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Revolution in Ukraine provoked by foreign agents created specific problems for the economy of Ukraine and the Ukrainian people. But this does not mean that Ukraine is on the verge of destruction. On the contrary, it is likely the project of foreign special services regarding the insurrection in Ukraine has tumbled, and the Ukrainian opposition leaders are fighting among themselves. At that, the legitimate government of Ukraine controls the situation both in the economy of Ukraine and at its financial market. That is why no attention should be paid to any panic forecasts that Ukraine has trouble in fulfilling its foreign liabilities. Despite all the difficulties, Ukraine has fulfilled its liabilities to foreign investors and will continue to do so.

According to the schedule of IMF credit return, Ukraine must redeem the next tranche in the amount of SDR 2.418 billion in 2014, and another SDR 0.98 billion in 2015. At repayment of these remaining credit amounts, Ukraine will make all settlements with the IMF and fulfill its obligations in whole. In the end of January Ukraine shall repay SDR 0.665 or USD 1.05 billion of tranche. For this purpose, the government of Ukraine made a decision to allocation Eurobonds for the amount of USD 2 billion. Russia has already agreed to purchase this yet another issue of Ukrainian Eurobonds. At that, the bonds will be allocated at the annual rate of 5%, which is not much more expensive than the IMF loans for Ukraine. Practically, the replacement of the IMF loans with the sale of Eurobonds to Russia does not increase the load upon government finance, but still exempts the economy of Ukraine from the doubtful advice of the IMF. Repayment of the IMF loan will finally allow the economy of Ukraine to operate normally and develop successfully. The experience of obtaining loans from the IMF in 2008-2009 and fulfillment of its recommendations has showed that the IMF recommendations only created problems for the economy of Ukraine as they were deliberately erroneous.

The fact that Ukraine started selling its Eurobonds to Russia caused negative reaction from the representatives of the USA and the EU. Russia also expressed doubts about the purchase of Ukrainian Eurobonds, but this criticism is more of a populist nature and practically causes no effect upon the decisions of the Russian government. According to the latest statement of Vladimir Putin, Russia will continue to fulfill all the agreements signed between Ukraine and Russia, including agreements on purchase of Ukrainian Eurobonds, despite the change of government in Ukraine.

That’s why Ukraine can always count on selling its Eurobonds to Russia for the amount of USD 12 billion, which will ensure maintenance of forex and gold reserves in Ukraine at a sufficient level to fulfill all its foreign liabilities. As soon as the riots in Ukraine stop, an incoming flow of investments from other foreign investors might be expected, as well as restoration of normal operation of the Ukrainian economy.


Author :
EurActiv Network