Go to ...

The Newspapers

Gathering and spreading news from various Russian Newspapers

The Newspapers on Google+The Newspapers on LinkedInRSS Feed

Friday, July 21, 2017

Kiev is waiting for a saving ten billion dollars

Ukraine hopes to receive in 2016 as much as $ 10 billion from international lenders. Big part of expect from the IMF. However, whether the Finance Minister to be so confident in getting these loans? And most importantly – how these loans will affect the lives of ordinary people in the country, even if the West still overwhelm Kyiv dollars?

Ukraine in 2016 plans to raise from international financial institutions around 10 billion dollars. A large part of 5.8 billion – should come from the International monetary Fund, said the Minister of Finance Natalia Yaresko.

“The political support of the West is expensive, but still need support and the business community”

Partner countries should help Ukraine another $ 4.4 billion. So, Jaresko said, the U.S. government promised $ 1 billion, even the Japanese government more than 1.3 billion dollars. The EU should grant Ukraine a loan of 1.2 billion euros, plus / 0,17 billion EUR of grants. The Polish government promises € 100 million, Germany – EUR 300 million, plus 150 million euros for investment projects.

EBRD and EIB are ready to give each at $ 1.1 billion for new investment projects. From the world Bank Kiev is waiting for $ 1.5 billion – also on new investment projects.

Kiev hopes by loans to replenish the gold reserves, which now only reach $ 13.3 billion. The national Bank of Ukraine expects to increase gold reserves in 2016 to 19.6 billion dollars. That is, from $ 10 billion in loans should go the gold reserves of 6.3 billion dollars.

The task of the present leadership of the Ukrainian regulator, I must say, may not be able to do.

As the IMF considers Ukraine’s foreign exchange reserves? The Fund does not look at the total volume, and net international reserves – that is reserves without IMF loans. Moreover, the national Bank still may not spend these funds for their needs. The IMF was forbidden to use them for foreign exchange intervention, purchasing of gas and repayment of the foreign debt (only their own).

For 2015 the IMF has put before the head of the NBU Valeria Gontareva, a seemingly simple task – to increase net foreign exchange reserves to 2,098 billion, says Ukrainian economist Oleksandr Okhrimenko. However, the challenge was to the nines failed. “In practice, decided on 1 December 2015, the net international reserves of Ukraine not only has not increased, but decreased by 0.6 billion and reached a critical level of $ 1.2 billion. For comparison: in 2013, the net international reserves of the Ukraine were at the level of 15.2 billion” – says Okhrimenko.

The situation is really catastrophic, because Ukraine is in reality can only use these 1.2 billion Is very small. First, despite the restructuring of private Eurobonds, interest on loans Ukraine will still have to pay. Secondly, a moratorium on the payment of Eurobonds of Russia can not last forever, on payment of the debt must agree on what requests including the IMF. Thirdly, Kiev is the currency needed, at least to buy imported gas, coal, and in General to maintain the foreign exchange market.

The IMF still thinks

The Minister of Finance of Ukraine expects that the IMF in the near future will decide on the allocation of the country for the next tranche of $ 1.7 billion (according to the program from March 2015). However, while even the date of the meeting of the Board of Directors of the IMF, which must be decided, not yet approved.

This loan is important for Ukraine not only because it will replenish the reserves. It is also the fact that a positive decision from the IMF depends on the fate of other pledges the country money. This will allow Ukraine to attract additional 2.3 billion dollars of financial assistance: $ 1 billion in the form of guarantees from the US government, as well as a credit tranche from the European Union and the world Bank.

In fact, however, the IMF still does not have a clear opinion – to continue financing of Ukraine or not, said Alexander Okhrimenko, after analyzing the answers about the Ukraine Director of the communications Department of the IMF Jerry rice.

As debts rose, Ukraineemail believes that the IMF will send to Ukraine next mission, which will assess the implementation of the country programme. According to the analysis, the IMF decided to revise the program of expanded financing, the parties will again have to sign a new Memorandum, which will be new terms of the loan Ukraine.

“It is clear that one of the requirements of the new program of financing Ukraine will negotiate with Russia and the compromise Eurobonds of Ukraine, which belong to Russia. Failure to do so can “freeze” funding for the new program. But the IMF is not going to intervene in the conflict”, – said Okhrimenko.

The Ukrainian economist believes that there is a high probability that the next IMF mission will leave Ukraine, and didn’t sign a new Memorandum and a new funding program. “This is well understood in the IMF, and therefore they are not ready to name even approximately the date of commencement of the provision of loans to Ukraine under the new eff. And here is the very real situation when all of 2016, the IMF mission will arrive to Ukraine and to negotiate, but no loans from the IMF will not be in 2016 or in subsequent years”, – said Okhrimenko.

Recall that these 1.7 billion dollars, which Ukraine hopes so, she’s been waiting for six months. The last time the Foundation has given money to Ukraine at the end of August. And here is the promised third loan September 15 and the fourth tranche on 15 December 2015, the IMF does not give still.

As a result, last year Ukraine received from the IMF, 6.7 billion dollars (less than I should have), of which $ 1.4 billion went straight back to the Fund for payment of the old loan to the IMF.

Will the loans to run the economy of Ukraine?

However, for the country’s survival, given that the economy sagged seriously, spending budget under pressure from the IMF trimmed, and to pay the debts Russia Kiev refused, need now is not so much of borrowed funds. And loans for gas to Kiev as given by European institutions. The more money given is not free, but for the interest and buy into them reversible gas margins from the resale of which again put it in his pocket European company. Finally, there are payments from Gazprom for gas transit.

“Ukraine’s economy is now in a difficult position. External debt about equal to GDP, or about 128 billion dollars. Thus in 2014, the year the fall in GDP was 28%, and for the first three quarters of 2015 – another 27%. The size of annual GDP per capita of Ukraine has fallen approximately to 3 thousand dollars, and it was relatively accepted by the population”, – said Dmitry Lukashov from IFC Markets.

He believes that if Ukraine will receive all $ 10 billion of loans this will allow it not only to live in 2016, but even to carry out small infrastructure projects. A portion of this amount may be spent on refinancing of old debts.

In any case, the common people of the country thanks to these billions of dollars in loans unlikely to feel any improvement in your life. Because most of these money will not be invested in the real sector of the economy.

“The key factor is the behaviour of private business. Especially in the West. And here large-scale investments, we do not see. Means no modernization of the economy of Ukraine will not. At the time, the US and Europe have made large-scale primarily private investments in Turkey and Poland. It is private money ensured the economic success of these countries. The political support of the West is expensive, however, need support even and business circles”, – says the newspaper VIEW Director of the analytical Department of “Alpari” Alexander Razuvaev.

While Western business is only running from the Ukraine in droves.

Thus, Ukraine in any case waits for the preservation of the current policy, the final loss of the industrial capacity and the preservation of poverty, concludes the expert. In fact, so Razuvaev believes that Ukraine could easily credit of Western money to repay Russia the $ 3 billion. “No crash in Ukraine all the same will not be, however, a serious improvement, too. Because trade relations with Russia and with the countries of the Eurasian Union, the Ukraine broke, and to offer Europe she has nothing,” – says Razuvaev.

Ukrainian European integrators have even started to complain about the fact that Europe actively protects its markets from foreign goods, even from the Ukrainian. The leader of “Ukrainian choice” Viktor Medvedchuk on his page in Facebook said the head of Ministry of agrarian policy of Ukraine Oleksiy Pavlenko has complained that the scandals around poor quality of Ukrainian eggs that are exported to Israel, and honey, supplied to the Czech Republic, is politically motivated. The incident with the Ukrainian product, according to the head of the Ukrainian Minister Alexei Pavlenko, “are attempts to force the Ukrainian agricultural exports in external markets”. “I want to ask the “reformers” only one question: how in this case they were going to promote Ukrainian goods on the markets of European countries in the framework of the FTA with the European Union?” – said Viktor Medvedchuk.

Recall that in mid-January in Israel, there was a scandal regarding poor-quality products of Ukrainian farmers, which the hospital began to be affected, one person died. It turned out that the eggs, recently delivered to local stores contaminated with Salmonella. And last week, the Czech President urged to abandon the Ukrainian honey, as this honey is, according to him, contains antibiotics, told Czech newspaper Blesk. Ukraine had 19 January to temporarily suspend the issuance of veterinary documents for the export of honey to the EU due to detection of the Czech Republic banned substances in this product.

“The main goal of Europe is to throw the most active population of Ukraine to the powerless semi-slave labor market. Europe needs migrants, but let they will work, and will not be from North Africa and the Middle East and with Ukraine,” – says Razuvaev.

Related posts:
The export of American gas to Europe was a myth
Ukraine has estimated the damage from a lost along with the Crimea property
The collection truck system "Platon" can double
Duties on Russian fertilizers Ukraine has its own peasantry


More Stories From Economy