Ukraine To Get $40-Billion In Emergency Funding

Linda Kinstler, Quartz: Ukraine is heading for a total economic collapse

When IMF Managing Director Christine Lagarde announced Ukraine’s new, $17.5 billion bailout package Thursday morning, she suggested it would be a “turning point for Ukraine,” which stands to receive $40 billion in relief funding from various sources over the next four years. “This new four-year arrangement would support immediate economic stabilization in Ukraine as well as a set of bold policy reforms aimed at restoring robust growth over the medium term and improving living standards for the Ukrainian people,” Lagarde said from Brussels.

But it will take a lot more than IMF billions to dig Ukraine out of economic crisis, and to implement the reforms Lagarde’s IMF team has demanded. In order to survive, Ukraine will need to fashion a new social contract with its citizens, one that sheds hundreds of social services left over from the Soviet era, which Ukraine’s nomenkatlura, its upper-middle class civil servants, still enjoy.

Update: Ukraine to get $40-billion in funding, IMF chief says -- Reuters

WNU Editor: Ukraine is not heading for a total economic collapse ... it is already there. And even though this IMF loan is a lot of money .... it is still a loan that needs to be paid back one day, and (this is the sad part) it is a drop in the bucket for what Ukraine really needs.

This Ukrainian Politician Tries To 'Straddle' Both Sides

Ukrainian politician Viktor Medvedchuk (right) and Russian President Vladimir Putin in Kyiv on July 27

David M. Herszenhorn, New York Times: Friend of Putin Assumes Role of Negotiator in Ukrainian Conflict

KIEV, Ukraine — Viktor V. Medvedchuk often turns up in places where only buddies of President Vladimir V. Putin of Russia get to go, like the V.I.P. section at a Formula One championship in Sochi, Russia, in October. He sat just a few feet from Mr. Putin next to the actor Steven Seagal, another pal of the Kremlin leader.

Mr. Medvedchuk’s close ties to Mr. Putin are no secret, and he was in Belarus on Wednesday for negotiations between the Ukrainian government and Russian-backed separatists waging war in eastern Ukraine. But in a sign of the inscrutable nature of Ukrainian politics, he was there not on behalf of the Russian leader or the separatists but for President Petro O. Poroshenko of Ukraine and the Ukrainian State Security Service.

WNU Editor: Viktor V. Medvedchuk reflects on how screwed up the Ukraine situation has become. He has family on both sides of the border .... and he is distressed to see the conflict escalate to the level that it has. He tries to do something to alleviate the suffering .... but it is not enough. He knows all the players, he knows why they are fighting, and he has influence .... but that is also not enough. This is why the conflict in Ukraine is going to take a long time to settle down and correct itself .... no one has control of the situation anymore .... it has to burn itself out before people like Viktor V. Medvedchuk can play a role in mediating the different sides.

Does Anyone Care That Ukraine's Economy Has Just Collapsed?

Mark Adomanis, Forbes: Ukraine's Economy Is Collapsing And The West Doesn't Seem To Care

Earlier reports, including my own, that Ukraine’s currency lost 30% of its value were not entirely accurate. The reality was actually quite a bit worse: the hryvnia shed roughly 50% of its value over the course of just two days, a stunning rout that places the country a hair’s breadth away from default.

WNU Editor: Mark Adomanis is right when he says the following ....

.... Unless the West steps in to massively aid Ukraine’s economy in the very near future the country will simply not be able to afford the “anti-terror operation” in the East. Justification has nothing to do with it: without money, it just isn’t possible to field a modern military. Someone has to pay the salaries of the soldiers fighting in the Donbas, someone has to buy the gasoline necessary for to get them there, and someone has to pay for the ammunition they use. Given its precarious state finances Ukraine’s ability to do this has always been constrained, but now it’s about to run out.

Ukraine is out of money .... and if anyone needed more proof on how out of touch the West is when it comes to Ukraine's finances .... the following takes the cake .... Donors plan Ukraine conference in April to raise $15 billion (Reuters). April!!!!!! They are going to wait until April where they will try (and the operative word here is that they will try) to raise some money?!?!?!?! April is too late .... in fact .... everything in Ukraine is being cut now or is being closed down .... the collapse of the currency last week was the final nail in the coffin.

On a personal note .... readers of this blog know that I have family in Ukraine. Had a long conference call with all of them today ....to say that the situation is dire is an understatement. Fortunately .... my family in Ukraine has resources that will help them survive .... but they are the lucky ones .... for most Ukrainians 2015 is going to be an incredibly difficult year. My prediction .... even if the war ends today .... the economic collapse of Ukraine is going to spur a massive migration out of the country. Do not be surprised if by this time next year Ukraine would have lost 1 - 2 million of its best and youngest.

The Ukraine Currency Collapsed Today

Valeria Gontareva, the head of Ukraine's Central Bank, said there was “panic” on the market in connection with ongoing fighting with pro-Russian militants in Ukraine’s east. Photo: Reuters

Quartz: Ukraine’s currency is plummeting (again, and even further)

WNU Editor: On my last trip to see family and friends in Ukraine (2 years ago) .... I decided to leave one bank account active since it would be easier for me to have money already there when I do my return visit to spoil family and friends. I left the equivalent of a few thousand U.S. dollars ... and thought no more of it. The currency crashed about 45% today. Sighhh .... I figure I have lost over 90% of the value of my money in Ukraine in the past two years. And here is an easy prediction .... it is going to get lower. On a side note .... even the IMF is now figuring out that Ukraine is a lost cause and they may no loner want to fund its war .... IMF wary of providing Kiev with extra bailout funds (RT)

More News On Ukraine's Economy

Ukraine’s Hryvnia Plunges After Rate Rise -- WSJ
Ukraine currency plummets after interest rate hike -- The Guardian
Collapsing economy is second front in Ukraine's war -- USA Today
Ukraine's hryvnia plunges after foreign currency auctions scrapped -- Reuters
Ukraine on the Edge of an Economic Crisis -- Economy Watch
Ukraine's Economy Is At The Breaking Point -- Forbes

Ukraine President: "Ukraine Will Never Be A Federation, It Will Remain A Unitary State,"

© Nikolay Lazarenko/TASS

ITAR-TASS: Ukraine will not be a federation but will remain a unitary state —- Poroshenko

85% of Ukrainians are in favor of Ukraine’s going on as a unitary state, Poroshenko told a briefing in Kharkiv

WNU Editor: I would like to know who that 85% in support of a unitary state are .... because the last thing that people are focused on right now is supporting a system where Kiev has all the power and authority to run things as they have since Soviet times. But since Ukrainian president Poroshenko has already made it very clear that Ukraine will not be a federated state .... what is the point of setting up this constitutional commission.

Sighhh .... regular readers of this blog know that even before the war brokeout, I have always been an advocate of federalism .... that for Ukraine to survive as a unified state it would have to become a federated country in order to respect the different cultural and ethnic compositions of the country. Since I now live in Canada .... I have used the Canadian model to push this case. Unfortunately .... Poroshenko is more interested in keeping power than sharing it .... hence the conflict.

On a side note .... President Poroshenko will be making a serious mistake if he is primarily focused on (and hoping for) the following .... 'No doubt' US will provide arms: Ukraine president (AFP). In the meantime ... discontent and frustration against his rule is building .... Hundreds trying to break into Ukraine president’s office in Kiev (RT).

Draft Dodging And Evasion Is Becoming A Growing Problem For The Ukraine Government

ITAR-TASS: Ukrainians grow unwilling to serve in the army — media

WNU Editor: The above report is from Russia .... and even though Russian media coverage is biased against the Ukraine government .... this report is very accurate. Even among my own family in Ukraine .... all of the sons of my cousins who are of military age left the country last summer .... they all expected the fighting to intensify and they also all expected the introduction of conscription by the Ukraine government ... and they have been proven right.

In the coming weeks and months I expect draft dodging to escalate as the fighting escalates .... support for the Ukraine government in its war against pro-Russian rebels in the east does not have the overwhelming support that many in the Ukraine government are trying to paint ... and if given the choice of fighting in a war or leaving the country .... many are making the choice of leaving.