Debt restructuring row flares between Kyiv and creditors as IMF deadline looms

International Monetary Fund Logo Over Ukraine Flag

(Business New Europe – bne.eu – bne IntelliNews – May 14, 2015) Ukraine’s finance ministry and holders of its sovereign Eurobonds have taken their dispute over debt restructuring public, as a mid-June deadline set by the International Monetary Fund (IMF) requiring final agreement on terms draws close. The ministry criticised the level of secrecy over the identities of the mainly […]

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NEWSLINK Politico.eu/Mikhail Saakashvili: Poroshenko’s Four Ds. The Ukrainian president outlines the roadmap to “a new, democratic, European Ukraine.”

File photo of Barack Obama and Petro Poroshenko facing one another, with Obama gesturing

Post-Maidan Ukraine is at war. Not only against Russian invaders, but more generally against sovietism. This war has a military front in the East, but as important is the political, economic, social frontline in the rest of the country. Resisting the invaders and reforming the nation are two fronts of a same fight: the struggle for the emergence of a […]

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Billionaire No More: Ukraine President’s Fortune Fades With War

File photo of Barack Obama and Petro Poroshenko facing one another, with Obama gesturing

(Bloomberg – bloomberg.com – Kateryna Choursina, Volodymyr Verbyany and Alex Sazonov -May 7, 2015) At the November 2013 World Economic Forum in Kiev’s Intercontinental Hotel, billionaire Petro Poroshenko predicted a European Union trade pact would kick-start Ukraine’s economy and enrich his Roshen Confectionery Corp. by dramatically increasing EU-bound chocolate exports. Eighteen months later, Poroshenko — now Ukraine’s president — has […]

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Punitive Tax Regime Is Crushing Ukraine’s Oil And Gas Sector

Gas Flame file photo

(Oilprice.com – Robert Bensh – May 6, 2015) Each country blessed with oil and gas discoveries initially tries to create a tax regime that maintains the balance between generating tax revenues from the extraction of these hydrocarbons while also encouraging investment. If the country gets too greedy and imposes an excessive tax burden, the inverse effect occurs – investors abandon […]

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NEWSLINK: World Bank: Reforms are the Best Antidote to Exogenous Shocks Confronting Ukraine, Says World Bank

World Bank Building

Despite decisive measures in 2014 to stabilize the economy and jumpstart growth, Ukraine’s economic woes worsened mainly due to the conflict in the east. In its new Ukraine Macroeconomic Update, the World Bank projects real GDP to fall by 7.5 percent in 2015, down from 6.8 percent in 2014. This lower forecast is mainly driven by the ongoing conflict that […]

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Champagne Tastes On Beer Incomes: Tax Declarations In Ukraine Suggest Enduring Corruption

Maidan Square in Kiev, Ukraine

(RFE/RL – rferl.org – Katya Gorchinskaya – KYIV, April 21, 2015) Yulia Tymoshenko didn’t have much of an income in 2014. The former Ukrainian prime minister spent part of the year in prison, part of it rehabilitating in the hospital, and much of it in back-to-back campaigns for president and parliament. But nevertheless, she managed to buy a luxury car, […]

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Miners break through security cordons near Ukrainian Presidential Administration building

Map of Ukraine, Including Crimea, and Neighbors, Including Russia

KYIV. April 22 (Interfax) – Over a thousand miners who approached the Presidential Administration edifice on Wednesday morning to deliver their demands have broken through security cordons on Bankova Street in downtown Kyiv and came close to the building. The protesters are pounding their helmets against the ground and shouting. They have not expressed their demands but their behavior is […]

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Ukraine plays hard ball with private creditors

International Monetary Fund Logo Over Ukraine Flag

(Business New Europe – bne.eu – bne IntelliNews – April 20, 2015) Ukraine is ready to play hard ball in its bid to restructure $15.3bn in foreign debt, was the signal sent by Finance Minister Natalie Jaresko to corporate bondholders in Washington on April 17. The government wants to secure a $40bn bailout package assembled with the International Monetary Fund […]

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Eastern Ukraine returns to the ruble

Map of Ukraine, Including Crimea, and Neighbors, Including Russia

(Business New Europe – bne.eu – Graham Stack in Kyiv, Mari Bastashevski in Donetsk – April 15, 2015) The Russian ruble is gaining ground against the hryvnia across rebel-held parts of East Ukraine’s Donbas region, 19 years after Kyiv introduced the national currency to end the country’s membership of the ruble zone. As Eastern Ukraine heads towards becoming a frozen […]

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NEWSLINK Time: Why Ukraine Still Can’t Break Ties With Russian ‘Aggressor State’

Map of Commonwealth of Independent States, European Portion

… With most of its scarce resources focused on fighting Russia’s proxies in the east, Ukraine’s leaders have watched their economy fall off a cliff, surviving only by the grace of massive loans from Western institutions like the International Monetary Fund, which approved another $17.5 billion last month to be disbursed over the next four years. But that assistance has […]

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NEWSWATCH Chatham House: Ukraine’s Oligarch Gambit

Maidan Square in Kiev, Ukraine

Writing for Chatham House in the aftermath of Igor Kolomoisky’s dismissal as regional governor, Orysia Lutsevych considers the impact of Ukrainian oligarchs and efforts to address their role. The grip the oligarchs have on Ukraine’s economy could further undermine the country’s integrity. Attacking their vested interests is dangerous but preserving the current state of affairs is even riskier.   According to […]

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Ukraine’s Domestic Problems Could Spark New Protests if War Ends, Kyiv Economist Says

Maidan Square in Kiev, Ukraine

(Paul Goble – Window on Eurasia – Staunton, April 13, 2015) As long as Russian aggression against Ukraine continues, patriotism is likely to trump concerns about domestic difficulties, according to Ella Libanova, a reflection of the fact that “the Maidan and Russian aggression has pushed Ukrainians toward more responsible attitudes toward both their country and their own fate.” In a commentary […]

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S&P downgrades Ukraine to ‘CC’, says default ‘virtually inevitable’

Maidan Square in Kiev, Ukraine

(Business New Europe – bne.eu – bne IntelliNews – April 13, 2015) Ratings agency Standard & Poor’s has downgraded Ukraine’s sovereign credit rating from ‘CCC-‘ to ‘CC’, three levels above default, with a negative outlook. S&P said it views a Ukrainian default as “virtually inevitable”, with Ukraine’s sovereign debt to reach 93% of GDP in 2015. “The negative outlook reflects […]

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NEWSLINK Forbes: Ukraine Debt Rating Now Super-Duper Junk

Map of Ukraine, Including Crimea, and Neighbors, Including Russia

On Friday, Standard & Poor’s cut Ukraine’s long term foreign debt rating to CC from CCC-.  The rating of CC is one notch above C, which is used when a debtor is in the process of filing for bankruptcy protection. Standard & Poor’s kept Ukraine’s short-term foreign credit rating at C with a negative outlook. http://www.forbes.com/sites/kenrapoza/2015/04/10/ukraine-debt-rating-now-super-duper-junk/

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NEWSLINK The National Interest: Europe’s Nightmare: Ukraine’s Massive Meltdown. “Above all, what Ukraine needs today is for the West to lean hard on Kiev in support of economic and political reform.”

Map of Ukraine, Including Crimea, and Neighbors, Including Russia

The Minsk II accord is not a peace deal. It is a cease-fire agreement, and a fragile one at that. Beyond suspending large-scale hostilities, pulling back heavy weapons and exchanging prisoners of war, Minsk can hardly be implemented.   http://nationalinterest.org/feature/europes-nightmare-ukraines-massive-meltdown-12597

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Soviet-Era Survival Instincts Kick in for Ukrainians

Map of Ukraine, Including Crimea, and Neighbors, Including Russia

(Bloomberg – bloomberg.com – Yulia Surkova – April 7, 2015) Deep behind rebel lines in eastern Ukraine, cash machines on garbage-covered streets have long run out of bills and residents are turning to fixers to survive. A pro-Russian insurgency that erupted a year ago has killed more than 6,000 people, with economic desperation permeating what was once Ukraine’s industrial heartland. Residents of […]

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NEWSLINK Reuters: Ukraine challenges oligarchs’ grip on energy companies

Maidan Square in Kiev, Ukraine

Ukraine’s judicial authorities launched actions on Tuesday challenging tenders that gave big businessmen control over key power companies under ousted president Viktor Yanukovich in a new move by the government to curb the influence of the so-called oligarchs.   Reuters: Ukraine challenges oligarchs’ grip on energy companies

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NEWSLINK IMF: The Case for Supporting Ukrainian Economic Reforms

International Monetary Fund Logo Over Ukraine Flag

While the IMF Spring Meetings are just around the corner, we are not here to talk about the global economy. Rather, our focus today is Ukraine. Going into the meetings, many will want to have a clear picture of the situation in that country as they seek to understand the risks facing the world, and Europe in particular.   IMF: […]

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NEWSLINK AFP: Russia steps in as job losses, closures ravage east Ukraine

Map of Ukraine, Including Crimea, and Neighbors, Including Russia

For people in rebel-held territory, the destruction of infrastructure and a cut-off of government support along with the legal limbo created by the separatist takeover have left once-flourishing cities in dire straits.   http://news.yahoo.com/russia-steps-job-losses-closures-ravage-east-ukraine-043432796.html

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IMF ties itself into knots over status of Russia’s loan to Ukraine

International Monetary Fund Logo Over Ukraine Flag

(Business New Europe – bne.eu – Ben Aris in Moscow – March 27, 2015) A confusing argument has broken out over the crucial question of whether Ukraine’s $3bn worth of bonds held by Russia and due in December are “official” debt or not. The answer is important because if the bonds are “official” and Ukraine doesn’t pay them, the International […]

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BNE: Support for Ukrainian government plummets

Maidan Square in Kiev, Ukraine

(Business New Europe – bne.eu – bne IntelliNews – March 26, 2015) Support for Ukraine’s pro-Western government is plummeting, with nearly 70% of Ukrainians believing the country is going in the wrong direction, one year after the change of regime in Kyiv. The plunge in confidence mirrors the economic collapse in the wake of the conflict in East Ukraine and rising tensions with […]

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How to end the Ukraine conflict

Map of Ukraine, Including Crimea, and Neighbors, Including Russia

(Business New Europe – bne.eu – Ben Aris in Moscow – March 19, 2015) March will be a tense month as Russia has decided to poke its finger in Nato’s eye again. Russia’s Armed Forces are holding for the first time Arctic military exercises, which kicked off on March 16 and will last through March 21. The exercises are massive. The […]

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Ukraine Bondholders’ Tough Talk Signals Debt Deal Won’t Be Easy

International Monetary Fund Logo Over Ukraine Flag

(Bloomberg – bloomberg.com – Lyubov Pronina, Krystof Chamonikolas – March 17, 2015) The jockeying has begun in Ukraine’s debt restructuring talks. The government’s notes slid below 42 cents on the dollar on Tuesday as Russia said it wouldn’t budge on being paid back a $3 billion loan in full on time and the Financial Times reported Franklin Templeton won’t accept a […]

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NEWSLINK RAND Corporation: Olena Bogdan, For Ukraine, the Battle to Bolster a Crashing Economy Is as Dire as Combat in the East. With political upheaval and a war in the East, Ukrainians are facing poverty, with prices rising sharply, the currency crumbling, and a nearly bankrupt state

Map of Ukraine, Including Crimea, and Neighbors, Including Russia

Ukraine’s fight to control its destiny is underway not only on its eastern battlefields but also in the halls of its parliament and in those of global financial institutions. The struggle to keep the former Soviet state afloat economically has been daunting, as the nation’s parliament has fallen into disarray and failed to enact major economic reforms. …   http://www.rand.org/blog/2015/03/for-ukraine-the-battle-to-bolster-a-crashing-economy.html

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Moscow Times: Ukraine Must Make Compromises and Radically Reform for IMF Funding to Continue

International Monetary Fund Logo Over Ukraine Flag

(Moscow Times – themoscowtimes.com – March 14, 2015) With the first billions of dollars foreign aid in its pocket, Ukraine’s government can now stay afloat long enough to embark on its radical reform drive, but the hard part is only just beginning. Ukraine received the first $5 billion on Friday of $17.5 billion in aid promised by the International Monetary […]

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NEWSWATCH: Ukraine Finance Minister Seeks More Bailout Financing; Natalie Jaresko says security, political risks could push up debt-restructuring needs

Maidan Square in Kiev, Ukraine

[“Ukraine Finance Minister Seeks More Bailout Financing; Natalie Jaresko says security, political risks could push up debt-restructuring needs” – Wall Street Journal – Ian Talley – March 16, 2015] The Wall Street Journal covers Ukraine’s efforts to gain more financing to spur growth and development. Ukraine needs more bailout financing than currently promised to help jump-start the embattled nation’s economy, Finance Minister […]

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IMF cash to do little to change grim reality for ordinary Ukrainians

International Monetary Fund Logo Over Ukraine Flag

(Business New Europe – bne.eu – Kateryna Killyashenko in Kyiv and Nick Allen in Berlin – March 13, 2015) After the International Monetary Fund’s (IMF) approval on March 11 of its $17.5bn loan package to Ukraine, with $5bn due to flow immediately to bolster Kyiv’s dwindling coffers, the population could be forgiven for thinking the material hardships of recent months […]

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NEWSLINK Wall Street Journal: Bringing Ukraine Back From the Brink; An economically successful Ukraine is vital to the security of Europe and the sustainability of democratic values everywhere

Europe Map

A little more than a year ago, the Ukrainian people chose a path of fundamental change. Citizens took a stand in Kyiv’s Maidan Square for the right to live in a free, independent and prosperous European country and to put an end to endemic corruption and mismanagement. More than 100 people gave their lives during the Revolution of Dignity. Since […]

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IMF Loan Package For Ukraine Promises Pain, Questionable Gain

International Monetary Fund Logo Over Ukraine Flag

(RFE/RL – rferl.org – Mark Baker – March 13, 2015) From higher home heating costs to lower pensions, Ukrainians are about to feel the pinch from austerity measures attached to a newly approved International Monetary Fund (IMF) loan package. The long-awaited $17.5 billion credit announced this week holds out hope of an eventual economic recovery for the country. But that […]

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Ukraine is Russia – or at least the Russia that Western critics imagine

Diverse Paper Currency, Coins, Line Graph

(Business New Europe – bne.eu – Mark Adomanis in Philadelphia) Writing and thinking about Russia can often have a rather surreal quality to it. Something about the place seems to short-circuit peoples’ critical thinking skills. Serious pundits write things (“Russia life expectancy is collapsing!”) that are flatly contradicted by recent academic research and that don’t withstand even the most cursory […]

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Ukraine expects IMF to agree up to $11 billion cash disbursal

Maidan Square in Kiev, Ukraine

(Business New Europe – bne.eu – bne IntelliNews – March 11, 2015) The International Monetary Fund is ready to disburse to Ukraine the first tranche of an agreed extended funding facility (EFF), confirming on its website that the sole subject of discussion at an IMF board meeting on March 11 will be the loan. At the same time, Ukrainian President […]

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Ukraine’s Economy Is Worse Than It Looks

Map of Ukraine, Including Crimea, and Neighbors, Including Russia

(Bloomberg – bloomberg.com – Leonid Bershidsky – March 6, 2015) [Chart here bloombergview.com/articles/2015-03-06/ukraine-s-economy-is-worse-than-it-looks] The world’s worst-performing currency this year, the Ukrainian hryvnia, has bounced back 47 percent since last week’s precipitous plunge. It’s tempting to conclude Ukraine has pulled back from the brink of financial disaster. In reality, the Ukrainian central bank and government are just sweeping their problems under […]

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Ukrainian bank insolvencies cost 9% of GDP in 2014-15

Map of Ukraine, Including Crimea, and Neighbors, Including Russia

(Business New Europe – bne.eu – bne IntelliNews – March 9, 2015) Ukraine’s bankers stole UAH58bn from their banks in 2014-2015, state refunds to depositors of bankrupt banks were equivalent to 10% of total budget revenues, while total losses from bank insolvencies comprised 9% of GDP. These are just some of the disastrous figures Valery Gontareva, head of the National […]

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Interfax: Kostin calls Ukraine a bankrupt nation

Map of Ukraine, Including Crimea, and Neighbors, Including Russia

MOSCOW. March 4 (Interfax) – Ukraine is already in a default, and the country’s financial sector cannot exist without foreign financing, VTB (MOEX: VTBR) CEO Andrei Kostin told reporters on Wednesday. “Ukraine’s financial and banking sector is in an extremely difficult state. Ukraine is actually already a bankrupt nation and in a default, and without foreign aid and external [financing] […]

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Interfax: Kyiv stepping up DPR economic blockade – Pushilin

Map of Ukraine, Including Crimea, and Neighbors, Including Russia

ROSTOV-ON-DON. Feb 26 (Interfax) – The self-proclaimed Donetsk People’s Republic (DPR) has accused Kyiv of increasing the economic blockade on the region in defiance of the latest peace accords. “In defiance of the Minsk agreements, Ukraine is intensifying the economic blockade on the DPR. Humanitarian aid is the only opportunity for people to get food today,” DPR envoy Denis Pushilin […]

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IMF agrees $17.5 billion facility with Ukraine to give total aid package of $40 billion

Maidan Square file photo

(Business New Europe – bne.eu – Kateryna Illyashenko in Kyiv – February 12, 2015) The International Monetary Fund (IMF) has tentatively agreed a $17.5bn extended fund facility with Ukraine, part of an overall $40bn funding package for the country over the next four years, the fund’s managing director, Christine Lagarde, said on February 12. The package will go some way […]

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Business New Europe: Ukraine investment case depends on peace, aid and unity, says Weafer

Maidan Square file photo

(Business New Europe – bne.eu – Ben Aris in Moscow – January 21, 2015) “Ukraine 2015 investment case depends on peace, aid and unity,” says Chris Weafer, CEO of Macro Advisory, but of the three at the moment aid is probably the most important. Ukraine has only five weeks left of hard currency reserves in terms of import cover and […]

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Soros’s Terrible Plan to Throw Money at Ukraine

Ukraine Map and Flag

(Bloomberg – bloomberg.com – Leonid Bershidsky – January 8, 2015) The case President Petro Poroshenko’s government has made for international financial support got a boost from the financier and philanthropist George Soros, who urged Europe to put together a $50 billion rescue package for Ukraine. Both Soros’s detailed plan and the government’s fundraising efforts face an uphill struggle: The government […]

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EU to provide €1.8 billion extra funds for foundering Ukraine

EU Map

(Business New Europe – bne.eu – IntelliNews – January 9, 2015) The EU will provide €1.8bn in macroeconomic assistance to default-threatened Ukraine, the European Commission announced on February 8. But the move might not be enough to save Ukraine from a sovereign default. The loan comes one day after a call by veteran financier George Soros for the EU to find €50bn for […]

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Soros calls for EU to give Ukraine $50 billion bailout

EU Map

(Business New Europe – bne.eu – bne IntelliNews – January 8, 2015) George Soros, the 84-year old financier and philanthropist, has called for the EU to pump $50bn into Ukraine, while predicting a Russian default. “Europe needs to wake up and recognise that it is under attack from Russia. Assisting Ukraine should also be considered as a defense expenditure by the EU […]

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NEWSWATCH: In Ukraine’s Donetsk, the ‘death clutch’ of a forgotten war: Both Russian and Ukrainian economies in tatters, half a million people displaced

Ukraine Map and Flag

[“In Ukraine’s Donetsk, the ‘death clutch’ of a forgotten war: Both Russian and Ukrainian economies in tatters, half a million people displaced” – CBC.ca – Don Murray – January 5, 2015] The CBC and free-lance reporter Don Murray examine the conflict in Ukraine, some of its underlying issues and its human costs: * * * Tens of thousands more Ukrainians are still trapped in […]

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The high price of democracy in Ukraine

Maidan Square file photo

(opendemocracy.net – Andrii Ianitskyi – January 5, 2015) Andrii Ianitskyi was born in Sevastopol in 1983 and since 2007 has been living in Kyiv, the Ukrainian capital. He graduated from the Sevastopol branch of Moscow State University in 2007 and became a qualified journalist before working as a journalist and editor in the business media, for companies including Ukrainian News, […]

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War Severs Ukraine’s Industrial Arteries as Economy Sinks

Ukraine Map and Flag

(Bloomberg – bloomberg.com – Agnes Lovasz, Daryna Krasnolutska – October 2, 2014) The bloody conflict in Ukraine’s east is severing the arteries that connect the nation’s economy. The effects are being felt hundreds of miles from the unrest in industries as different as electricity and food processing. Power plants at the other end of the country are being starved of […]

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