THE coupist regime in Kiev has reached a preliminary deal with the International Monetary Fund to try to unlock $27 billion of ‘international support’ to avert a complete collapse of the Kiev regime.
The government in Kiev reached a staff-level agreement with the Washington-based lender for a two-year loan of $14 billion to $18 billion, the IMF said in an e-mailed statement yesterday.
The IMF’s board must still sign off on the package, and the government needs to complete a list of ‘prior actions’ to achieve the ‘sign-off’. Being ‘saved’ by the IMF and the World Bank will come at a very heavy price.
The IMF is expected to approve the deal in April after scrutinising the list of ‘prior actions’ that is being demanded. These are expected to be savage cutbacks that will make the situation of the Greek workers and youth appear ‘reasonable’.
Approval is ‘expected in April, following the Kiev authorities’ adoption of a strong and comprehensive package of prior actions aiming to stabilise the economy and create conditions for sustained growth’, IMF mission chief Nikolay Gueorguiev said in the statement.
Disbursement may start next month, he said at a news conference in Kiev, meaning that the cuts have to be ongoing and deep before any cash arrives.
‘The country is on the edge of economic and financial bankruptcy,’ ‘Prime Minister’ Arseniy Yatsenyuk said in Kiev yesterday. he added: ‘This package of laws is very unpopular, very difficult, very tough – reforms that should have been done in the past 20 years.’
Yatsenyuk has described his task as a ‘kamikaze’ mission, saying Ukraine is in a ‘great mess’ with an empty treasury, unpaid pensions and foreign-currency reserves that have been ‘robbed’.
Gross Domestic Product will shrink three per cent and inflation may be 12 per cent to 14 per cent this year, with state debt at 53 per cent of GDP, Yatsenyuk said. As part of the IMF agreement, the Ukrainian government agrees to cut the budget deficit to 2.5 per cent of GDP by 2016 and to raise retail energy tariffs toward their full cost. The country will probably pay $480 per 1,000 cubic metres of Russian gas from April 1st, Yatsenyuk said.
Ukraine, which depends on Russia for more than half of its gas needs, plans to import about 30 billion cubic metres this year, Energy Minister Yuriy Prodan said. As the Russian discounts evaporate and the IMF demands smaller subsidies to protect public finances, the price for households may rise by 40 per cent, Prodan added.
Ukraine’s interim government said yesterday that it will raise gas prices for domestic consumers by 50% as part of the ‘prior actions’. An official at Ukraine’s Naftogaz state energy company said the price rise would take effect on 1st May, and further rises would be scheduled until 2018.
The IMF has made subsidy reform a condition of its deal. This will bankrupt whole sections of the state-owned economy and see the privatisation of what remains.
This pact with the IMF – which the elected President Yanukovych rejected, leading to the fascist-led coup that overthrew him – will lead to a massive conflict in the Ukraine between the pro-IMF–EU regime and the working class, both in the east and the west of the country.
The regime is already split, with the Right Sector fascists – who have a candidate standing for President, and played a leading role in the Maidan coup – vowing revenge against the Ministry of the Interior after its special forces ambushed and killed the notorious Aleksandr Muzychko.
The working class throughout the Ukraine will fight the IMF-backed regime and its savage cuts counter-revolutionary programme.
Workers must mobilise and build soviets and workers’ militias in every part of the Ukraine to organise the workers political revolution that will become more necessary and urgent with every day that passes.
The revolution in the Ukraine will restore rule through Workers’ and Peasants’ Soviets and will play a huge role in the reconstitution of the USSR by revolutionary means. There is no doubt that the Iron Heel of the IMF and the EU will drive this revolutionary development forward, and that it will be part of a major leap by the world socialist revolution.