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Originally Posted by DKM
No, he's leaving out the very important part of the deal where the creditors gave up 20% of the bond value to agree to these new bonds (restructuring Yanukovych debts). So if the economy grows faster, they have to "repay" the haircut, depending on how fast it grows. He leaving this out, the most important part of the deal, was to misinform his listeners as to the intentions of the prior government.
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This "very important part" is not all that important when you look at the bigger picture.
When you look at the
Ukraine's external debt chart overall, you can see that "Yanukovich debt" starts piling up, as soon as he "completes negotiations with EU on an Association Agreement." (After all, it's a myth that Yanukovish was interested exclusively in ties with Russia.)
With Association Agreement however came the demands for reforms from the "lending institutions" you know, the demands for *austerity,* but as soon as Yanukovich tried to implement them, he ended up with serious social unrest;
"On September 9, 2011 the Ukrainian parliament adopted the law in the first reading. According to the law, sixteen different categories of citizens would lose some of their privileges. Hundreds of Chornobyl rescue workers and Afghan war veterans took to the streets in protest. On September 20 at least 3,000 people protested near the parliament in Kyiv alone, almost breaking into the building. A two-meter-high iron fence was built around the parliament building the following night in order to prevent similar outbreaks."
And that was Yanukovich's attempt to cut back on the "order and the size of benefits being paid out to persons affected by the Chornobyl disaster, children of war, and military veterans."
After the social unrest, he didn't dare to touch the pension reforms, and
"it became clear during the review that without pension reform, the government would not receive the next disbursement ( of IMF loans.)"
https://carnegieeurope.eu/2012/04/02...ears-pub-47702
But the damage was already done, and Yanukovich, in his strive for "EU association" already ended up with increased external debt.
However when you look at the GDP to governmnet debt ratio, it becomes clear, that the situation was nowhere as bad for Ukraine during Yanukovich times, as it became after the coup d'etat in 2014;
https://tradingeconomics.com/ukraine...nt-debt-to-gdp
So don't point at Yanukovich as the "culprit of it all" a reason for "piled up IMF debt."
Things got much worse for Ukrainians under Yatzenuk/Poroshenko government.
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This "American" born official saved Ukraine's finances through its darkest days. There were and still are a lot of debts piled up from buying Russian gas to feed eastern oligarchs and it will take some time to pay it back. Since he is a politician this makes sense for him to leave out the important facts.
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This is misinformation/myth that you are deliberately spreading around, having political goals in mind, since the chart of the GDP to external debt ratio doesn't prove your statement.
The "eastern oligarchs" are not much worse than the "western oligarchs" in this respect, since it was not only about "feeding eastern oligarchs" by providing Ukrainians with cheaper gas, but making the lives of the ordinary people in Ukraine more bearable.
When the "Western oligarchs" took over, the results
didn't wait to manifest themselves;
"EuroMaidan was a disaster for the ordinary Ukrainians, who lost their (already low) standard of living and now are forced to exist on the level of Central African poverty (with many categories getting less then $5 a day with food prices on the level close (and in some categories such as chicken meet, exceeding) the prices of the USA supermarkets. Minimum pension in Ukraine which is received by two million of Ukrainian citizens is $43 a month ($1.4 a day); this is really Central African level! Average salary our side Kiev is not much higher (around 2000 grivna, which with
exchange rate 22 grivna (UAH) to dollar is around $90 or $3 a day). Many people can afford only bread and milk (the cost on milk is lower then in the USA).
EuroMaydan was the result of cynical manipulation of Ukrainian population by Western powers, which lured them into self-destructive actions by the carrot of European economic integration (which implicitly was associated with Northern Europe standard of living, not Bulgarian standard of living). Nobody tried to warn them about the destiny of Bulgaria and Romania within the EU.
Recent data of the Ukrainian state statistics are shocking. During the first quarter of 2015, the Ukrainians began to spend on products for 20% less money than before. For a lot of people that means hunger. Real hunger. In the first place then refuse to buy canned fruit, meat and fish products - their sales fell by 37%. The demand for fish decreased 30%. Same decrease for variety of cereals, seafood, prepared meat products, sausage. Almost the same drop with eggs, fresh meat and vegetables - their sales have dropped by 25%. And much less dangerous (which should probably be welcomed) 20% drop of sales of soft drinks, butter, pasta and confectionery. Buyers increased purchases only salt - 11% more, and margarine - 2%.
...Data on the consumption of eggs, meat and vegetable are scary. It means that people save on the most valuable that could not be replaced - on their health. That is given when people reduced the consumption vital foodstaff. Foodstaff that is basis of any healthy diet. According to nutritionists, people over the age of 35 should consumed meat 2-3 times a week with lots of vegetables. In the remaining days of animal protein can be replaced with poultry and fish. Who among Ukrainian seniors (with average pension around 1000 grivna and exchange rate 25 grivna to one dollar) eat meat three times a week? Very few. Mainly pensioners who still are working.
In other words Yatsenyuk initiated economic shock therapy on already impoverished nation. Killing in process a lot of people. The top 1%, including Mr. Yatsenyuk himself, never feel this pain. It's only rank-and-file 90% Ukrainians who suffer. Yatsenyuk likes to compare himself with Margaret Thatcher, but while he is definitely a reckless neoliberal, not everybody is buying this self-characterization."
This was the price Ukrainians had to pay for the "EU Association," with the "gas wars" in Europe as the centerpiece of it, since the
record clearly shows that an attempt to break Ukraine away from economic dependency on Russia ( energy dependency first of all) was the ultimate goal of the "Western oligarchs," in pursuit of Brzesinsky doctrine.
So this American born official ( Yaresko that is) didn't "save" Ukraine from anything.
She simply postponed the inevitable, keeping Ukraine in financial bondage, being more and more entangled in debt to the "Western oligarchy."
To sum it all up, all this leads to the reasons why I don't consider Ukraine to be a politically-stable place.
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The other important fact is they will get settled and negotiated down from ever having to pay $9 billion extra. Nice try though, A for effort.
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Yeah-yeah-yeah...
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