By Vasiliy Muravitskiy
Translated from Russian by J.Hawk
The IMF is deciding: shall we continue this country’s and
this government’s agony, or shall we end it at once? Looks like they have
decided to continue it.
Deputy Chair of the European Commission Kristalina
Georgiyeva acknowledged on Monday that Ukraine will need $40 billion over the
next several years, far more than creditors are planning to lend to Ukraine.
Kiev preferred not to notice this statement, but another EU official openly announced
that the process of reconstituting Ukraine will be “a job for a whole
Poroshenko himself recently noted that 35% of Ukraine’s
industry that still existed in 2013 no longer operates. 10% of this industry
was simply destroyed—in other words, every tenth factory, mine, plant.
Yatsenyuk’s Cabinet of Ministers officially predicts annual inflation of 40% in
2015. If that’s the official estimate, what will it be in real life?
Yatsenyuk’s swaggering notwithstanding, there is little hope
for an IMF tranche. IMF gave Ukraine only $4.6 billion out of $7.4 billion
promised in 2014. This in a situation where Kiev was making regular debt
servicing payments. In other words, IMF is lending just enough money to let a
little oxygen into the lungs.
Today, the sum total of Ukraine’s politics is this: will the
IMF give a new tranche or not. And how much. And that’s it.
Nobody seems to have noticed Georgieva’s earlier words,
despite their import. Ukraine no longer has a real estate market, or a car
market, the household appliance market is collapsing, food prices are rising.
Here’s what they said about Ukraine: it had suffered a
stroke. The economy is in a state of artificially induced coma. It is getting
expensive medications through an IV, but the process of rehabilitation, of
learning how to walk again, how to speak, how to perform ordinary day-to-day
activities, will take years.
An entire generation! An entire generation will have to
answer for what happened in Kiev in 2013 and 2014, and will have to repair
Maidan’s aftermath. If Europe had already acknowledged it, when will my
J.Hawk’s Comment: So far everything points to the option 2from my analysis below. Kiev will receive just enough financial sustenance to
avert a default—but not a cent more. Europe really has no idea what to do with
Ukraine any more. All they hope for right now is to sustain that state in
existence long enough for it to figure out what to do with itself: fix its own problems,
disintegrate, make peace with Russia, anything at all that moves the situation