Tag Archives: IMF

IMF towards Ukraine’s pro-Western leaders: ”We’ll pay for War !”

Do you think that the title is exaggerated ? Then how would you synthesize the following news ?

(Reuters) – The International Monetary Fund warned on Thursday it would be forced to re-design its $17 billion bailout for Ukraine and require additional financing if the country lost territory in its restive eastern region. The Fund also said a deterioration in relations between Ukraine and Russia, which buys about a quarter of Ukrainian exports, could further hurt Kiev’s economy (!?) and force an adjustment to the bailout approved by the IMF board on Wednesday.

Statement by IMF representatives came as a response to the statements of the interim president of Ukraine, Olexander Turchynov. Yesterday, the West must have been unpleasantly impressed listening to the lamentations of Turchynov. Ukraine’s acting president has admitted what had long been obvious: ”his government has practically lost control of the east of the country”, with his security forces “helpless” to stop a rolling takeover by pro-Russia gunmen. Turchynov also said numerous ”Ukrainian military and security personnel had defected to the rebels, taking their arms with them”. Using the language of defeat, he told a meeting of regional governors: “I will be frank. Today, security forces are unable to take the situation in the Donetsk and Luhansk regions quickly under control”. (His comments came after anti-Kiev militants seized a string of official buildings in the eastern city of Luhansk on Tuesday).

UKRAINE-RUSSIA-POLITICS-CRISIS-SLAVYANSKSo, without Ukraine’s tax revenue from the rich East and some businesses to robbed, and with the western regions hoping to become the new European assisted social and get on EU benefits programs, the IMF representatives have seen black in front of their eyes. ”No fight – no East, no East – no money” ! Faced with the threat of financial occult leaders in Kiev have seen red in front of their eyes. ”No IMF money – no alms and electoral promises – no votes – no legitimacy!”. Next move – Ukrainian government launches a new military offensive.  

Early today 2 May, an anti-terrorist operation initiated by the Ukrainian government resumed in Slaviansk, a Donetsk Oblast city of 125,000 people that has been occupied by pro-Russian militants.

May 2, 4:12 p.m. – The pro-Russian protesters in Slaviansk are keeping almost the entire city under control except several streets in the suburbs, a source from the self-defense headquarters told Interfax. “The security forces controlled by Kyiv have failed to take the city but have taken only a couple of streets in the suburbs. The city itself is still fully controlled by the self-defense forces” he said. Shooting is still heard in the city, but no large-scale combat activities are under way now, he said.

May 2, 5:45 p.m. – Interim President Oleksandr Turchynov said the Ukrainian forces’ attack on the checkpoints in Slaviansk on May 2 left “many insurgents dead, wounded and arrested”. “The operation doesn’t unroll as fast as we want it to, and is significantly complicated by the fact that the terrorists’ bases are located in the crowded cities and the terrorists themselves hide behind the civilians, take hostages and shoot from the windows of apartment buildings” Turchynov said.

The fight goes on ! Welcome ! a new ”Syria” is coming…

Let’s make things clear ! I don’t like the idea&way of Russia expanding its borders. I also hate the idea&way of the Ukrainian coup government is killing the other Ukrainians that wish nothing to do with the new government.

But to push into a corner a state and after to say ”we make the rules ! you follow them or die ! but it’s your choice to live/get this money or not !” is a serious criminal offense . It’s called extortion. Extortion of human lives !

Update, May 2, 19:00 pm – Events in Odessa are a terrible tragedy. No one mind and soul still right can believe otherwise.

(BBC News) – At least 31 people have been killed in a fire in an official building amid violence in Odessa in south-west Ukraine, the interior ministry says.

The deaths came as pro-Russian protesters clashed with Ukrainian government supporters in the city.

Officials said some people were overwhelmed by smoke and others died after they jumped from the building.

EU – Summit on the Titanic’s board

European leaders delayed the Friday’s Summit, two days after the EU Finance ministers reunion did not reach any result on Greece. In addition, the German chancellor, Angela Merkel, was crucial in resisting pressure for a meeting on Friday, arguing that it would be too early to deliver the comprehensive package of measures needed to restore stability to the euro zone, one official briefed on the discussion said. Under discussion is a proposal from the Institute of International Finance, a Washington-based organization grouping more than 400 financial institutions world-wide. Herman Van Rompuy, the president of the European Council, hoped to organize the meeting for next Monday or Tuesday, said the official, who was not authorized to speak publicly.

As already I anticipated some time ago, at the recent meeting the EU Finance ministers agreed, for the first time, that they could reach a selective bankruptcy for Athens. These actions and an unraveling uncertainty followed the Euro zone’s failure Monday to come up with a comprehensive second bailout deal for Greece, worth $120 billion. Holland Finance Minister Jan Kees Dutch Jager said at the end of the meeting that the European Central Bank still rejects the idea of bankruptcy for Greece. However, the 17 euro zone countries do not exclude default because need to have more options, due to drastic tightening perceptions of Italy and Spain for fear of contagion. Agency Moody’s changed the credit rating of Ireland, from “Baa3” to “Ba1” with a negative outlook, retrograde rated in “junk” and warning that the state will need a new package of bailout from the international financial institutions (previously Moody’s downgraded Portugal, citing similar reasons.). The Irish were upset. They were very angry. Just as was Greece in early May. An unnecessary and inefficient reaction. Ireland has implemented, of course, like other countries, according to IMF, austerity policies quite drastic. But, despite the austerity policies reduce the budget expenditures also have fatal flaw to further reduce budget revenues by contracting economy, the inevitable consequence of tax increases included in the policies of austerity and declining purchasing power driven by some cuts revenue. So the budget imbalance is not resolved. So just weakens the economy of that country. Also, Moody’s gave us a seemingly good news. Good to calm a little the capital markets. Italy is a solvent country. “Most of the titles have a long-term maturity, even though spreads rise, debt is sustainable” said Moody’s analyst Alexander Kockerbeck in an interview with Italian daily Il Messaggero. However the cost of insuring debt against the entry of Italian state in default exceeded the calculated cost for Bulgaria and Romania, according to Wall Street Journal Europe. The situation shows how little matter the official credit rating of a state. Both Eastern European countries are assessed by Fitch to BBB-, it means six levels below that of Italy.

But reduce rating Ireland affected the capital shares and the euro traded in Asian markets. Euro depreciated to the minimum the last four months against the dollar. Dollar that, also, does not feels very well due to bad news that are coming from the United States. President Obama, despite the strong appeal to Congress to find a balanced approach to deficit reduction, seems unable to avoid an “economic Armageddon”. Wednesday, Credit rating agencies moved closer to an unprecedented downgrade of the U.S.’s debt amid deteriorating talks in Washington, with president Obama abruptly walking out of a key meeting with Republicans seeking a deal to raise the federal borrowing limit. Minnesota State has already declared bankruptcy on July 1. In the first three months of 2011, 500 wealthy Americans have given up their citizenship. Now they are happy: no taxes ! As U.S. firms, they have a much easier solution – simply move their business in more profitable countries, where not must to pay for social protection and where the wages are lower: China, Malaysia, Hong Kong, India … even Russia and Poland.

Approximately this is the general picture sketched more or less apocalyptic, in which the humanity is evolving at this time.

“Give me control of a nation’s money and I care not who makes it’s laws” — Mayer Amschel Bauer Rothschild

This year, on August 15, marks 40 years since the U.S. unilaterally abandoned the gold standard, ie full convertibility of the U.S. dollar in gold. On August 15, 1970 to put an end to the Bretton Woods system established in 1945 and President Richard Nixon unilaterally decided to freeze the dollar’s convertibility into gold, which turned the U.S. currency in cash changeover (fiat currency).

Austrian school economists say that no gold standard has enabled central banks to issue currency without restrictions, prerogative that they have abused, which led, ultimately, the formation of speculative bubbles in decades. On the other hand, fans of British economist John Maynard Keynes theory held that gold norm is a “barbarous relic” that not allow the state to use monetary policy to adjust the economy. In fact, we had 40 years of hidden inflation and financial turmoil. An unrealistic world financial system, protected by a global political system depended and blind to the greed of fat cats from Wall Street and other places where the money never sleeps. And the result could not be other than what we see today.

 An honest bankruptcy is healthier than a long illness !

 It speaks more often of some euro area’s exit, it takes into account the return to gold standard. The analysts on both sides of the Atlantic are singing funeral of the welfare state. Public finance crisis intensified in recent time increased the likelihood of a scenario of “hard landing” for the world economy. The expected reunion of the European leaders seems to be a session of commandment on board of the Titanic. The ship is adrift and the insidious water is gathering in the engines room. And miraculous solutions aren’t. Importantly, however, is to recognize the gravity of the situation. Hypocritical promises have no meaning. Some citizens have already noticed and begin to create panic. And that’s not convenient. The world’s leadership still hasn’t finished loading boats for themselves and their friends. Also, there are simple guys who were tired of the false sound of orchestra and they begin to understand how the things run. Most are scared. Between the euro and dollar, the choice is useless. The journalists began to scream about shipwrecks, diving, sharks financial, apocalypse and other ones. Luckily, the world still largely considered them batty and stupid. But their voices begin to multiply. Some desperate people were thrown overboard. And others have resigned and turned back to listen the orchestra. Most intelligent people made ​​rafts and put aside the reserves they could find and now paddled to the nearest island. Some of them scream from a distance trying to convince others that the ship is sinking. But the orchestra plays and it is difficult to understand what they say.

There are some alternatives. Even if these cannot to deliver results overnight. And the suffering of population is unavoidable. It is advisable to stop the political music, to get off the boats and save what can be saved. Because the world debts clock alarming ticking, the ship is more difficult to control and time is running…

Published – Oriental Review, 14 July 2011

Update: 21 July 2011

European leaders agreed on Thursday to provide a second bailout package for Greece and drastically expand rescue funds to prevent financial crisis spreading through the eurozone.

According AFP, European Union president Herman Van Rompuy said the rescue deal would be financed by both the EU and the International Monetary Fund. European governments and the IMF will contribute a total of 109 billion euros. The private sector’s share will amount to 49.6 billion euros.

IMF has suspended talks with Romania

Delegation of the International Monetary Fund has suspended talks with Romania. They will reload after the normalization of political situation and investing a new government. Also, the IMF and the European Commission announced that Romania will not receive the next tranche of money in December 2009.

IMF chief delegate, Jeffrey Franks said:  “We made excellent program in talks with authorities in the last 10 days. We believe that we can quickly finalize the analysis of economic evolution in so short a time to release the next trance if the political situation will resolve “.

Elena Flores (European Commission): “Once the political incertitude will overcome and there will be an official budget for 2010 will be able to finalize and release of loan tranches”.