Thursday 21st of August 2014




The International Monetary Fund's board this week signed off on a $17 billion bailout for Ukraine, whose economy has been weakened by months of upheaval and a stand-off with Russia.

Ukraine's previous two IMF programs were suspended after the government did not stick to earlier promises, such as raising natural gas prices. This time, the IMF required Kiev to implement 12 reforms before receiving any money.

The following highlights some of the IMF's new requirements:

Energy Sector

-Stick by promises to raise gas tariffs for consumers by 56 percent, effective as of Thursday, and raise heating tariffs by 40 percent on average from July 1. Both tariffs will go up 40 percent in 2015 and 20 percent in 2016 and in 2017.

- Aim to contain the deficit of Naftogaz, the state-run oil and gas company, to 3.3 percent of GDP this year, 1.9 percent of GDP in 2015, and eliminate the deficit completely by 2018. Naftogaz now sells gas below cost to Ukrainian consumers, running a constant deficit.

- Provide government support for utility payments for the 27 percent of Ukrainian families that cannot afford higher energy prices, with the scheme to start on July 1.

Central Bank

-Maintain a floating exchange rate for the national currency, and start removing all existing foreign exchange restrictions by the end of July.

-Adopt inflation targeting by the central bank within 12 months of the IMF program's approval, or by May 2015.

Financial System

- Complete studies and review business plans for the 15 largest banks by July 31 to assess capital adequacy. The 20 next largest banks must complete the studies by the end of September. The bank system faces severe liquidity shortages, losing about 12.5 percent of deposits from February to the end of March.

- Ensure the 35 largest banks can comply with the Tier 1 capital target of 7 percent by the end of February 2015.

- Establish criteria by May 31 for the government to bailout insolvent banks or restructure them if private shareholders are unable to help.

Fiscal Deficit

- Reduce the budget deficit by about 2 percent of gross domestic product each year from 2014 to 2016, mainly by cutting spending.

- Scrap wage and pension increases for the public sector scheduled for July and October, and keep a hiring freeze for government workers.

Structural Reforms

- Complete a study of the government's laws and anti-corruption framework by the next IMF review in order to trace the laws' impact on the judicial system, tax collection and the business climate, and design further reforms accordingly.

- Simplify the regulatory environment and reduce compliance costs for businesses. The IMF blames weak governance and resistance from vested interests for the failure of Ukraine's previous two IMF aid programs.

For the full IMF report, click here.


All this should make the Ukrainians happy...


Pro-Russia supporters voiced their anger


Pro-Russia supporters in the Ukrainian city of Odessa have voiced their anger a day after 42 people were killed.

Friday's clashes culminated in a major fire at a trade union building where most of the deaths occurred. Hundreds of people gathered there on Saturday.

The protest comes as Ukraine says it has seized a security building from rebels in the east of the country.

Seven international monitors held by pro-Russian activists in eastern Ukraine were released earlier.

US Secretary of State John Kerry and his Russian counterpart, Sergei Lavrov, have again spoken by phone about the crisis.

Mr Lavrov urged Mr Kerry to put pressure on Kiev to stop its military operation, which he said risked "plunging the country into a fratricidal conflict".

Mr Kerry said Moscow should stop backing the pro-Russian separatists.



Why is there so many caveats by the IMF on "lending" money to Ukraine? (Imagine the son of Rattus raising your power bill by 50 per cent overnight!}

First Ukraine owes a lot of money to Moscow

Second the money cannot be given to Moscow directly

Third all the money "lent" has to be repaid to the IMF after a while ... and after all the money to Moscow has been repaid.

Of course this is a recipe for disaster for all the Ukrainians... The new Kiev government is labelled as thugs, mafia etc by Moscow and Moscow is correct. Kiev government is on the path of capitalistic suicide...


blaming putin for indulging into what capitalists do...

“Imagine where you’d be today if you were able to tell Russia: Keep your gas,” Vice President Joseph R. Biden Jr. told Ukrainian legislators during a visit to Kiev last month. “It would be a very different world you’d be facing today.”

Nearly all the gas Washington and Brussels would like to get moving into Ukraine from Europe originally came from Russia, which pumps gas westward across Ukraine, into Slovakia and then on to customers in Germany and elsewhere. Once the gas is sold, however, Gazprom ceases to be its owner and loses its power to set the terms of its sale.

All Ukraine really wants, said Mr. Kobolev, the chairman of Naftogaz, Gazprom’s biggest customer after Germany, is a “fair and transparent price” and a stable, uninterrupted supply.

Russia is currently demanding $485 per thousand cubic meters for the gas Ukraine buys directly — instead of the price of $268 it offered the Ukrainian government under President Viktor F. Yanukovych before his ouster — while “Russian” gas sold via Europe, which should be more expensive because of additional transit fees, costs at least $100 per unit less.

Russia denies using gas as a political weapon and says all Ukraine needs to do to secure a stable supply at a reasonable price is pay its bills on time and clear its debts, which Gazprom said total $3.5 billion.

Ukraine has already started taking reverse-flow deliveries from Poland and Hungary. But the quantities, around 2 billion cubic meters last year, have been too small to make much of a difference. Only Slovakia has the pipeline capacity to change the balance of forces.

“We have been struggling for a long time to convince them to find a solution,” said Mr. Kobolev, the Ukrainian gas chief. “We have now identified the problem, which was obvious from the beginning — restrictions placed by Gazprom.” Ukraine’s energy minister, Yuri Prodan, dismissed Gazprom’s legal and technical arguments as a red herring. “I think the problem is political. We don’t see any real objective obstacles to what we have been proposing,” he said.

Opposition politicians in Slovakia, noting that 51 percent of Eustream belongs to the Slovak state, attribute the pipeline company’s stand to the country’s prime minister, Robert Fico, a center-left leader who has sometimes seemed more in sync with Moscow’s views than those of the European Union.

“Fico thinks that it is necessary to be very nice and polite to Mr. Putin,” Mikulas Dzurinda, a former prime minister of Slovakia, said in a telephone interview. “This is the heritage of old communists in a new era: The big guys are still in Moscow,” he said.

Read more:


They blame Putin for indulging into what capitalists do... Sell stuff at whatever price one can get away with. And when one has a big slice of the market due to high demand and short supply, one is in the box seat... Look at the way Coles and Woolworths have been stuffing up their suppliers... In the case of Ukraine, it is the supplier that is being able to squeeze the rabbit. 

Meanwhile the new ruling thugs in Ukraine don't have much room to move, except start a massive conflict or make a deal.

the US has tried to overthrow more than 50 governments...

From John Pilger

Why do we tolerate the threat of another world war in our name? Why do we allow lies that justify this risk? The scale of our indoctrination,wrote Harold Pinter, is a "brilliant, even witty, highly successful act of hypnosis", as if the truth "never happened even while it was happening".

Every year the American historian William Blum publishes his "updated summary of the record of US foreign policy" which shows that, since 1945, the US has tried to overthrow more than 50 governments, many of them democratically elected; grossly interfered in elections in 30 countries; bombed the civilian populations of 30 countries; used chemical and biological weapons; and attempted to assassinate foreign leaders.

In many cases Britain has been a collaborator. The degree of human suffering, let alone criminality, is little acknowledged in the west, despite the presence of the world's most advanced communications and nominally most free journalism. That the most numerous victims of terrorism – "our" terrorism – are Muslims, is unsayable. That extreme jihadism, which led to 9/11, was nurtured as a weapon of Anglo-American policy (Operation Cyclone in Afghanistan) is suppressed. In April the US state department noted that, following Nato's campaign in 2011, "Libya has become a terrorist safe haven".

The name of "our" enemy has changed over the years, from communism to Islamism, but generally it is any society independent of western power and occupying strategically useful or resource-rich territory, or merely offering an alternative to US domination. The leaders of these obstructive nations are usually violently shoved aside, such as the democrats Muhammad Mossedeq in Iran, Arbenz in Guatemala andSalvador Allende in Chile, or they are murdered like Patrice Lumumba in the Democratic Republic of Congo. All are subjected to a western media campaign of vilification – think Fidel Castro, Hugo Chávez, now Vladimir Putin.

Washington's role in Ukraine is different only in its implications for the rest of us. For the first time since the Reagan years, the US is threatening to take the world to war. With eastern Europe and the Balkans now military outposts of Nato, the last "buffer state" bordering Russia – Ukraine – is being torn apart by fascist forces unleashed by the US and the EU. We in the west are now backing neo-Nazis in a country where Ukrainian Nazis backed Hitler.

Having masterminded the coup in February against the democratically elected government in Kiev, Washington's planned seizure of Russia's historic, legitimate warm-water naval base in Crimea failed. The Russians defended themselves, as they have done against every threat and invasion from the west for almost a century.

read more:

business is business...


MOSCOW — The French are sending Russia advanced helicopter carriers. Germans built it a high-tech military training facility. Italians have been shipping armored vehicles.

Deep into a crisis in which Russia’s military deployed on Ukrainian soil, European nations are struggling to balance economic considerations with political ones. Now France is poised this month to invite 400 Russian sailors to train on a massive new ship that a Russian admiral once said would have enabled his nation to beat neighboring Georgia in its 2008 war in “40 minutes instead of 26 hours.”

French leaders have refused to cancel the $1.7 billion sale of two Mistral-class helicopter carriers — capable of transporting 16 attack helicopters, dozens of tanks and 700 soldiers — despite Russia’s recent aggression, including its annexation of the Crimean Peninsula in March. The plans have drawn condemnation from allies including the United States and NATO, which say that supplying military equipment to Russia with one hand while condemning its military actions with the other is clearly contradictory.


I believe the Russians are checking the weapons with superfine detectors to pick up all sorts of transmitters, obsolescence defects and possible hidden spying bugs...  beware...