IMF Bails Out Ukraine’s Nazis
The International Monetary Fund (IMF) announced yesterday that it had approved a four-year, $17.5 billion bailout package for Ukraine, the first $5 billion tranche of which will be made available immediately. The $17.5 billion is supposedly part of a larger $40 billion loan and aid program, designed, as the Wall Street Journal put it, to “keep the country afloat.”
Not to keep the population alive—it will be subjected to murderous austerity conditionalities—but to allow Ukraine to continue its war against Russia. Notably, $1.5 billion of the $5 billion for Ukraine will be extorted in debt payments “due” Friday and Monday from Greece, which refuses to join the assault on Russia.
The program’s anti-Russia bent is clear. As Ukrainian President Poroshenko tweeted ecstatically “today’s IMF decision proves the civilized world believes in and supports Ukraine,” the Journal reported, adding its own comment that many economists and analysts see the bailout as part of a “broader political decision to back the fledgling pro-Western government in Kiev. The U.S. and Europe are trying to help the former Soviet republic leave its decades-long political and economic orbit around the Kremlin.” David Lipton, the IMF’s No. 2 official, underscored that Ukraine’s crisis “proves an opportunity for the government to make a decisive break from the past.”
The idea that this program will “stabilize” Ukraine is fantasy. Conditionalities including much higher energy tariffs, privatizations, dismantling of any social safety net (already underway) will push existing political tensions to the breaking point. Virtually every commentator points to the “enormous risks” inherent in the program.
Built into the bailout program is the demand that Ukraine also come up with $15.4 billion in “savings” through negotiations with creditors, debt restructuring, or an outright debt moratorium. Reuters claims today that “some players” think a creditor “haircut” of 70% is possible. On Friday, Finance Minister and U.S. citizen Natalie Jaresko will hold a videoconference with creditors to outline plans for negotiations with holders of sovereign debt.
According to the terms of the agreement, release of the next tranche of the funding package, due in three months, is contingent on ramming through a “successful” debt restructuring with high creditor participation, David Lipton warned. Contrast this to the Troika fascists’ approach to Greece’s proposal for debt restructuring and write-down.