If You Think Ukraine's Border War with Russia Is Bad, Check Out Its Fight with International Lenders

[polly7]

The Ukraine-IMF debt negotiation shows is why finance has become the preferred mode of geopolitical warfare.

By Michael Hudson / CounterPunch February 16, 2015

The fate of Ukraine is now shifting from the military battlefield back to the arena that counts most: that of international finance. Kiev is broke, having depleted its foreign reserves on waging war that has destroyed its industrial export and coal mining capacity in the Donbass (especially vis-à-vis Russia, which normally has bought 38 percent of Ukraine’s exports). Deeply in debt (with €3 billion falling due on December 20 to Russia), Ukraine faces insolvency if the IMF and Europe do not release new loans next month to pay for new imports as well as Russian and foreign bondholders.

Finance Minister Natalia Yaresko announced on Friday that she hopes to see the money begin to flow in by early March.[1]] But Ukraine must meet conditions that seem almost impossible: It must implement an honest budget and start reforming its corrupt oligarchs (who dominate in the Rada and control the bureaucracy), implement more austerity, abolish its environmental protection, and make its industry “attractive” to foreign investors to buy Ukraine’s land, natural resources, monopolies and other assets, presumably at distress prices in view of the country’s recent devastation.

Looming over the IMF loan is the military situation. On January 28, Christine Lagarde said that the IMF would not release more money as long as Ukraine remains at war. Cessation of fighting was to begin Sunday morning. But Right Sector leader Dmytro Yarosh announced that his private army and that of the Azov Battalion will ignore the Minsk agreement and fight against Russian-speakers. He remains a major force within the Rada.

How much of Ukraine’s budget will be spent on arms? Germany and France made it clear that they oppose further U.S. military adventurism in Ukraine, and also oppose NATO membership. But will Germany follow through on its threat to impose sanctions on Kiev in order to stop a renewal of the fighting? For the United States bringing Ukraine into NATO would be the coup de grace blocking creation of a Eurasian powerhouse integrating the Russian, German and other continental European economies.

Full article: http://www.alternet.org/world/if-you-think-ukraines-border-war-russia-bad-check-out-its-fight-international-lenders?akid=12803.44541.0Kc8E7&rd=1&src=newsletter1032048&t=21

[leveymg]

1. Was under the impression the 4th IMF tranch is contingent upon no secession of eastern regions

of Luhansk and Donetsk, Ukraine’s industrial heartland, which combined represent over 15% of the nation’s GDP. This would seem to necessitate a settlement in the coming weeks. Is this even possible?

[polly7]

2. I didn't know that, but it makes sense that it would be a condition with all of the resources there.

I don't think it's possible unless the people in eastern Ukraine are given full control of their land and resources via local gov'ts, and even then, why would they submit to the horrors of austerity? It's been reported they wouldn't have voted for it if the overthrow of the gov't hadn't prevented the vote, I don't see them accepting it now - after all the destruction ...... how on earth could they manage? I'm thinking of Greece, and Spain - whom for both, austerity has been devastating. I just don't know. Such a mess.

[Blue_Tires]

3. Of course this has nothing to do with the deposed president looting the treasury...