Weekend Economists Revere Two Kings January 16-19, 2015

[Demeter]

4. Ukraine’s Creditors Grab for the Biggest Pieces of Its Carcass by Eric Zuesse

http://www.washingtonsblog.com/2015/01/ukraines-creditors-grab-biggest-pieces-carcass.html

The lifelong Russia-enemy, George Soros, and the Russian Government itself are now openly fighting over which parts of the Ukrainian Government they’ll be getting in the bankruptcy proceeding that’s already unofficially starting. Here’s the necessary background, so that the battle now occurring on the part of Ukraine’s creditors can be truthfully and honestly understood:

In December 2013 — just before the overthrow of the Russia-friendly Ukrainian Government of Ukrainian President Viktor Yanukovych, by Soros’s American President and major political-campaign investment, Barack Obama — Russia lent Ukraine $3 billion with a contract saying that if Ukraine’s debt would rise above 60% of Ukraine’s GDP, then Russia would be able to demand immediate repayment, and Ukraine agreed to the contract’s condition that Ukraine wouldn’t pay a cent to any other creditor before the entire due-balance on this $3 billion loan is returned to Russia.

Then, on 4 February 2014, Victoria Nuland of Obama’s State Department selected Ukrainian banker Arseniy Yatsenyuk as the person to take control over Ukraine as soon as Obama’s Ukrainian coup would occur, which turned out to be 18 days later, on February 22nd.

Soros’s and Obama’s plan was to privatize as much of the Ukrainian Government as possible in a fire-sale of its assets, such as the valuable gas-fields in the Yuzivska region in Ukraine’s southeast (where the civil war now is), so that Soros and the other investors would be able to get their money back, with interest. Furthermore, inasmuch as only Soros and other insiders would be in on this fire-sale, those same people would also be the bidders; and thus Ukraine’s assets would be sold to them at prices far lower than their actual worth as economic investments for the future. This would turn their prior Ukrainian bonds into super-discounted equity or stock in what now are Ukrainian Government-owned gas-fields, electrical power companies, factories, etc. Furthermore, Western agribusiness giants are now coming into Western Ukraine to buy up Ukrainian farmland, which is among the world’s most-fertile. The basic privatization-scheme that’s being used here had originally been drawn up by the Harvard economist, and the then-World-Bank chief, Lawrence Summers, and by Harvard’s Economics Department, in the 1990s, as being the way for American insider investors and the U.S.S.R.’s Communist Party insiders, to buy the U.S.S.R.’s assets dirt-cheap, and thereby profit from the dissolution of the U.S.S.R. Those economists oversaw the sell-offs of industrial and other assets throughout many of the 15 nations comprising the Soviet Union, one of which is Ukraine, where the fire-sales are now occurring.

With this as the background, the world’s great newspaper, German Economic News, headlines, on January 10th (as translated by the present writer into English), “Putin v. Soros: Russia Grabs for EU-Billions to Ukraine,” and reports that:

“Just a few days after Angela Merkel cleared the way for a 1.8 billion euro loan from the EU’s tax-money for [Ukrainian Premier] Arseny ‘Yaz’ Yatsenyuk, Russia launched its interest in this money: Moscow is considering to mature a loan it had made to Kiev. Russia makes this move especially against the speculator George Soros.

Ukraine’s ‘Yaz’ Yatsenyuk met with Chancellor Merkel, at the Chancellor’s Office, on Thursday [Jan. 8]. No sooner was the Premier assured by the EU of receiving 1.8 billion euros, than Russia intervenes for the money — Moscow may trigger the state bankruptcy of Ukraine.

Russia could use the EU payments to Ukraine to mature a loan that is due at the end of January, and Kiev cannot use its own resources: Moscow could demand early repayment of a three-billion-dollar loan to Ukraine. Ukraine did not meet a number of conditions [of the loan-agreement], reported the Russian news agency RIA Novosti on Saturday [the 10th], citing government sources. Under these circumstances, Russia was forced to insist on the earlier payment.”

Soros has been lobbying very intensively, after the coup (see all about it by clicking on that link), to persuade the EU, IMF and U.S., to donate enough of Western taxpayers’ money, so as to enable Ukraine to buy enough weapons to win its war against the rebelling portion of Ukraine — the region which had voted 90% for the overthrown former President, Viktor Yanukovych — the region in Ukraine that’s often called “Donbass,” which is in Ukraine’s far east, and which has declared its independence, and which includes much of the Yuzivska gas-field. That region has consistently rejected the Obama-coup-imposed Government; and consequently its gas cannot be used to repay Ukraine’s debts unless Ukraine regains control over that land, where now, almost certainly, even more than 90% of the people reject that Government. (Click here in order to see the transcript of the EU officials’ phone-conversation in which their Foreign-Affairs Minister Catherine Ashton was informed by her own investigator, on 25 February 2014, that Yanukovych had been overthrown in a violent coup, rather than himself perpetrated the bloodshed, and that Ukraine’s current President, Petro Poroshenko himself, acknowledged to the EU’s investigator at the time that it was a coup — which Ashton hadn’t known of until that moment.) This is the reason why the IMF informed the coup Government, on 1 May 2014, that unless it could regain control over the rebels’ land, which means eliminate its residents (since they would never accept a Government that is set upon exterminating them), the IMF would stop lending (actually donating, since these ‘loans’ will come at the end of the long line in the bankruptcy proceeding that’s now inevitable) Ukraine more of its Western taxpayers’ money. Without those gas-fields and other assets, even the existing IMF loans to Ukraine wouldn’t likely ever be able to be paid back. New IMF loans surely won’t be.

On 6 January 2015, an aide to Poroshenko announced that, as the news-headline on this story the following day phrased it, “Ukraine Says $450 Million Was Stolen from Its Military in 2014.” This report also noted that, “This amount happens to be precisely the same maximum amount of money that the U.S. Government, in legislation that was supported by more than 98% of U.S. Senators and Representatives and that was signed into law by U.S. President Barack Obama on December 18th, will donate to Ukraine’s military for this year, 2015.” Both Republicans and Democrats in the U.S. Congress overwhelmingly support Obama’s ethnic-cleansing program to get rid of the people in that region of Ukraine and thus endorsed the $450 million donation by U.S. taxpayers. However, if the people we’re hiring to do that job are stealing as much money as we’re donating to them, then people like Soros could end up losing money on their bond-investments. This is the reason why Soros is pressing the European Union to donate lots more of their taxpayers’ money to this war. In the 5 February issue of the New York Review of Books, he says, “all the consequences of helping Ukraine would be positive. By enabling Ukraine to defend itself, Europe would be indirectly also defending itself.” He doesn’t mention that Ukraine’s Government resulted from a coup instead of from the anti-corruption demonstrators in the Maidan, and he portrays Russia’s President Vladimir Putin as being the aggressor for accepting Crimea back into Russia (where it had been during 1783-1954), and not America’s President Barack Obama as being the aggressor for perpetrating the coup and trying to oust Russia’s Black Sea Fleet from Crimea. Soros says:

“Putin’s ambition to recreate a Russian empire has unintentionally helped bring into being a new Ukraine that is opposed to Russia and seeks to become the opposite of the old Ukraine with its endemic corruption and ineffective government. The new Ukraine is led by the cream of civil society: young people, many of whom studied abroad and refused to join either government or business on their return because they found both of them repugnant. Many of them found their place in academic institutions, think tanks, and nongovernmental organizations. A widespread volunteer movement, of unprecedented scope and power unseen in other countries, has helped Ukraine to stand strong against Russian aggression.”

MORE HISTORY AND SUPPORTING LINKS AT OP
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Investigative historian Eric Zuesse is the author, most recently, of They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.