IMF package for Ukraine "not enough", minister says

[bemildred]

Source: Reuters

BRUSSELS, July 8 (Reuters) - Ukraine's deputy prime minister told international donors on Tuesday that a $17 billion International Monetary Fund bailout was "not enough" because of "unprecedented Russian-inspired aggression".

Vice Prime Minister Volodymyr Groysman urged international donors at a meeting in Brussels to support a "Marshall Plan" for economic recovery that the government will present at a donors' conference expected to be held in the autumn.

The IMF approved a $17 billion two-year aid programme for Ukraine in April to help the former Soviet republic's economy recover after months of upheaval, unlocking further credits from other donors of about $15 billion. Ukraine's economy has stagnated for the past two years and the government has said it is likely to shrink by 3-5 percent this year.

"Today Ukraine is confronted with new challenges that cannot be solved in a standard fashion," Groysman told the meeting, through an interpreter.


Read more: http://ca.reuters.com/article/companyNews/idCAL6N0PJ3GY20140708?rpc=401&feedType=RSS&feedName=companyNews&rpc=401

[bemildred]

1. Preparing the donors’ conference: EU pushes Ukraine towards “decentralisation”

Everybody seems recently to be pushing Ukraine towards “decentralisation”, starting with Russia, who would like to see a federal Ukraine, going through the EU Commission, to the Assembly of European Regions (an independent body, unrelated to the EU, in which some of Ukraine’s regions are already members).

“Decentralisation” was the master word again today, 8 July, at a meeting in Brussels for the preparation of a “coordination platform for international assistance for Ukraine”, which should, according to Štefan Füle, Enlargement and Neighbourhood Commissioner, be organised by the end of the year. Štefan Füle used the formula “possible donors’ conference”, while Volodymyr Groysman, Ukrainian vice prime minister, insisted on a full donors’ conference this autumn.

The meeting was between high officials from the EU institutions and member states, the Ukrainian government and international donors, who discussed the key priorities and support for Ukraine going forward. The drive towards “ decentralisation” was not the only discrepancy in the general tone of the meeting today. The present EU Commission is on its way out, while the future Commission is not formed yet, making difficult any mobilisation for a quick international conference on Ukraine.

Štefan Füle insisted on delivering concrete figures of what Europe has already done for Ukraine, like unblocking urgent funds for training Red Cross volunteers, and for buying tents and blankets and training humanitarian personnel in emergency interventions, while the Ukrainian Volodymyr Groysman spoke about a Ukraine that would already be in the EU as a full member, so that, he said, “our Eastern border would be the Eastern frontier of the EU”.

http://www.neurope.eu/article/preparing-donors%E2%80%99-conference-eu-pushes-ukraine-towards-%E2%80%9Cdecentralisation%E2%80%9D

[dipsydoodle]

6. "that would already be in the EU as a full member" ?

Turkey applied in 1999 having joined the customs union 4 years prior to that to give an an idea of time scale. On same scale Ukraine would be looking forward to post 2034.

[bemildred]

8. Now now, you can't expect them to make sense.

I've been reading the pro-Russian blogs this morning, they are in a tizzy too. Herd politics has no respect for veracity at all.

I interpret this as something along the lines of "OK, we're taking back the East, now where's the money?" and the EU as saying: "What, we already gave you a whole bunch."; they are supposed to be grateful for being allowed in the club and not whine about money.

[bemildred]

2. Ukraine threatens rebels with 'nasty surprise' in new push

(Reuters) - Ukraine's government kept up military pressure against pro-Russian rebels on Tuesday, threatening them with an "nasty surprise", while the militants said they were preparing to fight back after losing their main stronghold.

President Petro Poroshenko, drawing confidence from the fall of the rebel bastion of Slaviansk at the weekend, named a new chief of military operations in the east following his appointment of an aggressive new defence minister who again demanded the separatists lay down their arms.

A security official said the government's plan to clear rebels from the two big towns of Donetsk and Luhansk would come as an "nasty surprise" for the insurgents.

But Poroshenko - whose officials have ruled out any more unilateral ceasefires - kept the door open to a further round of indirect peace talks with separatist leaders, naming a possible venue in a government-controlled monastery-town in the east.

http://uk.reuters.com/article/2014/07/08/uk-ukraine-crisis-idUKKBN0FD06020140708?rpc=401&feedType=RSS&feedName=topNews&rpc=401

[MisterP]

9. knowing the new Ukraine it's either sarin or that Egyptian Army AIDS-curing hand mixer

[bemildred]

10. Or a bluff. The pro-Russian rebels are threatening surprises too.

We will see who knows what they are about.

[bemildred]

3. Russia lawmakers unlikely to vote again on Ukraine action: speaker

MOSCOW: Russian Senate speaker Valentina Matviyenko said on Tuesday she abhorred Kiev's "scorched earth" tactics in eastern Ukraine, but that the Kremlin was unlikely to seek a new mandate for military intervention in the crisis.

"What is happening now is a scorched earth tactic, a purge of the territory in certain areas of eastern Ukraine that the National Guard has occupied," said Matviyenko, the speaker of the Federation Council and formally Russia's third most senior politician.

Ukrainian forces have scored a string of surprise military successes since the weekend following the collapse of a temporary truce, driving most of the separatist militias back to the eastern hubs of Donetsk and Lugansk.

"They have begun 'filtration' of the population, it is all terrible," she said at a news conference, without elaborating.

http://www.channelnewsasia.com/news/world/russia-lawmakers-unlikely/1245808.html

[bemildred]

4. Gazprom Says Ukraine's Gas Debt $838M in June, $5.30 Billion in Total

MOSCOW--Russian natural gas monopoly OAO Gazprom (GAZP.RS) said Tuesday that Ukraine's debt for gas deliveries in the first half of June totaled $838 million, which brings its total debt to $5.30 billion.

Gazprom stopped supplying gas to Ukraine from June 16, as both sides failed to reach a compromise on price. Russia's state-owned gas giant said it would only sell natural gas to Ukraine if the latter pays for deliveries in advance.

Ukraine, which is suffering its most acute political and economic crisis in decades, has reduced gas consumption partly due to a warm season, but mostly because its plants and factories are working less. However, it was still pumping in Russian gas in the first half of June.

"Overall Ukraine didn't pay for 11.5 billion cubic meters of gas, a giant volume close to that delivered to Poland annually," said Gazprom Chief Executive Alexei Miller.

http://online.wsj.com/article/BT-CO-20140708-705718.html

[bemildred]

5. . nt

[arcane1]

7. Never fear, the IMF is here!

Said no one ever.

[dipsydoodle]

11. The IMF package was based partly on ability to repay the debt

devoid of either future write downs or write offs. The more that Ukraine now borrows the less is likely to be so......ie another Greece.

They need to learn the concept of the term "manage".

Maybe their new pal will of assistance to them :

Ukrainian Employer of Joe Biden’s Son Hires a D.C. Lobbyist

An obscure private Ukrainian natural gas company has been hiring friends and family of Secretary of State John Kerry and Vice President Joe Biden, while seeking to influence Congress

When Vice President Joe Biden’s son, R. Hunter Biden, joined the board of a private Ukrainian oil and natural gas company this spring, he explained his new job as a legal one, disconnected from any effort to influence the Obama Administration. In a press release, the younger Biden boasted of his abilities on issues like improving corporate transparency.

But the company, Burisma Holdings, did not disclose at the time the scope of their plans for influencing the U.S. government. Recently released documents show that Biden’s hiring coincided with the launch of a new effort to lobby members of Congress about the role of the company in Ukraine and the country’s quest for energy independence.

David Leiter, a former Senate chief of staff to Secretary of State John Kerry, signed on to work as a lobbyist for Burisma on May 20, 2014, about a week after Biden announced he was joining the company, according to lobbying disclosures filed this month.

http://time.com/2964493/ukraine-joe-biden-son-hunter-burisma/

[bemildred]

12. They are going to have to fix that if they want to keep control in Ukraine.

Maybe they will, maybe they won't, but if they don't the chaos will continue to evolve in ways they won't like.

[bemildred]

13. Pro-Russian rebels mount new offensive

KIEV, Ukraine – Pro-Russian insurgents seized a town in the Luhansk region of Ukraine on Tuesday.

Hundreds of rebels seized Popasnaya, a city of 20,000 people. After the militants shifted thousands of fighters to the provincial capital of Donetsk last week, Ukrainian forces continued to press their campaign, according to Ukrainian Deputy Foreign Minister Danylo Lubkivsky.

“The turmoil in Ukraine is slowly coming to its logical conclusion,” Lubkivsky said in Kiev. “An active anti-terrorist operation is continuing because they don’t want to lay down their arms.”

About 50 people were killed, mostly civilians, over the weekend as government forces drove rebels out Kramatorsk in the Donetsk region.

http://www.startribune.com/world/266348211.html

[yurbud]

14. time for another coup

[dipsydoodle]

15. Re, previous amounts agreed :

Ukraine expects to get $1.5 billion in fresh IMF aid - PM Yatseniuk.

Ukraine expects to receive a second tranche of $1.5 billion from an International Monetary Fund's $17 billion aid package, Prime Minister Arseny Yatseniuk said on Wednesday.

Yatseniuk said he was expecting to meet later on Wednesday a visiting IMF mission that has been examining Ukraine's economic performance since June 24.

"We believe Ukraine has fulfilled the criteria which are written into our IMF programme and we should complete discussions and successfully receive the second tranche," Yatseniuk told a government meeting.

The ex-Soviet republic received a first tranche of slightly more than $3 billion in May.

http://uk.reuters.com/article/2014/07/09/ukraine-crisis-imf-idUKL6N0PK28L20140709

Only part of the criteria I recall concerned consumer gas prices. Historically they were 25% of cost to government and that was increased by 50% May/June to be followed by two 40% increases later this year / early next to reach .25 x 1.5 x 1.4 x 1.4 ie. 74% of cost.

Meanwhile as a result of the EU association agreement their electricity prices will need to increase TENT FOLD to comply with that. That's over a period of years tied into wage increases etc. By a strange coincidence the electricity supply system is being partly privatised and they are introducing a policy of converting as many possible over to the use of night storage heaters to switch demand from gas to electricity.

[bemildred]

17. I just don't see how this works out in an orderly way.

Nobody is really on the same page, and nobody gives a damn about making things work.

[dipsydoodle]

18. The page is whatever the IMF and the EU says it is.

As mentioned earlier their joint concern is getting their funds back eventually and hence ref. to ability to repay. If for any reason Ukraine is using Greece as a model they're onto a loser.

Way to go yet - it was originally foreseen the Ukraine will need $220 billion in loans etc to get through and out the other side which will take at least 7 years. Try servicing that debt level across 7 years without becoming owned.

For origin of $220 billion see : http://www.democraticunderground.com/1014715727#post1

[Octafish]

16. Confessions of an Economic Hit Man

When all else fails...invade.