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Ukraine’s Fate in IMF Hands

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Ukraine's Fate in IMF Hands
Original written by Ukrainian journalist Aleksandr Sabiy and published here by Korrespondent.net; translated from Russian by J.Hawk
Ukraine is yet again facing the horrifying threat of a default. Nobody is talking about it but–only until the next resumption of negotiations with the creditors’ committee. We’ve already seen how good Nataliya Yaresko is at reaching agreements. Until recently, the negotiations were held in the open, now they are conducted from Washington (because that’s where Ukraine’s Finance Minister is trying to reach agreement with the creditors), and there are no news at all. The failure of negotiations will be properly perceived as the logical finale of the “eurointegration” policy of the Poroshenko-Yatsenyuk government. EU Association has not brought the Ukrainian people any improvements, and the creditors’ inflexibility (Western creditors, please note) will finish off the country’s economy.”That which we expect from the Washington negotiations has already happened. Three years ago, on the night of 27 October 2011, EU country leaders at a Brussels summit agreed to write off 50% of Greece securities’ debt to private investors to the tune of 100 billion euro out of 210 billion of Greece’s obligations to banks.  Moreover, Greece additionally received 100 billion euro of aid from the EU and the IMF. All of that Greece received in return for fulfilling IMF conditions. Conditions which are nearly identical to those being fulfilled by Ukraine for the sake of rather less aid. Has it helped Greece? We already know the answer,” writes the former NBU head Sergey Arbusov, commenting the possible outcome of the negotiations.

Naturally, the IMF approach failed: reducing budget expenditures and individual incomes only exacerbated social inequality, poverty, and the increase in protest sentiments. At the time, incidentally, the Greece’s national debt increased by 46% over five years. Here it is growing even faster. While 2014 GDP fell by 6.8% and in 2015 in the first six months alone it fell by 16.3%! The economy is not receiving any resources, administrative limitations and political instability is frightening off the investors.

Even if the negotiations are successful, these problems will not go anywhere, just as the hapless government will not go anywhere, government which is incapable of saving its population from mass impoverishment. Greece is not being helped today because they are “just like us,” but because it is a member of the EU and the Eurozone. Those are rather different things. Nobody will “give us a buck” in Europe. Incidentally, we’ll see, maybe we’ll have enough and turn down IMF recommendations and save what’s left of the country.

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