Yanukovich actually saw it all coming.

[another_liberal]

Now that Moodys has just reclassified the new Ukraine as a nation on the brink of default, faced with declining foreign currency reserves, the withdrawal of Russian financial support, a spike in gas import prices, a significant contraction of GDP, an expected sharp currency depreciation and a debt to GDP ratio of 60 percent by year’s end, President Yanukovich's rejection of the EU's economic deal in November seems pretty damn smart after all:

No winners if sealing trade agreement tanked Ukraine economy.

Neither the EU, nor Ukraine and Russia would have gained if Kiev had rushed to sign the trade association agreement back in November, Ukraine’s ousted President Viktor Yanukovich has said. “With the terms the EU association agreement offered, it wasn’t advantageous for any party – neither for Europe, nor for Ukraine and Russia,” Viktor Yanukovich said on Wednesday in an interview with the Associated Press in Rostov-on-Don. “My stance was quite public and transparent. Even today I believe that, regardless of who had been president at the time, no other decision could have been taken. Any other resolution would have been anti-national and contradictory to Ukraine’s national interests,” Yanukovich added.

In November 2013, Ukraine chose to shelve the trade association agreement with the EU, instead choosing to activate a dialogue with Russia and CIS countries. But Yanukovich stressed that Kiev hadn’t completely rejected the deal. “We asked for a pause, to reflect, to find solutions to the contradictions that were quite obvious at the time. I believe that sooner or later Europe will resolve the issues concerning trade in an EU-Ukraine-Russia triangle. It’s inevitable because all politics is based on economy.”

(snip)

Military machinery, an industry that employs over 500,000 people in Ukraine, bears no relation to EU countries, because it’s produced in complete cooperation with Russia and other CIS countries, Yanukovich said. On top of that, Ukraine consumes a very small portion of it, only about 10 percent, with the biggest share being exported to Russia and other CIS countries. The same is true for transportation and power machinery, where discrepancies in technical standards are another big issue. “Due to technical standards, Europe has never bought and won’t buy [Ukrainian] power machinery. The standards are very different. Let’s start from the [railway] gauge which is narrow in Europe and broader in Russia and the CIS.”

Ukraine agriculture would also be hit dramatically if it opened its market for European producers. “The subsidies in Europe for agriculture reach 30 percent. In Ukraine it’s 3 percent. So Ukraine’s agricultural produce wouldn’t be able to compete with the European,” Yanukovich said.

(snip)

Read more at: http://rt.com/business/eu-ukraine-agreement-yanukovich-881/

[dipsydoodle]

1. I think the debt:GDP ratio will cross 60% earlier than year end.

Loans / bond purchases from the EU and IMF meanwhile will ensure that.

The significance of 60% figure is that as soon as it is reached Russia's $3 billion loan in the form of bond purchases from December become immediately repayable....................... using funds supplied by the EU and IMF.

Sometimes you just can't make this shit up.

[malaise]

5. All I know is that after 35+ years of structural adjustment a la IMF, World Bank

aka the Washington Consensus model we're facing 70-30.


http://ucatlas.ucsc.edu/sap/history.php
<snip>
The key debate at Bretton Woods was between the British and US delegations representing, respectively, liberal and conservative visions of global economic institutions. The British delegation, led by Maynard Keynes, imagined that the new IMF should be a cooperative fund which member states could draw upon to maintain economic activity and employment through periodic crises. This view suggested an IMF helping governments to act as the US government had during the New Deal in response to the great recession of the 1930s.

By contrast, the US delegation to Bretton Woods foresaw an IMF more like a bank, making sure that borrowing states could repay their debts on time. This more conservative view was less concerned to avoid recession and unemployment. The US view prevailed, and set the stage for how economic crises have been handled since World War II (Harris 1988).

-----------------------
The plain truth

[dipsydoodle]

6. Yes.

The plain truth.

[another_liberal]

10. I see . . .

The Ukrainian people are in for a rough ride indeed!

[dipsydoodle]

2. "Ukraine’s agricultural produce wouldn’t be able to compete with the European producers"

What will actually happen is that the EU will tell Ukraine how much to sell their produce for which will be take it or leave.

[cthulu2016]

3. Oh noes!!1! A debt to GDP ratio of 60 percent by year’s end.

USA is 73% Japan is 227%. Germany is 78%. UK 89%. France 94%. Canada 84%.

http://www.tradingeconomics.com/country-list/government-debt-to-gdp

[another_liberal]

9. All of the countries you note have huge economies and everyone trusts their ability to repay.

In fact, the rest of the World actually purchases those countries' debts (government bonds) as investments, expecting them to appreciate in value. Ukranine has a tiny economy and isn't able to pay off anything. The only way she can even meet the interest payments IMF bankers will demand is to take on more debt and sink deeper.

[Jesus Malverde]

4. I hard ukraine described as a country of 45 million mostly poor people

When neuland said "Fuck the EU" who knew it meant saddling them with a nation of poor people.

[dipsydoodle]

7. Others saw it coming too. Check this post out in case you missed it.

I've read an old wikileaks cable, where leaders in Ukraine think a deeper crisis is a good idea.

5. (C) Although elections would delay reform for a few more months, Pynzenyk thought a new parliament would be more likely to implement reform. He understood that this could delay the return of the IMF to Ukraine; but, Pynzenyk argued that the country could get through the next six months on its reserves, particularly if no new budget were adopted. The lack of a budget limited the government,s ability to spend, he said. In fact, Pynzenyk argued that pushing the country into a deeper crisis could actually be a benefit because voters and the leaders would feel the need for change more acutely.
http://www.wikileaks.org/plusd/cables/10KYIV278_a.html

http://www.democraticunderground.com/?com=view_post&forum=1014&pid=772502

[malaise]

8. No surprise

I'm just amazed at the naivety on display across our planet.