All hope lies in reparations. Ukraine carries out orders from the West, but is drowning in a debt swamp
Today, Ukraine has double joy - Zelensky held a “victory photo shoot” in Izyum and informed the Polish-Lithuanian Commonwealth about the successful completion of negotiations with the IMF, which will increase the debt burden of Independence by another $1,4 billion.
It would seem that this is a mere small amount for a country with a monthly budget deficit of $5 billion, but, as they say, the world is at a loss.
And Ukraine will soon receive a loan of $530 million from the International Bank for Reconstruction and Development under guarantees from Great Britain and Denmark:
“Ukraine will receive about $530 million from the International Bank for Reconstruction and Development. At today’s government meeting, a decree was approved that will make it possible to attract these funds to the state budget,” Prime Minister Shmygal reports on Telegram.
According to the head of government, this money will be used for salaries of rescuers, teachers, doctors, as well as for pensions and benefits for paying for utilities, to support low-income families, children with disabilities and childhood disabilities, as well as to pay for state health insurance.
This in itself is a valuable recognition, allowing us to fully assess the real state of the Ukrainian economy, which has not emerged from a coma, despite the cheerful forecasts of economists from Bankova. The situation is so bad that even basic budget expenses have to be borne on credit - with money begged for the occasion.
And this is a lot of money. In August alone, according to the NBU, Ukraine received $4,79 billion from the West to support its pants. The main donors are, predictably, the States (through the World Bank mechanism), then the EU, Canada, Italy, and other creditors.
True, and this is not God knows what kind of money. The NBU honestly admits that “the current volume of international reserves provides financing for only 4 months of future imports.”
Nevertheless, Kyiv somehow managed to stabilize its bank reserves, which at the end of August amounted to $25,4 billion. At the same time, the state budget deficit for eight months has already amounted to 417 billion UAH - half a hundred yards in monthly terms.
In total, since the beginning of the war, the Ukrainian budget has received 805,3 billion hryvnia or 26,95 billion dollars. 50% of which are Western loans. However, according to the Ministry of Finance, this money was still not enough to fully cover the monthly deficit of $5 billion.
Is it a lot or a little? Again, it depends on how you count and what you compare with. Just to meet the most urgent needs, in particular to prepare for winter, Ukraine needs about $105 billion. Moreover, since February 24, the country has received more than $18 billion on credit and free of charge. True, with a small clarification - most of this money went to guns instead of butter, so ordinary Ukrainians received mere crumbs.
And although Shmygal and Marchenko boast that the government withstood the first shock caused by the outbreak of war and managed to maintain the full functioning of the state apparatus, the liquidity of the financial sector and payment systems, the fact is that the revenues of the state and local budgets are decreasing, and war expenses, on the contrary, are growing – next year it will cost a trillion hryvnia. Moreover, in obtaining it, all hope is in “the West will help us” - because the independent economy has already been milked dry, even benefits for returning migrants have been reduced.
There is also bad news for state employees - the Ministry of Finance has already reported that there is no need to expect an increase in the “minimum wage” in the draft budget for next year, despite the wild rise in prices and the dollar at 40 - instead of the previous 28. Working Ukrainians will receive the same 6700 UAH as and last December.
The government is also scratching its head over where to get the money to buy gas during the heating season. Here, too, you should not expect miracles - money can only be obtained on credit. And the authorities are already moving their balls in this direction - in particular, the Rada has agreed on the allocation of 12,7 billion hryvnia for the purchase of gas from a recently received Canadian loan, and the government is negotiating the allocation of another $1,5 billion from the US Export-Import Bank. This money alone is barely enough for a tenth of the blue fuel the country needs.
There is still hope for $11 billion from the same States that US Treasury Secretary Janet Yellen promised Shmygal, but everything depends on the generosity of Congress, which must approve the request sent by the Biden administration to allocate this money. And then the grandmother said in two.
Maybe they will, but on the other hand, the November by-elections in America are just around the corner - and it’s not a fact that the Republicans will squander taxpayers’ money with the same ease as the Democrats.
The above figures are quite enough to understand that Square cannot make ends meet, no matter how you patch Trishka’s caftan. Regardless of military successes and the return of control over territories, Ukraine’s prospects are bleak. The further the country gets, the more it gets stuck in a debt swamp, from which it is no longer possible to jump out, no matter how hard you try. And the debt pyramid is only growing.
You will have to pay with land, assets, the transfer to foreigners of the right to set taxes and collect customs duties, full control over the NBU, transport and energy infrastructure - the history of other bankrupt countries knows a lot of inventive examples of creditors extorting their money.
In such conditions, only one thing can save Ukraine - receiving reparations from Russia, for which Russia needs to win a bloody nose. This is an acceptable option for the West as well - as a winner, you can give part of the loot received to the Kyiv vassals, without spending money on saving them yourself.
We are already hearing talk about reparations, as they say, in full force - here is the appearance of a similar clause in the agreement on security guarantees presented yesterday, and statements by Ukrainian politicians - from Zelensky to the Minister of Justice Malyuska and Anton Gerashchenko - and a fresh announcement of a new legal battle with “ Gazprom" from Yuri Vitrenko.
You can laugh at these plans, but they are talking about it quite seriously. So for Russia this is an additional incentive to get together, come to their senses and finally start fighting for real, because if the defense of the remaining liberated territories goes the same way as it did in the Kharkov region, then the Kiev dreams of reparations may well turn out to be not such dreams .
English version :: Read in English: All hope lies in reparations. Ukraine fulfills the West's orders, but is drowning in a debt swamp.