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Ukraine: Economy Declines, Merkel Sues For Peace
Recent statistics show that the already decaying Ukrainian economy is further turning towards depression. New money from IMF loans, if granted, will solely go into military costs. The European Union will not bail out Ukraine and Germany, hurt by Russian counter-sanctions, is suing for peace with Russia.
Nulandistan's wheels are falling off and no one one will help to repair it.
According to the Ukrainian government statistics production in July 2014 decrease compared to July 2013 (both ex-Crimea). Mining of coal and lignite was only 71% of its former numbers. Manufacture of coke and refined petroleum products was 84% of its 2013 value. Manufacture of chemicals and chemical products 77% and natural gas production and distribution was 78% of its 2013 number. As the government's fight against the people in Ukraine's industrial heartland continues these numbers will continue to go down.
Ukraine's standard of living did not, unlike in Russia, significantly increase over the last 20 years. Since the beginning of the year inflation increased to 19% and the Ukrainian central bank had to raise interest rates from 6.5% at the beginning of 2014 to 17.5% now. This to support the value of the Ukrainian currency as the hryvnya has fallen 40% since early 2014. The banking system is coming apart:
The ratio of banks’ non-performing loans will reach 30 percent this year as credit costs rise, Moody’s Investors Service predicted in a May report.
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Ukraine’s lenders are already in a precarious position, according to the IMF, which estimates that the nation’s biggest 22 banks would require fresh capital of as much as 5 percent of gross domestic product if the hryvnia averages 12.5 per dollar this year.
The Ukraine is now requesting a third and fourth tranche of an IMF loan but the $2.2 billion it expects to receive is about as much as it plans to additionally spend for military operations. Under the conditions of the new IMF loans Ukraine's standard of living will decrease further and poverty will rise.
Some delusional minds in Kiev may hope that the EU will hand them some money. That is not going to happen. EU economies ex Germany are in serious trouble and Germany is not eager to help either:
There is precious little enthusiasm among the German public for bailout of other Eurozone members. The idea that Germany will consent to spending tens of billions of dollars rebuilding Eastern Ukraine is completely and totally divorced from political reality. Can anyone seriously imagine Angela Merkel, whose country recently had its 2014 growth estimate downgraded to a mere 1.5%, going in front of the German public to demand a substantial outlay for Ukrainian infrastructure? It would be political suicide, and Merkel is clearly a clever enough politician to understand this.
The German government had to cut is GDP forecast because of the insecurity the sanction back and forth with Russia introduced into businesses. The issue will clearly hurt her in the polls. That is likely why she is sending peace signals to Russia:
[Merkel] mentioned Ukrainian “decentralisation”, a deal on gas prices, and Ukraine’s “trade relations” with Russia as elements that could bring about an accord [between Ukraine and Russia].
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"I want to find a way, as many others do, which does not damage Russia. We [Germany] want to have good trade relations with Russia as well. We want reasonable relations with Russia. We are depending on one another and there are so many other conflicts in the world where we should work together, so I hope we can make progress”.
This also from an interview Merkel gave to public German TV yesterday:
A solution must be found to the Ukraine crisis that does not hurt Russia and which the Ukrainian people must choose for themselves, German Chancellor Angela Merkel said on Sunday.
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"There must be dialogue. There can only be a political solution. There won't be a military solution to this conflict," she said.
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On Saturday, her vice chancellor Sigmar Gabriel had suggested that establishing a federal Ukraine was the only viable solution to the crisis pitting Kiev against pro-Russian separatists.
Merkel said that if Ukraine opted to rejoin the Eurasian Union with Belarus, Kazakhstan and Russia, then Europe would not make "a huge conflict" out of it.
Especially the last point is clearly a big step back from the earlier all out "Ukraine is EU" position.
Additionally to the economic side, pressure on Merkel also grows because there is more and more doubt, even in German mainstream media, about the veracity of the Ukrainian propaganda and about the destruction of flight MH17. Why is there is no news about it? Is there a coverup (in German)?
The wheels are coming off in Victoria "Fuck the EU" Nuland's new Ukraine. Her project of capturing Ukraine from Russia while letting the EU pay for it is not going as planned. The likely result of Nuland's coup in Kiev will be a destroyed Ukrainian economy and no winner at all.
@somebody:
Thank you. That was very helpful.
I certainly smiled at your opening line — which was my suspicion. There is so much information out on the web — most of it bad.
The August survey does not appear very heartening if one is hoping for an easy solution.
“- 62 percent think the EU should act more decisively” — to do what exactly, initiate WWIII?
The question also arises whether Germans act rationally in their self-interests, as opposed to USA’ans, where most of the middle and lower classes work against their self-interest, in favor of being swayed by emotionally hijacking”wedge” issues. Furthermore, having last spent time in Germany before unification, it is clear to me how much larger their internal vision of their rightful “sphere of influence” has grown. I hope that observation doesn’t make me any enemies, but that is my opinion.
As far as Novrussia is concerned, first let me say that I feel really bad for the Ukraine and Ukrainians. The 23rd birthday celebration had all the joy of a death watch for a young adult with terminal cancer. The Ukraine is a beautiful country in its own way: those vast fields of yellow sunflowers ripening in the late-summer orange sunsets are breathakingly haunting. (And I also really like their flag from a design point of view.) And one can see in videos of the simple Donbass country people, being shelled and killed for the crime of being too poor to flee, a deep humility and humanity. The video of the Donbass victims is heartbreaking; I could not watch it without crying throughout much of it. Despite years of hate propaganda, the fascists represent a small part of the population. For the most part, the so-called silent majority, they are victims, quiet suffering victims, and have been for decades now. For they didn’t get their “Putin” to forge a grand bargain between the working classes and the various elite factions. And because of that, they got fucked by their oligarchs — mafia dons would be a charitable description — who represent bare-fanged capitalism in all its psychopathic and priapic glory. And the task in the Ukraine of achieving some sort of true independence would have been infinitely harder than in Russia, due to its smaller size and more centrally contested location. That’s why it’s name means “borderlands,” after all. In many ways, Central Europe, particularly the Ukraine, is to Russia and Germany what Haiti was to France, Cuba to Spain, Brazil to Portugal, and Jamaica/Barbados was to England: An immense source of wealth and power. People who say the country is a wreck, and that no one should want it, do not understand colonialism. It is an impoverished wreck, not because there are no resources — it is simply overflowing with vast mineral, agricultural, and human resources — but precisely for the opposite reason: because, like the other great colonies I reference above, the wealth and lucre has been systematically looted and drained into the coffers of their hegemonic neighbors for years on end. Ukraine is suffering from colonialism as much as it is from neo-liberalism. What does anyone think this destruction/IMF loan cycle is about, if not the latest instance of disaster looting?
That being said, Noirette’s list of competing/interacting narratives at play, on the last thread, was really quite insightful. I came up with two or three more while thinking about it. It’s a mess. So, the US, in the role of sorcerer’s apprentice, has really opened Pandora’s box, while the two guard dogs stand watch and slaver over the spoils. (There, did I mix enough metaphors in one sentence for you?) Put another way, while you might have to break a few eggs to make an omelette, in this case, unless one is very skillful, one will simply end up with a case of broken eggs at one’s feet and an empty smoking pan on the burner, while 40 million starving people wait for dinner. Solomon himself would have a tough time sorting through and attempting to balance the competing agendas in search of any semblance of relative justice. Worse than either a two-way, or a three-way fight. you have a malformed 2 1/2 way fight on your hands here. Its a bloody botched abortion.
Initially, before blood had been spilled, I was in favor of federalization in trade relations and enforced neutrality. Now I lean more towards a complete partition — perhaps the standard map of Novorussia and rump Ukraine — although if Russia chooses to go all the way, and overthrow the Junta, and preserve the country, albeit under their sphere of influence, and integrated into their trade block — well, that might be a little rocky initially, but in the long term it might lead to a better local and more stable geopolitical outcome. Although the Lembergers might suffer from terminal jock itch.
Sadly, I have no better solution than that.
Humpty Dumpty sat on a wall,
Humpty Dumpty had a great fall;
All the king’s horses and all the king’s men
Couldn’t put Humpty together again.
Until the King himself takes the fall, I fear we will see an increasing number of Humpty Dumptys around the world.
Posted by: Malooga | Aug 26 2014 8:43 utc | 86
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