Who will Save Ukraine from Bankruptcy? / News / News agency Inforos
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Who will Save Ukraine from Bankruptcy?

On January 17, the elections were held in Ukraine, which seem to go to the second round with the participation therein of the two candidates with the highest number of votes - Viktor Yanukovych and Yulia Tymoshenko. But amid the talk about political processes and changes in the leadership of the country, the talk about the deep economic crisis, into which Ukraine was plunged, has subsided.

Meanwhile, regardless of who will come to power, just economic issues will play, if not a primary, then a very significant role in how events will develop in Ukraine after the elections.

The global financial crisis and crude economic policy (if the actions of Ukrainian authorities can be called economic policy) have put the country in a very difficult situation. Over the past few years, external debt of Ukraine has increased several times and at the beginning of the crisis exceeded 100 percent of GDP, says Christopher Granville, Managing Director of Trusted Sources, an emerging markets research company. The $17 billion IMF loan package that was supposed to solve the economic problems in the country, as it turned out, managed only to delay the financial crisis looming in Ukraine. Despite the fact that the IMF has yet to grant Ukraine the last tranche of $3.8 billion after the presidential election, this money will not be enough for a long time for Ukraine.

The most important thing is that Ukraine in 2010 will have to begin to pay its external debt of $37 billion. Given that the last few years, the economy has been maintained only through credit, and furthermore there was no progressive development, and the standard of living of the population only fell, after the receipt of the last tranche of the IMF loan package (which, by the way, is to be repaid too), the situation becomes catastrophic. And this raises an objective question to the Ukrainian leadership - how could it address the issues of the “Holodomor”, Soviet leaders trials and the rehabilitation of veterans of the OUN and UPA nationalist organizations, instead of solving the economic problems that directly affect the lives of people?

Already it is clear that the newly elected president and government will have to abandon their campaign promises, and drastically reduce government spending (the budgeted deficit of the country in 2009 amounted to about 12 percent, and was made good mostly through switching on the printing press). It is reckless to count on further loans, which only more strongly force the country into debt bondage, without changing anything fundamentally in the country. And in a political crisis that emerged in Ukraine it will be almost impossible to solve its economic problems without assistance.

It is more than naive to hope that Europe or the United States will “save” Ukraine. The European countries now should get outside their own economic problems.

The only way to try to solve its financial problems and gradually emerge from the crisis may be a political rapprochement and reconciliation with Russia. But a great part of the Ukrainian politicians inseparably connect the rapprochement with Russia with the loss of Ukraine's sovereignty, and it will be very difficult to establish mutually beneficial and very necessary in the circumstances, cooperation with Russia until the Ukrainian authorities change their views.
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