Pentagon, Kremlin trade accusations on Ukraine

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13. John Helmer: Ukraine Readies Itself for War When No One Wants to Pay for It

What if the Ukrainian government resumes the war noone wants to pay for – not the US, the European Union, Poland, Canada, least of all Kiev?

Public statements by Ukrainian and international officials identify two payment deadlines for war, and for peace. The first falls on May 31, Natalie Jaresko, the US minister of Ukrainian Finance, has told the London Times, when $15.3 billion in sovereign bond debt must be written off “through lower interest rates, longer payment terms, and in some cases, a cut in the sum owed.” The second deadline falls a month later, at the end of June, when the International Monetary Fund (IMF) must decide whether the government in Kiev has met the conditions required for payment of $1.5 billion, the second instalment of the Extended Fund Facility (EFF) which commenced just six weeks ago. A default on May 31 will make inevitable a delay in IMF loan disbursement in June. The combination will halt the European Union promise to start a new €1.8 billion in Macro Financial Assistance (MFA).

Russian sources believe that unless Kiev starts a new military offensive in the Donbass within days, when cross-border Russian action can be blamed, creditor governments pressured into paying and bondholders into conceding losses, there won’t be enough cash later on to pay for troops, machines and ammunition.

“We have done everything possible to get to peace”, Jaresko told the Times on March 29. “Russia seems to have a much grander plan here. They are trying to ensure we are a failed state.”

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