The Ukrainian leadership became filled with optimism and hastened to share with the citizens of rosy hopes on the resumption of IMF lending. According to official Kiev, the happy event, which was expected for a year, from August 2015, when it suspended lending to Kiev by the IMF, is about to happen.
Citizens tense. Not only the ordinary voters, from which nothing depends. Started to get nervous and quite wealthy politicians, like Oleg Lyashko, who hysterically demanded to immediately publish the contents of the agreements between the IMF and Ukraine reached in the course of work in Kyiv 10-18 may of the IMF mission.
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Nervous reaction Lyashko on the official optimism is understandable. The IMF stopped funding the Ukraine for several reasons. Not last place was occupied by actual default of Kiev, who refused to repay three-milliard loan of the Russian Eurobonds and never started constructive talks. However, in August 2015 before the default was still far off, and stop lending was caused by other factors. Another thing is that the subsequent default, the IMF has strengthened his intentions.
What were the factors?
According to the Memorandum of March 2015, Ukraine has undertaken: by the middle of 2016 to reduce inflation to single digits, by 2020 to reduce the level of public debt to 71% of GDP by 2017 to abandon the subsidy and to eliminate the budget deficit “Naftogaz Ukraine”.
Guarantee in absolute terms the national debt of Ukraine has decreased somewhat, because Kiev no one gives a loan, and the repayment of debt and interest before the IMF Ukraine continues. However, the precipitous fall in GDP has led to the fact that the ratio of public debt to GDP has not improved. By the end of 2015, he was 79% of GDP. However, until 2020, still a lot of time.
Due to the draconian increase in gas prices, which resulted in a threefold increase in utility tariffs, “Naftogaz of Ukraine” is brought into the zone of profitability. Since before the beginning of 2017 is expected to have two phases of the tariff increase (for a total of 2 — 2.5 times), “Naftogaz” has become not just profitable, but extremely profitable enterprise.
As regards inflation, the IMF forecast, in 2016 it should be in Ukraine 15%, according to the forecast of the National Bank of Ukraine — 12%, experts predict the inflation rate at 25%. In any case, the unambiguous number of the question.
Thus, despite the extremely harsh measures taken by the Ukrainian authorities, sparing neither the population, the standard of living which is comparable with the poorest countries of Africa, nor the economy, which finishes off the austerity and ties with Russia, in General, the requirements of the Memorandum of March 2015, Ukraine has not fulfilled, and the chance to perform has not.
New requirements of the IMF
Lyashko demanded to make public the “devastating” for Ukraine, the Memorandum with the IMF
However, the IMF mission in Ukraine worked, left of recommendation, signed with the government of another document, and left the leaders in Kiev are in a pleasant mood, waiting for the resumption of lending in June-August.
Not surprisingly, Lyashko demanded to immediately publicize the new requirements of the IMF.
There is no doubt that the conditions of the Fund become tougher, and he demanded from Kiev for more belt-tightening. This is evidenced by all well-known practice of the IMF. Never has the Fund did not insist on further monetary easing — just for tightening.
Ukrainians are preparing for another increase in utility tariffs, risk to know that it will not end there. It is hard to imagine what other ways of robbing the tax-paying population will find power, but she will definitely find them.
In addition, the IMF traditionally requires an increase in the retirement age (to balance the budget of the pension Fund). Traditionally Kyiv agrees to satisfy this requirement. You only find out how it will raise the retirement age, at what time and for how many stages.
Already the Yanukovych government wanted to raise the retirement age for women to 60 and for men up to 65 years. “Reformers” from the Maidan may well and up to 70 years of bullying. However, then the retirement age sharply (by seven to eight years longer than the age of male mortality. But, from the point of view of the interests of the budget, it’s a good thing: if there is no one to pay pensions — it is easier to balance the budget of the Pension Fund.
There are also rumors that the IMF has demanded from Ukraine to give up a series of protectionist measures, like the ban on the export of roundwood. But in this case the interests of Western partners, which lobbies the IMF, clearly coincide with the interests of the Galician smugglers, destroyed to date, more than half of the Carpathian forests and licks on the remaining.
As the radicals with the oligarchs agree
It would seem, what business Lyashko to all these problems? Its the same they do not touch.
First, the leader of “Radical party” for five years playing the role of a public defender. The more people hate the government, the better Lyashko, as the voices of disillusioned with Poroshenko and not burdened with intelligence Maidan marginal audience depart to him. The more a faction in the Parliament — the more public money will go into the pocket of the “people’s defender” in the division of budget flows.
Secondly, Lyashko has always actively represented the interests of the oligarchs, voicing for a small bribe their thoughts and ideas. And what do you think about the current time, the oligarchs? That is the position voiced by one of the sponsors and beneficiaries of the Maidan Dmitry Firtash in late March 2016. There is no reason to believe that he changed me.
“I don’t like that Americans govern Ukraine. Ukraine today is not a successful project, America has not coped with this task. It is a decision made battlefield, it destroys all. Both economically and politically, and practically made the country a beggar.
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Ukraine should be run by Ukrainians, and not to be under external control. The current government is politically bankrupt. It is not discussed. This government has nothing to expect. It showed itself in two years, is absolutely clear and has led the country to disaster. They are dependent, they cannot make the right decisions.”
Why Firtash — the owner of the regional gas and power companies, who should rejoice in the increase in utility tariffs and to support the requirements of the IMF, sounded the alarm?
The above quote contains two key points.
First, Firtash said that “America destroys all” and “all over the country made impoverished”. And along with the destroyed economy of Ukraine is destroyed and the business of Firtash and other oligarchs. It’s their assets are losing their capitalization and become profitable in a pile of useless stones and iron.
Secondly, the impoverished people below a reasonable limit. Beggar nothing can buy. Moreover, he can’t even pay for utilities — for any fares, though large, though small. Evicted from apartments 30 million non-payers cannot. To whom to sell the apartment, if everything will be evicted? Yes, and dangerous. When people have nothing to lose, and everything at once, he ceases to be interested in the problems of “decommunisation”, “banderizatsii”, “Ukrainization,” and goes to hang the elite.
Firtash clearly distanciruemsa from the government, from which “nothing can wait”, which is “politically bankrupt”, and which “brought the country to disaster”. He does not want to be judged, along with Poroshenko, he and other oligarchs, wishes on behalf of the people to judge Poroshenko. And then assign the next government, which will be more sensitive to listen to the needs of the oligarchs.
The Ukrainian government understands that hope for a tranche from the IMF — its last chance. She’s not herself believe in his reality, he wanted to convince the population that the money’s coming in. As long as people will wait for the money Fund, will be autumn and the leaders of Ukraine every day counts, as each may be the last.
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In turn, the Ukrainian oligarchs two years ago believed that altruisticly the United States helped them reduce Yanukovych and the Ukraine to establish a Nazi dictatorship, only to ensure that they their profits increased. Now they believe neither Poroshenko nor Groisman, neither the US nor the IMF, nor the EU.
They see the inevitability of rebellion against conducting anti-people policies of the government and do not want to become victims of this riot. So they distanciruemsa from the government, fix its opposition and waiting for the moment when the popular movement will be to lead and channelize in the right direction.
Similarly, the IMF mission is simply stalling for time waiting for the inevitable. All are prepared for the inevitable, and only trapped his post Ukraine’s leaders hope the incredible.
