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IMF pledges Ukraine $18B as PM Arseniy Yatsenyuk warns nation on "brink"

MildSteel

MildSteel

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There's a saying that you should be careful what you desire to have because you just might get what you want. Ukraine is about to see what life is like in the EU. The next Greece is coming to town

IMF pledges Ukraine $18B as PM Arseniy Yatsenyuk warns nation on "brink" of bankruptcy - CBS News

The International Monetary Fund on Thursday pledged $18 billion in loans to prop up Ukraine's sinking economy, as the nation's prime minister forecast more pain ahead without reforms that will affect nearly everyone in the country.

In a lengthy and passionate address to parliament, Arseniy Yatsenyuk warned that Ukraine was "on the brink of the economic and financial bankruptcy" and laid out details for fixes needed to put the country back on track, including raising taxes, a freeze on minimum wage and radically higher energy prices.

The reforms will hit households hard, which is likely to severely dent the interim government's tenuous hold on power.

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The IMF loan hinges on structural reforms that Ukraine has pledged to undertake. The IMF said measures will need to include maintaining a flexible exchange rate and reforming the energy sector to make it profitable.

Retail gas and heating tariffs have to be raised "to full cost recovery," the fund said.

Income tax rates, meanwhile, would rise from 15-17 percent now to up to 25 percent.

State energy company Naftogaz announced this week that household gas prices would rise 50 percent beginning May 1 in what it said was part of efforts to make utility costs economically viable for the state by 2018. Some analysts have estimated prices might have to double for consumers.
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Ukraine, welcome aboard!!! lol
 
Something of interest on who is going to feel the pain of this bailout

 
Ukraine, welcome aboard!!! lol
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Isn't that the truth? The one thing politicians have learned is that overspending doesn't hurt them. It hurts those who come after them.
 
MildSteel said:
There's a saying that you should be careful what you desire to have because you just might get what you want. Ukraine is about to see what life is like in the EU. The next Greece is coming to town

IMF pledges Ukraine $18B as PM Arseniy Yatsenyuk warns nation on "brink" of bankruptcy - CBS News

Ukraine, welcome aboard!!! lol
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So you are saying stuff but you aren't thinking about what you're saying.

Ukraine's new govt started with a substantial deficit since the previous administration plundered a lot of the public funds and also borrowed a lot. With this situation at hand, plus all the stuff with russia, Ukriane needs a loan to keep going and the EU by means of the IMF has provided this loan. Ukraine is in a tough spot from all points of view.

And yes, austerity is the way to go, cut down spending, rebuild the state from the ground up, get rid of corruption and let the free market fill in the cracks as much as possible. After this whole thing blows over, Ukraine will be a very tempting country for foreign investment since it's underdeveloped, it has a huge potential from the human resource perspective and there is a lot of improvements to be done. Smart investors will know how to seek opportunities and rebuild the economy. But it needs to survive till may, till after the elections without getting into more of a crisis.
 
Rainman05 said:
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So you are saying stuff but you aren't thinking about what you're saying.

Ukraine's new govt started with a substantial deficit since the previous administration plundered a lot of the public funds and also borrowed a lot. With this situation at hand, plus all the stuff with russia, Ukriane needs a loan to keep going and the EU by means of the IMF has provided this loan. Ukraine is in a tough spot from all points of view.

And yes, austerity is the way to go, cut down spending, rebuild the state from the ground up, get rid of corruption and let the free market fill in the cracks as much as possible. After this whole thing blows over, Ukraine will be a very tempting country for foreign investment since it's underdeveloped, it has a huge potential from the human resource perspective and there is a lot of improvements to be done. Smart investors will know how to seek opportunities and rebuild the economy. But it needs to survive till may, till after the elections without getting into more of a crisis.
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Must be a paradigm. I see the Western Reserve Banking System about to plunder another dupe with the complicity of In-Country opportunists. That would be the "Billionaires" in charge of Ukraine. Just a big coinky-dink that the USA found a few "Billionaires," banking buddies, to sign the economic agreements. I don't think any agreements can have legitimacy until after an Internationally observed Democratic election.
 
Rainman05 said:
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So you are saying stuff but you aren't thinking about what you're saying.

Ukraine's new govt started with a substantial deficit since the previous administration plundered a lot of the public funds and also borrowed a lot. With this situation at hand, plus all the stuff with russia, Ukriane needs a loan to keep going and the EU by means of the IMF has provided this loan. Ukraine is in a tough spot from all points of view.

And yes, austerity is the way to go, cut down spending, rebuild the state from the ground up, get rid of corruption and let the free market fill in the cracks as much as possible. After this whole thing blows over, Ukraine will be a very tempting country for foreign investment since it's underdeveloped, it has a huge potential from the human resource perspective and there is a lot of improvements to be done. Smart investors will know how to seek opportunities and rebuild the economy. But it needs to survive till may, till after the elections without getting into more of a crisis.
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No it's not the way to go, and Greece is a good example. You can't get an economy going if people don't have money to spend.
 
MildSteel said:
No it's not the way to go, and Greece is a good example. You can't get an economy going if people don't have money to spend.
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The people are supposed to earn money by working in the free market. Private companies. You should have only a few a small fraction of people working for the state, the rest in the private industry.
 
Rainman05 said:
The people are supposed to earn money by working in the free market. Private companies. You should have only a few a small fraction of people working for the state, the rest in the private industry.
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There is no such thing as a free market. It only exists as an intellectual abstraction. If there were a free market, the world financial system would have entirely collapsed back in 2008. Even up until very recently, Bernanke was propping it up with 80 billion dollar a month gifts to the banks.
 
MildSteel said:
There is no such thing as a free market. It only exists as an intellectual abstraction. If there were a free market, the world financial system would have entirely collapsed back in 2008. Even up until very recently, Bernanke was propping it up with 80 billion dollar a month gifts to the banks.
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ok I think we're done here. At least I know I am. I can't discuss complex topics with people who are not even educated on the basics.
 
Rainman05 said:
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ok I think we're done here. At least I know I am. I can't discuss complex topics with people who are not even educated on the basics.
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No, I'm not the type of person that believes everything someone says just because they have a Phd.

Think about it, in a free market the banks would have been allowed to fail.
 
MildSteel said:
No it's not the way to go, and Greece is a good example. You can't get an economy going if people don't have money to spend.
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Well, it worked for Poland. I'm philosophically against the whole "join the western behemoth or the soviet behemoth" mentality but one is clearer better for a country than the other.
 
Basically the money is really going to Russia for gas, not Ukrainians. What Ukrainians get is the debt and having to pay interest on it.
 
As the video above explains, the loan will not help Ukrainians. The money will go to Russia for gas. To repay the loan and interest, basically everything in Ukraine will be take by foreign business interests.

Here is an example:

http://www.newser.com/story/174729/china-buys-3m-hectares-of-ukraine.html

China "bought" 7,400,000 acres of Ukraine. 9% of Ukraine's agricultural land and 5% of the total country. China paid $2.6 billion for it, which went to Russia for gas. Now that land is gone from Ukrainians. They will have to hope to get jobs as laborers for China with the profits all going to China.

The $18 billion isn't a loan. It is buying Ukraine - with the money going to Russia, not Ukrainians. Basically, IEF is buying Ukraine from Russia - and demanding that Ukrainians pay it.
 
I've been saying this for a while now.. Ukrainians are screwed. They will be the slaves of Western Europe and they don't even fully realize it.

Already, as in announced today, energy prices in the Ukraine are gonna rise 50% this year and by 2017 will rise close to 200% as the EU and IMF are forcing the Ukrainian Government to get ride of their subsidy to it's citizens. So now they will be paying market rates. On top of that, the Ukrainian Government is going to limit the amount buying of foreign currencies one can do to $13,000 a month.

There will be more riots.
 
StringBean said:
Well, it worked for Poland. I'm philosophically against the whole "join the western behemoth or the soviet behemoth" mentality but one is clearer better for a country than the other.
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If you look at Greece unemployment is 24 percent. Spain is 25 percent. You don't jump start an economy by taking money away from people. How is the economy supposed to grow when people have less money?

As the video I posted stated, Poland was different. One third of Poland had been a part of Germany so there was a lot of German investment there to stimulate growth. Poland was also offered grants of money, not just loans. That would stimulate growth. And the conditions for the aid were different. So there is no comparison.
 
joko104 said:
As the video above explains, the loan will not help Ukrainians. The money will go to Russia for gas. To repay the loan and interest, basically everything in Ukraine will be take by foreign business interests.

Here is an example:

China Buys 7.4M Acres of Ukraine - Will farm an area roughly the size of Massachusetts

China "bought" 7,400,000 acres of Ukraine. 9% of Ukraine's agricultural land and 5% of the total country. China paid $2.6 billion for it, which went to Russia for gas. Now that land is gone from Ukrainians. They will have to hope to get jobs as laborers for China with the profits all going to China.

The $18 billion isn't a loan. It is buying Ukraine - with the money going to Russia, not Ukrainians. Basically, IEF is buying Ukraine from Russia - and demanding that Ukrainians pay it.
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Russia will get some of it, no doubt. They are saying that Ukraine now owes them for the subsidies they were given. So they definitely want a chunk. You can be sure that the bondholders will get a good share too. That's how they did it in Greece. Essentially the bailout money went to pay the European bond holders. It's interesting to note that in that case, Russians had lots of money in Greek bank accounts. The banks essentially stole the Russian depositors money to pay their debts. It was rather amazing! Imagine going to the bank and the bank telling you that sorry, you don't have any money because we used it to pay other debts. That must have pissed some people off big time.
 
Rainman05 said:
... So you are saying stuff but you aren't thinking about what you're saying. Ukraine's new govt started with a substantial deficit since the previous administration plundered a lot of the public funds and also borrowed a lot. With this situation at hand, plus all the stuff with russia, Ukriane needs a loan to keep going and the EU by means of the IMF has provided this loan. Ukraine is in a tough spot from all points of view. And yes, austerity is the way to go, cut down spending, rebuild the state from the ground up, get rid of corruption and let the free market fill in the cracks as much as possible. After this whole thing blows over, Ukraine will be a very tempting country for foreign investment since it's underdeveloped, it has a huge potential from the human resource perspective and there is a lot of improvements to be done. Smart investors will know how to seek opportunities and rebuild the economy. But it needs to survive till may, till after the elections without getting into more of a crisis.
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We see how it has worked in Greece. A developed nation with very low unemployment, relatively stable governance, and minimal unrest was bumped down to "developing status" while seeing significant political instability as social unrest rose with the far-right capitalizing on the loss of trust. In exchange for all that, they are more burdened by debt than ever before with foreign companies looking to pick their carcass and we still cannot be sure they are out of it. For Ukraine, Greek-style austerity is essentially a death sentence. That country cannot survive the kind of crippling economic pain and social unrest that accompanies such policies. Of course, it can't survive default for much the same reason. What I am saying, I suppose, is that Ukraine is totally screwed.
 
Demon of Light said:
We see how it has worked in Greece. A developed nation with very low unemployment, relatively stable governance, and minimal unrest was bumped down to "developing status" while seeing significant political instability as social unrest rose with the far-right capitalizing on the loss of trust. In exchange for all that, they are more burdened by debt than ever before with foreign companies looking to pick their carcass and we still cannot be sure they are out of it. For Ukraine, Greek-style austerity is essentially a death sentence. That country cannot survive the kind of crippling economic pain and social unrest that accompanies such policies. Of course, it can't survive default for much the same reason. What I am saying, I suppose, is that Ukraine is totally screwed.
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Yes, most don't understand that when the IMF get involved it goes from bad to doomsday for many. What the IMF is asking for will devastate every Ukrainian. Imagine your heating bills and electric bills going up 50% overnight.. then imagine an increase of 200% in 3 years. Whatever funds are available to Ukrainians in consumer spending will be gone.

Ukraine had other options that were ignored. If Ukraine truly wants to be part of the EU... it needed to take that Russian money and gas deal and spent the next 3-5 years getting itself straight. Then gone to the Russians and EU and said let's make Ukraine a dual trade zone. Then after Putin died lay out another plan of leaving Russia trade zone. So you'd have about 20 years of stability and possible growth without massive cuts.
 
As the US House delays Ukraine aid for another week. Seems Putin is playing chess with the GOP obstructionists .
 
FreedomFromAll said:
Yasou: Greece Is Pulling Off an Amazing Recovery - Businessweek
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Don't believe that baloney. The interest rates on the bonds may have gone down, but unemployment in Greece is higher than it was in 2012. And that's the official figures. There's no telling how high it really is. What kind of amazing recovery is that? You can't expect there to be a recovery when people don't have money. When they start giving people work, then you will see a recovery. All the EU has done is to come in and take everything that was of value from the people in Greece and give it to the wealthy financial interests. After they have taken all that is of value in Greece, and after they have taken all the bailout money, then they will start giving people work again. Only then will there be a real recovery.

Greek unemployment rises to 27.5 percent - Europe news - Boston.com

Official figures show the unemployment rate in Greece increased to 27.5 percent in the fourth quarter of 2013 as the economy struggled to emerge from a protracted recession.

Thursday’s figures from the statistics agency showed the jobless rate increasing from 27 percent in the third quarter of 2013 and from 26 percent in the same three months of 2012.

Greece, a country of about 10 million people, has 1.36 million people out of work, the figures showed. Young people are the most severely affected, with 57 percent of those aged 15-24 jobless.

Greece, which has been affected by a financial crisis since late 2009, depends on rescue loans from the International Monetary Fund and other European countries. In return, it has had to impose deep spending cuts and tax increases.
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Yep, that's an amazing recovery.
 
Demon of Light said:
We see how it has worked in Greece. A developed nation with very low unemployment, relatively stable governance, and minimal unrest was bumped down to "developing status" while seeing significant political instability as social unrest rose with the far-right capitalizing on the loss of trust. In exchange for all that, they are more burdened by debt than ever before with foreign companies looking to pick their carcass and we still cannot be sure they are out of it. For Ukraine, Greek-style austerity is essentially a death sentence. That country cannot survive the kind of crippling economic pain and social unrest that accompanies such policies. Of course, it can't survive default for much the same reason. What I am saying, I suppose, is that Ukraine is totally screwed.
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There won't be a recovery as long as people don't have work, that's the bottom line. How can the economy expand when you put people out of work? It makes no sense. What they will do is use Greek debt as an excuse to go in and take everything of value in Greece and give it to the private sector for far less than it's really worth. They will cut peoples pensions to practically nothing, so that takes money out of the economy. Then they cut the jobs of government workers, so that takes money out of the economy. They make the government run on bare bones. That's so the bailout money will go to the bondholders and not the people of Greece. The effect of all that is to contract the economy. Then once the bondholders are paid off and they have taken everything of value from the people of Greece, then they will start to give people work again. At that time they will say, "look it's a miracle." Yeah, it's a miracle alright. It's a miracle people believe that baloney. The thing is this, the recovery could have been accomplished without all that misery in the first place by making sure that people had work.
 
FreedomFromAll said:
Yasou: Greece Is Pulling Off an Amazing Recovery - Businessweek
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Greece is recovering almost entirely off the backs of two sectors: tourism and shipping. The former was hit heavily during the crisis, while the latter was only marginally impacted by the global decline. None of that is a result of austerity. Europe's bailout allowed their economy to remain in tact so that those sectors could begin to pull them out of the fire as bailout economics the world over allowed the formation of a new bubble. Ukraine does not have the kind of fundamentals that would allow such a bounce, even if one presumed that global bailout economics persists without incident for another five years.
 
They have a bigger problem.
keep-calm-the-russians-are-coming.png
 
Demon of Light said:
Greece is recovering almost entirely off the backs of two sectors: tourism and shipping.
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I think the notion that Greece is recovering is propaganda. Unemployment is higher that 2012.
 
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