No doubt Russia may cut off billions of its aid package and up the price of
gas. It remains to be seen if areas such as the Crimea even accept a new
government. Resentment could turn against the west and increase the influence
of right wing nationalists.
On Tuesday, February 25, 2014 6:34:40 AM, Louis Proyect <[email protected]> wrote:
Gerry Rice, a spokesman for the International Monetary Fund, which would
have to provide the billions of dollars in urgently needed credit,
issued a statement on Monday saying only, “We are talking to all
interested parties.”
The Obama administration said it was prepared to provide financial
assistance beyond that from the I.M.F., but it did not say how much.
“This support can complement an I.M.F. program by helping to make
reforms easier and by putting Ukraine in a position to invest more in
health and education to help develop Ukraine’s human capital and
strengthen its social safety net,” the White House spokesman, Jay
Carney, told reporters in Washington.
The I.M.F. has made clear it is unwilling to help Ukraine without a
commitment from the country to undertake painful austerity measures and
other restructuring. Mr. Yanukovych’s resistance to those demands was a
principal reason he backed away from a trade deal with Europe and sought
help from Russia instead.
Given the animosity of the new Ukrainian government toward Russia, Ivan
Tchakarov, an analyst with Citibank, said that Ukraine could turn only
to the West for help, and would inevitably face demands for tough
reforms and a near-certain recession as a result.
“Assuming that Russia will pass, it will be up to the I.M.F. and E.U. to
pick up the tab,” Mr. Tchakarov said. “The I.M.F. will impose hard
constraints on the economy, and these will most probably mean a
recession in 2014.”
Still, Mr. Tchakarov noted that there would be long-term benefits to
Ukraine’s undertaking desperately needed measures, like ending subsidies
of gas prices and cutting the thickets of business regulations that
weigh down the economy. These actions could potentially allow it to
emerge far stronger, like its neighbors Poland and the Baltic countries,
he said.
--NY Times, "Amid Political Upheaval, Ukraine Faces Dire Need for
Economic Help", Feb. 25 2014
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