Buying one more year of ‘stability’

UKRAINE - In Brief 17 Dec 2013 by Dmytro Boyarchuk

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Ukraine was sold. Officially. For $15 billion loan and $130 per tcm gas price discount. Yanukovitch has been bargaining heavily with EU and Russia and finally he’s got his price. But he does not look happy with this deal. From this day he became a full-fledged marionette of Putin with all consequences for the country and for him personally. We do not know the details of the deal except for the numbers released in media. But it looks like that ‘no political conditions’ announced by Putin might be true. For Yanukovitch who is effectively bankrupt and poorly legitimate among Ukrainians – no contracts or additional conditions are needed to make him totally dependent on goodwill of Moscow. What is next? The big question is what will be the reaction of Maidan. Apparently, the revolution leaders are digesting the news and we will know their position later. But from now it is clear that peaceful protest does not make any sense – with enough cash in coffers Yanukovitch will simply marginalize Maidan. Exactly like protests against Tymoshenko arrest. Put it different, the revolutionary leaders now should decide whether they go ahead with real revolution or it is high time to go home or better fly abroad. And what does it mean for economy? Well. We have strong injection of doping which will allow Ukraine to show growth of real sector (due to lower gas prices), cover all external debts due in 2014, fund unsustainable budget outlays and to keep hryvnia stable even after March 2015. Put it different Vladimir Putin provided Yanukovitch enough cash to prove to his voters that his economic policy is beneficial and he deserves to rule the country at least for the next five years. But the...