Red-Faced Germans Forced to Ask Russia a Favor
Want Russia to make sacrifices to help bail out Ukraine
This article originally appeared at German Economic News. It was translated by Google Translate
Ukraine is apparently close to financial collapse: According to a report by FT the Finance Minister Wolfgang Schaeuble is said to have called his Russian counterpart Anton Siluanow: Schäuble is said to have asked the Russians to not demand repayment of a loan, that Kremlin had granted Ukraine last year, but to reschedule. The credit is 3 billion and could possibly trigger insolvency. The Russians have hedged their loans in elaborate legal contracts.
The IMF has identified a $15 billion deep hole in the Ukrainian government finances. This must be "filled within weeks to prevent the financial collapse," citing the FT the IMF. 15 billion dollars are needed in addition to those $17 billion, which the IMF Ukraine granted in April as credit.
The IMF is concerned about the situation because of the willingness of the IMF states is small, to provide Ukraine new money. Finally, there have been no reforms, corruption flourishes unchanged and Western financial institutions are not impressed by an American as the Ukrainian Finance Minister says the EU Observer .
"Objectively, we can not fund our army, we can not maintain our social standards when the economy is not running." This - quite true - but analysis can unfortunately only be followed by action, "after we have stopped the Russian military aggression," Yatsenyuk said.
After that, the tax should radically reduced scale privatization carried out and the state sector are reduced dramatically. The announcements are very reminiscent of Greece at the beginning of the euro crisis.There was a credit tsunami, but also 240 billion euros later Greece is in relation to the objectives demanded by the IMF still at the stage of announcements.
The EU is certainly determined to carry on loose again for the good things from their perspective Ukraine billions of taxpayers' money. On Monday, the EU ambassadors have created a text, which states that the EU was ready "to facilitate the process of reform in Ukraine further and support".
But even the big-spending EU officials have apparently get given the huge sums required for the Ukraine, cold feet. The EU Observer quoted officials say that the estimates were the IMF to $ 15 billion in emergency funds probably true. This amount is the total amount that has provided for all 6 new members from Eastern Europe for the next seven years in their budget the EU.
The IMF based its forecast with the collapse of vital importance to the entire Ukraine Industrial sector in the war zone in the east. There, 16 percent of the total Ukrainian economic performance were provided before the outbreak of the war.
Fearing further holes in the Ukrainian budget investor issues of the country have thrown on Wednesday in a high arc from their repositories. . The prices of bonds with maturities from 2017 to 2023 broke times a between 4.5 and seven percent, "The market obviously expects a debt restructuring or rescheduling - whatever you call the whole thing," said Luis Costa, chief bond and -Devisenstratege for Central and Eastern Europe at Citigroup, told Reuters.
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