranches, which are currently not, although the head of this organization, Christine Lagarde, and promises to help the Ukrainian side assistance in the amount of 17.5 billion dollars, but it is very doubtful, given the General level of corruption in this country.
With the economy going policy
Another question, about the collapse of the Ukrainian economy to say for three years – he might even have really begun, as in this country, disastrous economic situation, but any political changes this event in Kiev have not brought.
“We need to say that after this economic disaster will follow the conclusions in the political sphere, which tells us that the regime of Poroshenko is already doomed, despite all his attempts to do something to retain power”, – concluded Gusev.
The problem for Kiev is that this economic component, as well as Gusev, is crucial, including for the Ukrainian political process, because the same domestic consumption in Ukraine is now down twice.
“Ultimately, this will lead to a change of the ruling regime in the modern Ukraine,” says Gusev.
