Ukraine to hike domestic gas prices by 50 pct to meet IMF demands

[BelgianMadCow]

(Reuters) - Ukraine's new leaders, in a step the ousted government had balked at, said on Wednesday it would raise the price of gas for domestic consumers by more than 50 per cent from May 1 and would raise prices further under a fixed timetable to 2018.

The move is certain to dent the popularity of Prime Minister Arseny Yatseniuk's interim government, but met the demands of the International Monetary Fund.

IMF officials appeared to be putting the finishing touches on Wednesday to a new aid programme for the ex-Soviet republic, which has experienced months of violent political turmoil.

The Ukrainians are gonna be so happy they finally get some nice IMF "aid"! They'll be begging for shale gas exploration soon! Note that Yats, as we affectionately call him, was saying from the very start he'd push through the necessary reforms even though he knew they would be unpopular. Echoes of Monti in Italy and Papademos in Greece (and Rato in Spain). I know his background was banking, at Goldman Sachs perhaps?

I'd say they need to watch some John Perkins, but it's too late.

[dipsydoodle]

1. "but met the demands of the International Monetary Fund" ?

I sincerely doubt that met the IMF demands.

"the Naftogaz budget deficit this year is expected to run up to Hr 80 billion, or 5.6 percent of the gross domestic product".

http://www.kyivpost.com/content/ukraine/ukrainians-should-expect-gas-price-hikes-subsidies-for-poorest-citizens-340995.html

For that to be so they'd need to selling on average all gas at below cost so its hardly surprising the country has got economic problems. That's a deficit of c. $8 billion just for 2014.

That's $8 billion of whatever loans from the EU and IMF that they receive straight down the tubes and those are loans which will be secured against state assets.

Keep your eye on ebay.ukraine for sale prices.

[BelgianMadCow]

2. Indeed. Surely, this only meets a small part of the IMF demands

we're looking for deregulation, privatisation (GGO-arable land & shale gas come to mind, but that's for starters. I read eastern Ukraine has some nice factories) and attacking any and all social security. We know the play - Shock Doctrine/Greece.

[dipsydoodle]

3. Give it a year or so and they will be jealous of Greece

and they will take it out on whatever government they elect this May . What will be interesting will be to see what government follows that one.

[BelgianMadCow]

4. Very likely. It reminds me of Egypt.

First, genuine revolution. Then, one group "captures" it. Then, they're replaced by the military (and Mubarak holdouts). This isn't the last time we've heard of Egypt, I think.

I checked on Yats in the mean time. No G-S in his past it seems, he was head of the national bank. Equally good, I guess. And there was also this on his wiki:

Arseniy Yatsenuk heads the Open Ukraine Foundation, an international foundation based in Ukraine. It was established in July of 2007 for the "strengthening and development of Ukraine's reputation in the world."[98] Open Ukraine works with the young generation of artists, scholars and community leaders who seek to implement social changes in the different regions.

Open Ukraine is partnered with the North Atlantic Treaty Organization (NATO), the United States Department of State and Chatham House, among other organizations

What I'd like to see is how much of the US's 5 billion flowed to Open Ukraine via the National Endowment of Democracy and the like.

[dipsydoodle]

5. genuine revolution ?

Remains to be seen how representative of the total population the protesters were. Only fair elections will confirm that one way or the other.

What won't be desirable there for their elections will be US observers to help avoid a repeat Azerbaijan's, tragic farce , elections. Its not who votes who counts - its who counts the votes.

[BelgianMadCow]

6. I should clarify

from what I've seen, it started as a grassroots movement. That's what I meant with genuine. A movement of people that wanted to orient towards the EU, which is what Yanukovich had campaigned on. And no, not even that movement at the very beginning could claim to represent the will off the majority in Ukraine.

Obama was speaking about defending freedom and democracy in Ukraine in my country today. Apparently, the large minority that prefers orientation to Russia is to be ignored & thrown under the bus.

To make matters worse, Russia wanted to have trilateral talks and the EU shot that down, thereby precipitating recent events.

I think you & me have a similar view of the EU - I want a united Europe, but not THIS neoliberal US puppy Europe. What's your opinion? We almost have to vote.

[dipsydoodle]

8. Not ignoring you.

Thinking of an answer.

[malaise]

7. And so it begins

We did warn them

[woo me with science]

9. K&R