John Helmer: IMF Makes Ukraine War-Fighting Loan, Allows US to Fund Military Operations Against Russia, May Repay Gazprom Bill | naked capitalism

By John Helmer, the longest continuously serving foreign correspondent in Russia, and the only western journalist to direct his own bureau independent of single national or commercial ties. Helmer has also been a professor of political science, and an advisor to government heads in Greece, the United States, and Asia. He is the first and only member of a US presidential administration (Jimmy Carter) to establish himself in Russia. Originally published at Dances with Bears

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The International Monetary Fund (IMF) has agreed on a scheme of war financing for Ukraine. For the first time, according to Fund sources, the IMF is not only violating its loan repayment conditions, but also the purposes and safeguards of the IMF’s original charter.

IMF lending is barred for a member state in civil war or at war with another member state, or for military purposes, according to Article I of the Fund’s 1944-45 Articles of Agreement. This provides “confidence to members by making the general resources of the Fund temporarily available to them under adequate safeguards, thus providing them with opportunity to correct maladjustments in their balance of payments without resorting to measures destructive of national or international prosperity.”

To deter Russian and other country directors from voting last week against the IMF’s loan, and releasing their reasons in public, the IMF board has offered Russia the possibility of, though not the commitment to repayment for Gazprom’s gas deliveries, and the $3 billion Russian state bond which falls due in December.

On March 11 the IMF board agreed to approve an Extended Loan Facility (EFF) for Ukraine for a total of 13.4 billion Special Drawing Rights (SDR), currently equivalent to $17.5 billion. Here are the IMF papers spelling out the details.

The first tranche agreed for payment amounts to $4.6 billion, and was paid on Friday. According to the IMF, another $4.6 billion may be released in three instalments later in the year – in June, September, and December. At the same time, the Ukrainian government is obliged to repay the IMF $840.1 million in past-due loan amounts and charges.

The Fund’s managing director Christine Lagarde (lead image) did not claim in her press release that this is new money. Instead, she said the IMF is making a “change in the IMF-supported program from Stand-By Arrangement [SBA] to Extended Arrangement under the EFF, which is consistent with the more protracted nature of Ukraine’s balance-of-payment needs.” Lagarde also claimed the loan’s purpose is to “support immediate economic stabilization in Ukraine and a set of deep and wide-ranging policy reforms aimed at restoring robust growth.”

Complete story at - John Helmer: IMF Makes Ukraine War-Fighting Loan, Allows US to Fund Military Operations Against Russia, May Repay Gazprom Bill | naked capitalism

Revealed: The harsh terms of IMF loans agreed by Ukraine gov't - New Cold War: Ukraine and Beyond

By Ivan Katchanovski (University of Ottawa)

Ukraine for sale under IMF oversight Leaked documents, which were previously kept secret by the leaders of Ukraine, show that as a condition of getting a new IMF loan, the Ukrainian government agreed inter alia to the following:

raising prices for natural gas and heating to households to the level of prices for imported natural gas by April 2017, starting with the first increase in April 2015 cutting 20% of state employees in 2015 reducing the number of higher education institutions from 802 to 317 and raising the retirement age by 5 years. Such economic policy would increase the household prices for natural gas by more than ten times and bring the combined utility payments for energy to the levels approaching or exceeding wages and pensions of a significant percentage of Ukrainians. Such price shocks would be coupled with expected continuation of the economic crisis, which has already resulted in three fold devaluation of the Ukrainian currency, significant declines in GDP, industrial output, real wages, and export and significant increases of inflation and unemployment.

The Ukrainian central bank has asked the IMF to maintain its current practice of parallel exchange rates and currency controls, which include an official lower rate set by the central bank and much higher black market exchange rate.

The IMF agreement does not include political conditions, such as ending the civil war in Ukraine and democratization of its increasingly undemocratic political system.

The agreement and the economic policy based on the Washington Consensus fail to address key institutional issues that would prevent such shock therapy from working in Ukraine, such as corruption, property rights, social capital, and oligarchic capture of the state. The current agreement with the IMF is likely to be only partially implement as was the case with previous such agreements.
In either case, ordinary Ukrainians who were misled by the Maidan opposition leaders/current government leaders and the Ukrainian media with promises of EU standards of living, are likely to suffer the economic shocks without any prospects of reaching EU standards of living in the next years and decades.

Complete story at - Revealed: The harsh terms of IMF loans agreed by Ukraine gov't - New Cold War: Ukraine and Beyond

Revealed: The harsh terms of IMF loans agreed by Ukraine gov't - New Cold War: Ukraine and Beyond

By Ivan Katchanovski (University of Ottawa), March 9, 2015

  Ukraine for sale under IMF oversight

 Leaked documents, which were previously kept secret by the leaders of Ukraine, show that as a condition of getting a new IMF loan, the Ukrainian government agreed inter alia to the following: raising prices for natural gas and heating to households to the level of prices for imported natural gas by April 2017, starting with the first increase in April 2015 cutting 20% of state employees in 2015 reducing the number of higher education institutions from 802 to 317 and raising the retirement age by 5 years.

Such economic policy would increase the household prices for natural gas by more than ten times and bring the combined utility payments for energy to the levels approaching or exceeding wages and pensions of a significant percentage of Ukrainians. Such price shocks would be coupled with expected continuation of the economic crisis, which has already resulted in three fold devaluation of the Ukrainian currency, significant declines in GDP, industrial output, real wages, and export and significant increases of inflation and unemployment.

 The Ukrainian central bank has asked the IMF to maintain its current practice of parallel exchange rates and currency controls, which include an official lower rate set by the central bank and much higher black market exchange rate. The IMF agreement does not include political conditions, such as ending the civil war in Ukraine and democratization of its increasingly undemocratic political system.
The agreement and the economic policy based on the Washington Consensus fail to address key institutional issues that would prevent such shock therapy from working in Ukraine, such as corruption, property rights, social capital, and oligarchic capture of the state. The current agreement with the IMF is likely to be only partially implement as was the case with previous such agreements.

In either case, ordinary Ukrainians who were misled by the Maidan opposition leaders/current government leaders and the Ukrainian media with promises of EU standards of living, are likely to suffer the economic shocks without any prospects of reaching EU standards of living in the next years and decades.

 Complete story at - Revealed: The harsh terms of IMF loans agreed by Ukraine gov't - New Cold War: Ukraine and Beyond

Ukraine: A Moment of Truth Approaches - Fort Russ

Of the four options listing, 1 & 3 have already been eliminated. Apparently this time it's true. Ukraine has gotten the IMF loan. Unlike this author, I believe the war will restart, probably sooner than later. Because even if Kiev has come to it's senses on resuming the war, I certainly don't see Kiev's Nazis going along with that for too long.

By J.Hawk

While it's difficult to separate truth from deception when it comes to ascertaining the real positions on the Ukraine crisis that have been adopted by the leaders of Ukraine, EU, and the US, we'll soon have an opportunity to observe their real preferences, and the relative balance of power in that complicated relationship.

Ukraine is about to experience two events (or two non-events, depending on how things shake out). One of them is an IMF credit of up to $17 billion (and change). The other is the resumption of fighting on the Donbass. Given these two binary events, we have the following four combinations, and associated implications:

1. Ukraine does not get an IMF credit (or it gets a minimalistic one, sufficient to stave off a default but not much else), and Ukraine does not go to war. That would be a sign that US and EU have written off the "Ukraine project" as both unprofitable and risky, and that Kiev has acquiesced in that decision. It would also mean that an improvement in the Russia-Ukraine relationship is just around the corner, including the final settlement of the status of the Crimea and the Donbass. In my view, it is not a likely scenario.

2. Ukraine gets an IMF credit and does not go to war. This variant would indicate that the doves, both in the EU, US, and Ukraine, have prevailed. The "Ukraine project" is still on the agenda, but the interested parties are taking pains not to escalate the situation for fear of losing everything. In my view, this is the most likely scenario.

3. Ukraine gets no IMF credit and goes to war. If we see this outcome, it would imply a rather major breach between the US and the EU or an attempt by the Anglo-Saxon EU/NATO members to establish their dominance over their respective institutions. EU leaders don't want to see Ukraine go to war. US leaders want to see EU pay for Ukraine. If the EU is unwilling to pay, the US/British/Kiev hawks might be tempted to use war to escalate the situation to such an extent that the more dovish French and German leaders have no choice but to jump on the bandwagon. If we see weapons and trainers go to Ukraine, it will mean a definite weakening of Merkel's and Hollande's position within both EU and NATO, as it does not seem likely the two will dare chart a policy independent of Washington and London. An alternative explanation of this scenario is that it's a variation on scenario number 1, except that Kiev does not want to acquiesce to it, and tries to escalate the situation in order to force the West to assist it.

4. Ukraine gets an IMF credit and goes to war. This could either mean that Kiev broke faith with the EU (rather unlikely, considering how important that support is). It could also mean that the hardliners in the West have prevailed and have decided to finance and arm Ukraine for the sole purpose of weakening Russia. This would make it the advanced version of scenario 3, in that the Anglo-Saxon powers are now calling the shots and the influence of France, Germany, and pretty much every other EU/NATO member has been nullified. I view this scenario as relatively unlikely.

Got alternative explanations? Anything I missed? Feel free to post in the comments.

Complete story at - Ukraine: A Moment of Truth Approaches - Fort Russ

‘New IMF loan to Ukraine will go down the drain’ — RT Op-Edge

President Poroshenko’s government is far more corrupt and less efficient than the previous one, according to Martin Sieff, columnist for the Baltimore Post-Examiner. It’s like a black hole, the more money you pour in the less you will have, he added.

The International Monetary Fund (IMF) is to decide Wednesday whether to give a $17.5 billion bailout package to Ukraine. The Ukrainian parliament has already passed a series of austerity reforms to cut pensions and increase taxes in order to meet the creditors’ conditions, but more changes are going to be needed to gain this financial aid.

RT: About $4.6 billion in credit was extended to Ukraine in 2014, but its economic performance has scarcely improved. Does that mean the aid had no effect?

Martin Sieff: Pretty much yes, it does. It had the effect on keeping Ukraine afloat in the short-term. But this is an unconstitutional government in Ukraine which was really established by a violent coup in Kiev last year which has waged an aggressive war of repression against two secessionist provinces of its own country, which doesn’t have any real social contract with its own people. Its efforts to conscript large numbers of forces for the regular army have been met with peaceful but very clear resistance. This is a very weak disorganized government, it’s a black hole. The more money you pour in, the less effect you will have. You can keep it stable for a year or two but no longer than that.

RT: The IMF has agreed on a new $17.5 billion lifeline to Ukraine. Do you think that will be enough to stabilize the country's economy even if fully implemented?

MS: The aid went at least in theory to what it was supposed to, but no doubt there was a great deal of corruption. It’s ironic that the government of President Yanukovich was accused of corruption and incompetence. This government is far more corrupt than the previous government was and it’s infinitely more incompetent. So simply money leaches away, but the real problem is the lack of credibility of governance. This government is even purging its civil service of anyone remotely accused or suspected of being efficient and loyal to President Yanukovich and his predecessors. You cannot have an efficient and credible government under these circumstances.

Complete story at - ‘New IMF loan to Ukraine will go down the drain’ — RT Op-Edge

Exclusive: IMF assumes Ukraine to get $15.4 billion from creditor talks | Reuters

(Reuters) - The International Monetary Fund's bailout program for Ukraine assumes Kiev will be able to get $15.4 billion from talks with its creditors, according to four sources familiar with the IMF's documents.

The assumption is necessary to ensure Ukraine's sovereign debt can fall to 70 percent of gross domestic product by 2020, a level the IMF would deem sustainable, according to three people.

Under its rules, the IMF cannot lend to countries unless it believes they will be able to pay back the money eventually.

Targeting a particular level for debt renegotiation, considering debt talks have not yet begun, points to the uncertainty surrounding the $40 billion international rescue package for Ukraine announced last month.

After a year of political upheaval and war, Ukraine's economy is in tailspin with a currency that just pulled back from record lows and the highest interest rates in 15 years.

Under the IMF program, Kiev must make deep changes to its energy sector and banking system, and tackle decades of corruption, even as it battles pro-Russia separatists in its eastern regions.

Complete story at - Exclusive: IMF assumes Ukraine to get $15.4 billion from creditor talks | Reuters

the unbalanced evolution of homo sapiens: PIIGS and BRICS unite!

by system failure

The birth of both these acronyms comes from the widely used marketing practice that makes some things easier to remember and stigmatize. The whole story was actually an invention by the modern, mainstream economic school.

On the one hand, the bad "students" of the PIIGS (Portugal, Italy, Ireland, Greece and Spain), conveniently placed in such an order to be "nailed" in everyone's mind as something repulsive, like a dirty pig. On the other, the "good examples" of the emerging economies BRICS (Brazil, Russia, India, China, South Africa), placed in such an order to remind someone that some countries are trying to build their economies wisely, brick by brick.

Of course, all this mainstream perception was created fifteen or twenty years ago, when the West was certain that neoliberalism would manage to conquer the whole planet. The big irony of the whole story, is that PIIGS were always playing by the rules of the neoliberal bubble-style economy, and, especially when the crisis hit Greece and eurozone, they became the scapegoat of this crisis.

And while the system managed to blame the Greek public for all the catastrophe in Greece, hiding the huge responsibilities of the bankers who were rescued at the expense of the taxpayers, no one really understands why Ireland should be stigmatized as being sometimes part of the PIIGS. The crisis there was clearly caused by the banks. How the Celtic tiger became suddenly a pig?

Russia's economy was literally destroyed by the IMF in the late 90s and yet the country was put in the BRICS as a model that someone should follow. Not that we shouldn't expect such thing. Today, IMF new victim, Greece, is treated with a similar absurdity: when the Greek government (mostly previous government), obeys to the IMF destructive policies, is rewarded with the next dose of liquidity (like a junkie who begs for the next dose), but when chooses to resist (mostly current government), is being punished. Latest example is Greece's exclusion from the new QE program by Draghi.

Complete story at - the unbalanced evolution of homo sapiens: PIIGS and BRICS unite!

IMF, Kiev Agree on New $17.5Bln Rescue Plan for Ukraine – Lagarde / Sputnik International

Notes: Is it on? Is it off? This is only like the 20th report I've seen saying that the loan has been approved, followed by 20 reports saying that no, it has not been approved yet. So which is it?

The International Monetary Fund approved a $17.5 billion emergency rescue package to prevent a collapse of Ukraine's economy.

The International Monetary Fund and the Ukrainian government agreed on a $17.5 billion financial bailout package for Kiev, but the move is yet to be approved by the IMF Board.

“I’m glad that the talks on are now over. We have reached a preliminary agreement on disbursing $17.5 billion for Ukraine. It’s a four-year program,” the Fund’s managing Director Christine Lagarde said in Brussels on Thursday.

The program, which is a part of a $40-billion package for Ukraine, still has to be approved by the IMF board, IMF managing director Christine Lagarde said. If approved, it would be Ukraine’s fourth IMF bailout in 10 years.

Lagarde did not specify if Russian aid will be included the $40-billion program funded by several sources.

Complete story at - IMF, Kiev Agree on New $17.5Bln Rescue Plan for Ukraine – Lagarde / Sputnik International

Has the IMF Annexed Ukraine? - Truthdig

Michael Hudson, an economist at the University of Missouri-Kansas City and author of the upcoming book “Killing the Host: Financial Parasites and Wall Street’s War on Capitalism,” says the terms attached to the loans made by the IMF to Ukraine are likely to turn its people into penniless serfs of international banks.

In the video below, Sharmini Peries at The Real News Network asks Hudson, “In a recent interview [by former State Department official James Carden] published in The National Interest magazine you said that most media covers Russia as if it is the greatest threat to Ukraine. History suggests that the IMF may be far more dangerous. What did you mean by that?”

Hudson responds, “Well, the terms on which the IMF make loans, first of all, are based on austerity. The terms require more austerity and a withdrawal of all public subsidies. Now, you have the Ukrainian population absolutely devastated. The only result of the IMF’s austerity program, the conditions that it’s laying down for making loans to Ukraine, is you have to repay the debts, but you don’t have the ability to repay the debts. So there’s only one way to do it, and that’s the way that we’ve told Greece and other countries to do. You have to begin selling off whatever you have left of your public domain. Or you have to have your leading oligarchs take on partnerships with American or European investors so that they can buy out into the monopolies in the Ukraine.

“So essentially, the IMF has a two stage, one-two punch. Punch number one is: ‘Here’s the money, now you have to repay us after cutting back public spending and causing a depression.’ The two punch is: ‘Oh, you can’t pay us? I’m sorry that all of our projections are wrong.’

“And the IMF has been wrong on Ukraine year after year. Almost as much as it’s been wrong on Ireland and on Greece. So now the real problem is: what is Ukraine going to have to sell to pay off the foreign debts that it gets for having waged a war that’s devastated an economy. Well, the main things that foreign investors want are Ukrainian farmland. Monsanto has been buying into Ukraine, but Ukraine has a law against alienating its farmland and agricultural land to foreigners. As a matter of fact, its law is very much the same as what the Financial Times reports that Australia is wanting to do today: to block Chinese and American purchases of farmlands. The IMF’s position is: ‘You have to dismantle public regulations against foreign investment and you have to dismantle consumer production and environmental production regulations.’

“In other words, what is in store for Ukraine is a neoliberal policy that’s guaranteed to actually make it even worse. And in that sense, finance is war. Finance is a new kind of warfare using finance and forced selloffs in the IMF as a new kind of battlefield. I’m not sure how all of this is going to really help Ukraine, and it promises to lead to yet another crisis down the road, very, very quickly.”
—Posted by Alexander Reed Kelly.



Complete story at - Has the IMF Annexed Ukraine? - Truthdig

War by other means - IMF - World Bank are weapons of war, by John Pilger

Confessions of An Economic Hitman

Talka notes: To really understand the events in Ukraine today, it very much helps to understand the foreign policy decisions that come out of the US State Department, the CIA, and the DoD. This series gives you some solid background to understanding how situations like Ukraine come to happen.

Part 1.



Part 2.



Part 3.

IMF to Ukraine: End War or Face Aid Cut-Off - Russia Insider

Christine Lagarde, the head of the IMF, gave an interview to the French newspaper Le Monde on 24th January 2015 that has attracted little attention but which threatens to knock the final nail into Ukraine’s debt coffin.

For the first time since the start of the conflict Lagarde explicitly linked more financial aid to Ukraine with the end of the war.

In Lagarde’s words “No partner of the IMF can consider participating in a support programme if there is a question mark over 20% of the gross domestic product of Ukraine……In order to reform its economy, Ukraine need stable borders, this is indispensable. There is a flagrant link between the economic situation and the military situation.”

This is the logic Ukraine’s leaders have resisted ever since the Maidan coup in February 2014.

As Lagarde pointed out, the original $17 billion stabilisation package Ukraine agreed with the IMF in spring 2014 presumed there would be a settlement of the conflict in the Donbass before this winter.

Instead of treating that as a call to compromise with their opponents, Ukraine’s leaders launched a war against them instead.

Complete story at - IMF to Ukraine: End War or Face Aid Cut-Off - Russia Insider

Lies And Deception In Ukraine’s Energy Sector | Zero Hedge

The Ukrainian government has repeatedly claimed it is doing its best to improve the oil and gas investment climate, but official statements are the opposite of the reality, as Prime Minister Arseniy Yatsenyuk is leading the great deception.

According to Prime Minister Yatseniuk, Ukraine has taken a number of important steps to reform the energy sector, and has even achieved success in the formidable fight against rampant corruption, as well as signed open and transparent contracts for purchase of the natural gas from EU member states. Now he claims Ukraine is looking forward to Western companies' investment in Ukraine's gas transportation system.

"I would like to point out where we have succeeded: we have succeeded in overcoming corruption in the energy sector. Billions of dollars, which previously used to flow into the pockets of Ukrainian oligarchs, are now being brought out of the shadows. At present, Ukraine purchases gas under transparent and open contracts with European companies," Yatseniuk recently told a joint press conference with German Chancellor Angela Merkel in Berlin.

Even the President has made misguided and naïve statements this past week in Davos, declaring that “…Ukraine will build new ways for receiving Norwegian gas and gas from Europe, and Ukraine will also produce shale gas."

The stark reality is that these official statements are in no way reflected by government action, and the gas market players in Ukraine recognize the deception as does the energy industry as a whole.

The real story is that while gas has been received from Norway in reverse flows, Ukraine’s current energy strategy, taxation and fiscal regime has forced Ukraine’s current producers of oil and gas to stop drilling new wells and curtail production.

The development of Ukraine’s potential shale gas is even further afield with Chevron announcing its departure from Ukraine and only Cub Energy remaining in the country as an operator with both technical and local expertise in developing the shale. Even if shale can be developed in Ukraine it will be extremely challenging given the highly service-oriented logistical train, which does not presently exist in Ukraine.

In the course of the last year the Ukraine’s private gas producers were doing their best to overcome, if not merely survive, the consequences of the government’s move to significantly increase fiscal and administrative pressure on the industry without any consultations with the latter. The government failed to deliver on its promises, and the only thing it managed to achieve was an undermining of any trust the industry may have had in it.

Ukraine’s current regulatory and fiscal systems governing the energy sector are overly complicated and non-transparent, even without the major political and military conflict with Russia and annexation of the Crimea. The implications have been significant. Since last year, all major oil and gas projects in Ukraine have significantly slowed down at best, and been suspended entirely at worst.

Issue by issue, the lies continue to mount.

Complete story at - Lies And Deception In Ukraine’s Energy Sector | Zero Hedge

TASS: Economy - IMF loans are no help to Ukraine — Ukrainian lawmaker

KIEV, January 26. /TASS/. The IMF’s monetary policy is unacceptable for Ukraine and makes it a mere supplier of raw materials to Europe, the leader of the Opposition Bloc and deputy of the Verkhovna Rada, the Ukrainian parliament, Vadim Rabinovich said to the Ukrainian magazine Korrespondent on Monday.

“The IMF’s monetary policy is austerity aimed at destroying our own nation. It suits us if we want to leave behind 5-7 million people,” Rabinovich said.

He added that “not a single country has been rescued by the IMF loans yet.” “Only private entrepreneurs can do that. We need to quit hold of the economy, lift taxes on small and medium enterprises (SME) for two years, lift inspections for two years, stop borrowing internationally, and stimulate only those sectors that have the future, like IT or agriculture,” he said.

“Now [they] try to make Ukraine a mere supplier of raw materials to Europe,” Rabinovich said, adding that in order to find a way out of the complicated economic situation “we need to lay down a clear plan how to proceed.” “And instead of admitting guilt - we’re not accustomed to it in Ukraine - they’re trying to bring the matter to a close with the help of war,” he said.

Complete story at - TASS: Economy - IMF loans are no help to Ukraine — Ukrainian lawmaker

Oleksandr Okhrimenko: the Ukrainian budget was adjusted in order to mislead the IMF | Ukraina.ru

Interview with a renowned economist and president of the Ukrainian Analytical Center discussing why the Ukrainian budget for 2015 was rigged and whether there will be a default, as well as when the Ukrainian economy will overcome the crisis

- Oleksandr, the Ukrainian budget for 2015 has finally been published. What can you say about it?

— The budget has been adopted exclusively for the IMF. No one read it: everyone knows that the key purpose of the budget is to mislead the IMF and receive a loan. That’s why it was rigged. The data was manipulated.

They’ve come up with nonexistent performance indicators and made sure that the IMF believe that the budget is real in order to get the money. That's all there is to it. In reality, it is clear that such a budget will not work in Ukraine. What is evident instead, is that the country really needs a loan. That’s why they are willing to do whatever it takes to get it.

— Do you think the IMF will still provide a loan to Ukraine? Will it give Ukraine at least something?

— I can’t answer this question, because there are many political factors involved. It is difficult to take them all into account. There’s a strong likelihood that the loan will be issued, but certainly not with 100 percent probability.

Complete story at - Oleksandr Okhrimenko: the Ukrainian budget was adjusted in order to mislead the IMF | Ukraina.ru

No walk-over for Russia | Ukraina.ru

In hopes for Ukraine’s liberation we should keep in mind that Ukraine’s economy is not going to collapse the next day and is to be further financed by the West, writes Alexander Belozyorov, economist and ukraina.ru’s regular contributor

Ukraine has been assigned to be a proxy for Western aggression against Russia. This became evident during the so called “revolution of dignity” as Kiev’s central square had got a frequent place for foreign managers of Ukrainian coup d’etat. After the accomplished coup and subsequent events there has been hope that Ukrainian regime may collapse under the burden of economic woes. Hardly these hopes have enough rationale. Most likely, there is a long and strenuous struggle ahead to maintain stability in Russia, denazify Ukraine and achieve a world order that is more favorable for Russia.

Ukraine entered 2015 with $7.5 billion in official international reserves, having lost a quarter of its reserves in December. $2.5 billion was spent to repay gas debts to Gazprom and replenish Naftogas’ accounts for current payments. In December Ukraine’s government and National Bank have borrowed more than repaid, $767 million against $738 million.

Most likely, Ukraine’s official reserves will be growing in Q1 2015. First, new loans may easily exceed the redemptions in H1 2015. For instance, a few days ago the EU committed to provide Ukrainian government with a new €500 million loan that covers Ukraine’s government debt payments in January. There is no reason to expect that Ukrainian authorities will not raise funds like that in subsequent months. Second, the December drop in reserves was caused by a one-time event: repayment of the undisputed part of Naftogaz’ debt to Gazprom ($1.65 billion).

And third, the most important: there were leaks that the IMF might disburse not even a double, but a fourfold tranche, approximately $5 billion. Ukraine receiving funds from the IMF may look like a sure thing. First, the USA are not going to allow Ukraine to collapse after they have put in under control. Second, it would not have been reasonable to appoint Natalie Yaresko, former US State department officer as finance minister without commitment to resume IMF financing.

The chart below shows what Ukrainian authorities must pay in foreign currencies in 2015. Payments of state-run companies for natural gas, coal and electricity are omitted as their timing is hardly predictable.

Complete story at - No walk-over for Russia | Ukraina.ru

Going To The Dogs — IMF, World Bank Halt Lending To Ukraine | Dances With Bears

Multi-billion dollar lending to Ukraine by the International Monetary Fund (IMF) and World Bank has stopped amid growing doubts among country board directors at the two international organizations that the Ukrainian Government can meet repayment commitments and loan covenants for 2015, or deliver on reform promises and budget financing targets tabled in Kiev this week.

For the first time since the change of government in Ukraine last February led to civil war in the east of the country, European bankers and multilateral fund sources acknowledge that Kiev is now likely to default on its international debts, and will seek a reorganization of its bond debt. This will hit Franklin Templeton, the US investment fund which has accumulated up to $9 billion in Ukrainian bonds on a wager to make a $4 billion profit – if the US Government guarantees full and timely repayment.
IMF officials refuse to elaborate on the new terminology which the Fund began issuing last week to describe the suspension of cash disbursements under the Fund’s existing $17.1 billion programme, started last May. For the fine print of the IMF programme, read this and more.

David Lipton (below, left), the former US Treasury and White House official who is now deputy chief executive of the Fund, announced in Kiev on Friday: “A Fund team conducting technical discussions is expected to conclude its work by the end of the coming week. A mission to conduct policy discussions in the context of the Fund-supported program is expected to return to Kyiv early next year.” He said this after meetings with President Petro Poroshenko, Prime Minister Arseny Yatseniuk, Minister of Finance Natalie Jaresko, and Minister of Economy Aivaras Abromavicius. Jaresko (below, right) is an American national; Abromavicius, Lithuanian.

A spokesman for the IMF in Washington was asked to say who is in charge of the current “technical discussions”, who will head the delayed “policy discussions”, and what the difference is between them. The spokesman said this morning: “The head of the IMF technical mission, which is currently working in Kiev, is Mr. Gueorguiev, and he will also lead the mission for policy discussions early next year. Technical missions focus more on collecting data and discussing technical issues while missions for policy discussions focus on policy discussions.”

Complete story at - Going To The Dogs — IMF, World Bank Halt Lending To Ukraine – $4 Billion Ukraine Bond Wager Goes Bad For Franklin Templeton | Dances With Bears

U.S. Taxpayers Now Alone in Financing Ukraine's Ethnic Cleansing Campaign - Washington's Blog

Eric Zuesse

The IMF has concluded that it was too optimistic when loaning Ukraine $17 billion at the end of April, and that the Ukrainian Government’s economic condition is far worse than the IMF expected, and also that the Government’s anti-corruption program is too weak to justify the planned loan-installments or “tranches” going to Ukraine. Therefore, “even providing the program of the next two tranches is open to question.”

However, this only confirms an earlier assessment, made public on October 28, about which Reuters headlined at the time, “Ukraine unlikely to receive IMF loan tranche this year: finance minister.” And this was already “after warning in September that if Ukraine’s conflict with the separatists runs into next year, the country may need as much as $19 billion in extra aid.” Ukraine has made clear that it will continue the war, and so the additional $19 billion will also need to be paid to Ukraine in order for its war against the “separatists” to continue.

This rejection comes as a severe disappointment to the Ukrainian Government, whose central bank chief said on November 16th, “I am still optimistic about us being able to do it [to receive the third tranche] this year.” Clearly, that expectation won’t be able to be met.

So, since Ukraine is nonetheless now gearing up, with American taxpayers’ money, to replace its weapons-supply that was used-up or destroyed in the war to-date, and also to build an immense new military graveyard for a planned 250,000 corpses of Ukrainian soldiers in the next and future rounds of invasions against the rebelling region in Ukraine’s (former) southeast, the IMF is basically quitting continued financing of that ethnic-cleansing campaign against the residents in that region. The EU has already quit funding it, other than a token half-billion-euro donation delivered on December 10th. Only the U.S. remains committed to funding it, by donating whatever weapons and military guidance are deemed necessary in order to conquer, and/or to expel, the pro-Russian residents in Ukraine’s former southeast. 98% of the U.S. House voted for it, and so did 100% of the U.S. Senate. At least 67% of the U.S. public are against it.

Complete story at - U.S. Taxpayers Now Alone in Financing Ukraine's Ethnic Cleansing Campaign Washington's Blog

Ukrainians refuse to pay utility bills | Ukraina.ru

Ukraine’s statistics service reports that the total utility bill debt in the country adds up to 11.8 billion hryvnias

The hot water debt is some 5.5 billion hryvnias and the gas debt is about 2 billion.

Oleksandr Okhrimenko, president of the Ukrainian Analytical Center, commented on the situation on Facebook: "As might have been expected, fewer people paid their utility bills in October 2014. Simply said, they prefer to not pay at all."

Okhrimenko believes that this is only the beginning of a 'silent protest' against the 60 percent increase in utility rates which is supposed to be introduced on January 1, 2015.

An increase in the utility rates, including the residential gas prices (which were earlier subsided by the government) is one of the key requirements of the International Monetary Fund and a condition for another tranche of an IMF loan.

Complete story at - Ukrainians refuse to pay utility bills | Ukraina.ru

Russian news: The Experts Agree - Ukraine's Economy is in Cardiac Arrest - Russia Insider

"Unless actions are taken pretty soon, the odds of Ukraine falling into financial and economic collapse are very, very large," said Lubo Mitov, chief economist of the Institute of International Finance.

Over the next six months, Ukraine needs $10 billion to $15 billion more than what has been promised by international organizations such as the International Monetary Fund, the IIF said. Without an injection of cash soon, "people will start freezing in the winter," because the country won't have the cash to pay for natural gas.

Between this year and next, the IIF expects the Ukrainian economy to decline by at least 20 percent, causing a huge drop in tax revenue. The steep decline is expected in part due to the loss of eastern Ukraine to militant separatists that are widely believed to receive support from Russia.

Mitov dismissed Ukraine's better-than-expected 5.1 percent economic contraction in the third quarter of this year, saying that hard data related to industrial production, exports, tax revenue and real incomes are registering "double-digit declines."

Complete story at - Russian news: The Experts Agree - Ukraine's Economy is in Cardiac Arrest - Russia Insider