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

The 4th Media » Syriza Wins Greek Election: The End of the IMF-ruled ‘VICIOUS Cycle of AUSTERITY’

Here’s summary of a momentous election result for the future of Greece and Europe:

1. The anti-austerity far left party Syriza has won the Greek election by a decisive margin, but just short of an outright majority. With more than three-quarters of the results in Syriza is projected to win 149 seats in the 300 seat parliament.

2. Syriza leader Alexis Tsipras said his party’s victory marked an end to the “viscious cycle of austerity”. Referring to the neoliberal conditions set by the IMF, the European Commission and the European Central Bank, he said: “ The verdict of the Greek people renders the troika a thing of the past for our common European framework.”

3. Outgoing prime minister Antonis Samaras conceded defeated by acknowledging some mistakes. But he added: “We restored Greece’s international credibility”.

4. To Potami, the centre-left party could be the kingmakers in the new parliament, with a project 16 seats. Its leader Stavros Theodorakis has not ruled out a deal with Syriza. “It’s too early for such details,” he said.

5. The far-right Golden Dawn party is projected to come third in election, despite having more than half of its MPs in jail. Speaking from prison its leader Nikolaos Michaloliakos said the result was a “great victory” for the neo-fascist party.

6. Syriza victory has been greeted with alarm in Germany. The ruling CDU party insisting that Greece should stick to the austerity programme. But Belgium’s finance minister said there is room for negotiation with Syriza.

7. Leftwingers across Europe have hailed Syriza win. Spain’s anti-austerity party Podemos said Greece finally had a government rather than a German envoy. Britain’s Green Party said Syriza’s victory was an inspiration.

By Matthew Weaver, ICH

Complete story at - The 4th Media » Syriza Wins Greek Election: The End of the IMF-ruled ‘VICIOUS Cycle of AUSTERITY’

Yatsenyuk’s former spokesperson outraged by PM’s decision | Ukraina.ru

Yvanna Kobernik, the former spokesperson for Ukrainian Prime Minister Arseniy Yatsenyuk, comments on the government’s decision to charge education tax

"The new government is giving us hell. Bill No. 1578 aims to destroy everything we have fought for all these years," Kobernik writes on her Facebook account. "The Cabinet of Ministers hasn’t come up with anything better than to charge 20 percent value-added tax on education services. This measure would shut down music, sports and secondary schools, and it would prevent talented children from developing their abilities and taking part in extra-curricular education. It would destroy preschool education and shut down private schools, which make up only one percent of all schools nationwide," she notes.

The decision of the post-Euromaidan government aims to scale down education services and to stop the personal growth of children.

"From now on, we will have to pay cash on the nail and hire home tutors. Yatsenyuk, Jaresko (Ukrainian Minister of Finance – Ed.) & Co., are you and your children planning to live in California? The United States and the European Union provide extra benefits to parents paying for their children to go to private school. With such ideas, you will not last until March 1," Kobernik notes.

Kobernik, a journalist, host of the Fakty (Facts) TV show and editor in chief of the Svoboda Slova (Freedom of Speech) talk show, supported Euromaidan protesters from the very outset and was also Yatsenyuk’s spokesperson in 2010-2011.

Talka Note:  Deliberately blind, or deliberately delusional.  I'm not surprise by this; but this political insider is.  

Complete story at - Yatsenyuk’s former spokesperson outraged by PM’s decision | Ukraina.ru

Wolf Richter: Italy’s Crazy New Economy from Hell | naked capitalism

Yves here. Italy provides an intriguing example of how austerity inflicts damage on businesses. Here, one of the ways that the government is making its fiscal deficit look better is by paying companies that provide services to it slowly, or not at all.

By Wolf Richter, a San Francisco based executive, entrepreneur, start up specialist, and author, with extensive international work experience. Originally published at Wolf Street.

Italy is a country of entrepreneurs and of vibrant small enterprises. Or was. Now these businesses are dying.

Of its 5.3 million companies (as of December 31, 2013), 3.3 million are small, often family-owned outfits, according to Rome-based credit information provider Cerved Group. And another 900,000 are sole proprietorships, or 17% of all companies, a larger percentage than anywhere else in the EU, ahead of France (12%), Spain (10%), and Germany (10%). The remaining 1 million companies are corporations of all sizes.

And life in Italy has been exceedingly tough for small outfits.

Consumer spending has dropped sharply since the onset of the crisis. Industrial production continued its downward spiral in September and is down 0.5% for the first nine months of 2014 over the same period a year ago. Unemployment is 12.6%, and rising. Youth unemployment is at a catastrophic 43%, up from an already terrible 26% in 2010.

It doesn’t help that the government refuses, and I mean refuses – due to “technical” problems, as a minister explained – to pay its long overdue bills to these already strung-out businesses. It’s a shell game to lower Italy’s overall indebtedness and thus pacify the financial markets and Italy’s masters in Brussels [Italy “Would Love To” But Can’t Pay Its Bills This Year].

So this shouldn’t come as a surprise, given that the largest customer in the country, the government, refuses to pay its bills to the members of the private sector which then can’t pay their own bills: in September, non-performing loans held by Italian banks jumped 19.7% from a year ago, according to the Bank of Italy. At the same time, loans to the private sector dropped 2.3%.

Complete story at - Wolf Richter: Italy’s Crazy New Economy from Hell | naked capitalism

Yanis Varoufakis: Europe’s Crisis –The Rise of the Ultra-Right is the Left’s Fault

10 June 2014 — Yanis Varoufakis

Europe’s appalling handling of a euro crisis that was always going to happen, given its faulty architectural design,[1] has triggered an electoral result in the recent European Parliament elections that is a clarion warning that Europe is decomposing. And it is decomposing precisely because of the Left’s spectacular failure to intervene both during the construction phase of Europe’s economic and monetary union and, more poignantly, after the latter’s crisis had begun.

The international press has summed up the 2014 European Parliament election outcome as a sign that the economic crisis plaguing Europe has caused voters to be lured by the two ‘extremes’, meaning the ultra right and the extreme left. This is a verdict that the European elites, whose shenanigans are responsible for Europe’s deconstruction, are comfortable with. They see it as evidence that, despite ‘some errors’, they are on the middle road, with some wayward voters straying off the ‘right’ path both to the left and to the right. And they hope that, once growth picks up again, the ‘strays’ will return to the fold.

This is a misrepresentation of current economic and political reality. Europeans were not lured by the two extremes. They drifted to one extreme: that of the racist, xenophobic, anti-European right. Extreme, anti-European, leftwing parties saw no surge in their support anywhere in Europe.[2] For four years now, European institutions are the field on which incompetence and malice compete with one another in a bid to win the prize for the most inconspicuous obfuscation of the truth: (a) that the Eurozone’s construction was faulty; and (b) that, once the never-ending crisis had began, the elites were solely interested in shifting banking losses from the banks’ asset books onto the shoulders of the weaker citizens.

If the financial sector has been stabilised, it is because the combination of massive central bank liquidity and stringent austerity propped up finance, shielded bankers (without cleansing the banks), and reflated many of the burst bubbles. And this at the cost of untold damage on Europe’s real economy, social fabric, and democracies. The interesting question, however, is: Why has the Left not benefitted from the trials and tribulations of the Eurozone’s neoliberal design and from the great pain inflicted upon the majority by the neoliberal ‘cure’?

Complete story at - Yanis Varoufakis: Europe’s Crisis –The Rise of the Ultra-Right is the Left’s Fault

Euro austerity to fling Ukraine into new Maidan - Investment Expert (Video)

The IMF goes to war in Ukraine — RT Op-Edge

The IMF has approved a $17 billion loan to Ukraine. The first $3.2 billion tranche has arrived on Wednesday.

It’s essential to identify the conditions attached to this Mafia-style “loan.” Nothing remotely similar to reviving the Ukrainian economy is in play. The scheme is inextricably linked to the IMF’s notorious, one-size-fits-all “structural adjustment” policy, known to hundreds of millions from Latin America and Southeast Asia to Southern Europe.

The regime changers in Kiev have duly complied, launching the inevitable austerity package – from tax hikes and frozen pensions to a stiff, over 50 percent rise on the price of natural gas heating Ukrainian homes. The “Ukrainian people” won’t be able to pay their utility bills this coming winter.

Predictably, the massive loan is not for the benefit of “the Ukrainian people.” Kiev is essentially bankrupt. Creditors range from Western banks to Gazprom – which is owed no less than $2.7 billion. The “loan” will pay back these creditors; not to mention that $5 billion of the total is earmarked for payments of – what else – previous IMF loans. It goes without saying that a lot of the funds will be duly pocketed – Afghanistan-style – by the current bunch of oligarchs aligned with the “Yats” government in Kiev.

The IMF has already warned that Ukraine is in recession and may need an extension of the $17 billion loan. IMF newspeak qualifies it as “a significant recalibration of the program.” This will happen, according to the IMF, if Kiev loses control of Eastern and Southern Ukraine – something already in progress.

Complete story at - The IMF goes to war in Ukraine — RT Op-Edge

Why young people aren't rising up: our readers respond | The people's panel | Comment is free | theguardian.com

This week, we published an article by Costas Lapavitsas and Alex Politaki which asked why Europe's young people don't riot any more. The article provoked a long and thoughtful discussion about the reaction to austerity and unemployment, with more than 800 comments. Here we highlight some of the replies from young people who explain why they don't take to the streets in protest:


LondonRoots: 'No obvious route to lasting change'

I am relatively lucky in that I can sustain myself through self-employment at 29. I get approx £10,000 per year pre-tax. My partner has just finished a science PhD at 25 and may get a job on around £25,000 per year pre-tax if she's lucky – although of course she may get nothing but McDonald's. Still, every month we pay £800 in rent/bills (not including food). Suburb of Stockport/Manchester, no frills like Sky TV/dishwasher.


spinnyspace: 'Peaceful protest is treated like a riot'

Protesting has become more than a hazardous pastime. Once upon a time we were allowed to organise a march or a public protest. Today young people face a far more intolerant police force and state. Peaceful protest nowadays is treated like a riot by authorities. Today it's a bonus just being able to walk away after a march – you're more likely to be arrested or worse. And soon it will be water cannons with unknown chemicals pointed at you. So yes, there is a lot of apathy now; that's the alternative to giving in to anger.


scrotgrot: 'It's not worth being blacklisted'

I'm 22, politically engaged, and quite ardently against austerity and all the rest of it. But you should see the number of articles I've been about to share on Facebook (don't scoff too hard, that's how revolution spreads these days), but thought better of it at the last moment. Because we know they're always spying on us – even before the NSA revelations, I'd say that was the underlying assumption. Our generation knows corporations, not governments, rule the world, and we must follow their moral codes. It's not worth going to a protest, getting filmed, photographed or, heaven forbid, written up by a police officer. Because we know they all share their blacklists around and it will ruin our entire lives.


maiaH: 'Elites play dirty tricks with campaigners'

To all those saying violence doesn't work: what was the biggest march in UK/biggest march around the world ever? Against the Iraq war – a single issue. The UK could easily have said no. What's the greatest UK violence in recent decades? IRA. Did they get what they wanted? Most of.

Complete story at - Why young people aren't rising up: our readers respond | The people's panel | Comment is free | theguardian.com

CC Photo Google Image Search.  Source is upload.wikimedia.org  Subject is Day 60 Occupy Wall Street November 15 2011 Shankbone 18

Bill Black: The Kamikaze Economics of Forcing Austerity on the Ukraine | naked capitalism

By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Originally published at New Economic Perspectives

We all understand why Russia is waging economic war on the Ukraine, but why is Obama doing so?  The New York Times’ web site has posted a remarkable Reuters story (dated April 5, 2014) entitled “Ukraine PM Says Will Stick to Austerity Despite Moscow Pressure.”

The Kiev government will stick to unpopular austerity measures ‘as the price of independence’ as Russia steps up pressure on Ukraine to destabilise it, including by raising the price of gas, Prime Minister Arseny Yatseniuk told Reuters.

“Unpopular austerity measures” are, of course, among the best things Ukraine can do to aid Russia’s effort to “destabilize” the Ukraine.  Indeed, Yatseniuk admits this point later in the article.

The subtext of Russia’s message to Ukraine’s Russian-speaking population, he said, was that they would enjoy higher living standards in Russia, with higher wages and better pensions and without the austerity that the Kiev government was now offering

‘They’re saying: if you go to Russia, you’ll be happy, smiling, and not living in a Western hell,’ he said.

‘They (the Russians) are trying to compensate (for the Western sanctions). But we can pay the price of independence,’ he said, with financial support from the West.

So, our strategy is to play into Putin’s hands by inflicting austerity and turning the Ukraine into “a Western hell.”  Not to worry says our man in Kiev, because he’s sure that ten million ethnically-Russian citizens of Ukraine will gladly “pay the price of independence” to live in “a Western hell.”  That strategy seems suicidal.  Indeed, Yatseiuk emphasizes that he knows the strategy he is following is suicidal.

Complete story at - Bill Black: The Kamikaze Economics of Forcing Austerity on the Ukraine | naked capitalism

On Location: Why eastern Ukraine fears the new regime in Kiev: A Fisherman’s tale

On Location: Why eastern Ukraine fears the new regime in Kiev: A Fisherman’s tale from GlobalPost on Vimeo.

Meanwhile Back in the Colony of Ukraine

The neocon Ukraine propaganda onslaught abated slightly over the past week more than likely due to the sheer overkill of the shrill emissions from the state-corporate media propaganda organs. One could also suspect that the leakage of the truth that the US taxpayers are being forced to back an illegally installed coup government filled with neo-Nazis had a bit to do with it. With the murder of Right Sector leader Oleksandr Muzychko aka Sashko Bily by police bringing threats of reprisals from the western backed thugs who provided the muscle during the hijacked street protests it was time to clean up the riff raff before the narrative spun out of control. This coming immediately on the heels of a viral internet video of sitting members of the new government attacking and beating a state television executive in his office.  While the unelected regime of Arseny “Yats” Yatseniuk was locking down the spoils from the coming IMF ruination of Ukraine’s public services, looting of pensions and crushing austerity it was time to clean up the rabble.

The retrenchment of the Neocon-EU-NATO axis of evil and the propaganda machine has been launched as the Night of the Long Knives style purge continues. The newly installed "Yats" has now formally accused the ousted elected President Viktor Yanukovych for personally being responsible for that mysterious sniper fire that provided the impetus for his overthrow and the installation of the current puppet regime. Not only that but that Russian forces had acted as accomplices -just watch this morph into Putin's personal involvement once the spin evolves and is fed through the Washington Post echo chamber.

Complete story at - Meanwhile Back in the Colony of Ukraine

Ukrainians Get IMF’s Bitter Medicine | Consortiumnews

Exclusive: Though lacking legitimacy from national elections, Ukraine’s coup regime has approved a harsh IMF austerity plan that hits Ukraine’s “99 percent” the hardest and asks little from the country’s “1 percent,” including the corrupt “oligarchs,” reports Robert Parry.

By Robert Parry

It’s a safe bet that most of the Ukrainians who flooded Maidan Square in Kiev in February did not do so because they wanted the International Monetary Fund to make their lives even more miserable by slashing subsidies for heat, gutting pensions and devaluing the currency to make everyday goods more expensive.

But thanks to the U.S.-backed coup that ousted elected President Viktor Yanukovych and replaced him with a regime including far-right parties, super-rich ”oligarchs” and technocrats with little sympathy for the suffering of average people, that’s exactly what happened. Although lacking legitimacy that would come from national elections, the coup regime pushed through the demands of the Washington-based IMF.

The process began just 10 days after the violent Feb. 22 coup that forced Yanukovych to flee for his life. IMF officials landed in Kiev on March 4 to hammer out a deal that acting Prime Minister Arseniy Yatsenyuk, himself a chilly bank technocrat, has acknowledged is “very unpopular, very difficult, very tough.”

What is also striking about the IMF plan is that it puts virtually all the pain on average Ukrainians. There is nothing in the economic “reform” package that extracts some of the ill-gotten gains from Ukraine’s ten or so “oligarchs,” the multimillionaires and even billionaires who largely plundered Ukraine’s wealth after the collapse of the Soviet Union in 1991.

   

Complete story at - Ukrainians Get IMF’s Bitter Medicine | Consortiumnews

Dear Ukrainians, Your Gas Bill Goes Up By 50% On May 1, Have A Nice Day | Zero Hedge

We assume this is not what President Obama meant when he said "costs"...

*UKRAINE TO RAISE GAS PRICES FOR HOUSEHOLDS 50% FROM MAY 1

*UKRAINE TO RAISE GAS PRICE FOR HEATING UTILITIES 40% FROM JULY

As we warned previously, "the honeymoon is over" and it seems, from today's address, President Obama is about to mandate who and where the free market for natgas delivers it supply.

Of course, this is not about to get better anytime soon:

*NAFTOGAZ UKRAINY SAYS GAS DEBT TO GAZPROM IS $1.7B: KOBOLYEV

But President Obama is disappointed in the free market.

“We’ve already licensed, authorized the export of as much natural gas each day as Europe uses each day; but it’s going into the open market; it’s not targeted directly,” President Obama says.

“It’s going through private companies who get these licenses and they make decisions on the world market about where that energy is going to be sold,” Obama says at news conference in Brussels

Dear Ukrainians, Your Gas Bill Goes Up By 50% On May 1, Have A Nice Day | Zero Hedge