[Let the Food Riots in Ukraine Begin! How will Obama and Bitch Nuland manage to blame Putin for the coming anti-austerity protests?]
Ukraine has agreed to increase the cost of gas to consumer by 280 percent, and 66 percent for heating, as part of the IMF terms for getting extra financial aid, says Valery Gontareva the head of the National Bank of Ukraine.
“From now on, in accordance with our joint program with the IMF, the tariffs will see rather a sharp increase of 280 percent for gas and about 66 percent for heat,” said Gontareva Wednesday during the 11th Dragon Capital investment conference in Kiev. She added that as a result inflation will be 25-26 percent by the end of 2015.
The tariff rises are part of the amendments to the 2015 budget the government has had to introduce in order to receive an $8.5 billion loan from the IMF by the end of the year.
The changes will also see Ukraine’s budget deficit growing to 4.1 percent of GDP and forecasts a 5.5 percent decline in the Ukrainian economy.
Prime Minister Arseny Yatsenyuk had warned of future price rises for gas and heating, and stressed the IMF saved Ukraine from default, and now it’s time to make moves which should eventually result in Ukraine’s complete independence from Russian gas.
The tariff increase was among the subjects Ukraine and the IMF touched upon during negotiations in January. Deputy Chairman of the Ukraine parliament’s budget committee Viktor Krivenko said the IMF had requested a sevenfold increase in prices.
The head of IMF Christine Lagarde said on February 12 that the preliminary agreement reached between Kiev and Western creditors envisages increasing the aid package to $40 billion over the next four years.
The program will help Ukraine receive an additional $25 billion in financial aid, of which $17.5 billion will be provided to stabilize the financial situation in the country.
The latest IMF program will replace the $17 billion package agreed in April 2014. Ukraine has already received $4.5 billion under that agreement, thus the total IMF loans to Ukraine since the beginning of the crisis amount to $22 billion.
A day before a euro zone finance ministers’ meeting in Brussels, thousands hit the streets of Europe to show support for the Greek people and their newly-elected left-wing government which is looking to undo years of imposed austerity programs.
Demonstrations in cities across the UK, France and Spain stood in solidarity with massive crowds in Greece that also went out to express support for the Syriza government led by new prime minister, Alexis Tsipras.
Meanwhile, Syriza officials told media that they remained committed to making good on their promises to Greek voters and improve their country.
“I expect difficult negotiations; nevertheless I am full of confidence,” Tsipras told Germany’s Stern magazine. “I promise you: Greece will then, in six months’ time, be a completely different country.”
“The Greek government is determined to stick to its commitment towards the public … and not continue a program that has the characteristics of the previous bailout agreement,” Greek government spokesman Gabriel Sakellaridis said to Greece’s Skai television.
President Petro Poroshenko gives a speech as he hands over new military equipment to the Ukrainian forces near the city of Zhytomyr, some 140 km from Kiev, on January 5, 2015.
© SERGEI SUPINSKY / AFP
Russian officials have accused the European Union of “militancy” in a bitter response to the Jan. 15 European parliament resolution giving member states carte blanche to supply arms to Ukraine.
The head of the Russian Federation Council committee on international affairs, Konstantin Kosachev, denounced the resolution as “especially militant.”
“The European parliamentarians discourage those who are trying to look for dialogue with Russia, not confrontation,” he said.
The European parliament condemned Russia’s “aggressive and expansionist policy, which constitutes a threat to the unity and independence of Ukraine and poses a potential threat to the EU itself.”
In its resolution, parliament urged the European Council to keep in place tough sanctions against Russia and even proposed broadening them into the nuclear and international financial sectors if Putin’s government continues to destabilize Ukraine.
The resolution went on to state that “there are now no objections or legal restrictions to prevent Member States from providing defensive arms to Ukraine” and that “the EU should explore ways to support the Ukrainian government in enhancing its defence capabilities and the protection of Ukraine’s external borders.”
Aleksey Pushkov, the head of the foreign affairs Committee of the Russian Duma, called the resolution “banal and dangerous.”
“By calling to maintain and even enhance sanctions against Russia the European Parliament is supporting tension in Europe,” Pushkov added.
The European Parliament resolved to support the EU’s existing policy of refusing to recognize Russia’s annexation of Crimea and welcomed recently adopted additional sanctions on investment, services and trade relating to Crimea and Sevastopol.
It also highlighted Russia’s “information war” in Europe and called on the EU officials to develop a plan to counter Russian propaganda with their own Russian language programming.
Yet Ukraine was also disappointed with the resolution, which fell short of describing the Russian-backed separatists as terrorists.
President Petro Poroshenko had claimed on Jan. 13 that the European Parliament was preparing to call on the leaders of European Union to place the self-proclaimed Donetsk People’s Republic and Luhansk People’s Republic on their list of terrorist organizations.
But European MPs instead condemned “acts of terrorism and criminal behavior of the separatists and other irregular forces in eastern Ukraine,” adding that “according to credible sources, Russia continues to support the separatist militias through a steady flow of military equipment, mercenaries and regular Russian units, including main battle tanks, sophisticated anti-aircraft systems and artillery.”
The Russian war — using proxies and, when needed, Russian regular army troops — in eastern Ukraine has already taken more than 4,700 lives, according to United Nations estimates. On Dec. 18, U.S. President Barack Obama signed a law allowing for economic and military support to Ukraine, but the current American policy remains not to supply Ukraine with lethal weapons.
Kyiv Post staff writer Oksana Grytsenko can be reached at firstname.lastname@example.org
“Der Spiegel reports after the European close that ECB QE will not include Greek bonds due to their low rating… but will see national central banks buying own-country debt.”
“… following yesterday’s report that two Greek banks had suffered sufficiently material deposit withdrawals to force them to apply for the unpopular and highly stigmatizing Emergency Liquidity Assistance program with the ECB, now the other two of Greece’s largest banks have also succumbed to reserve depletion after the Greek bank run appears to have gone viral. As Greek Capital.gr reports, now all four Greek banks have requested ELA assistance from the same ECB president who earlier today is said to have unceremoniously kicked out Greece from the ECB’s QE program.”
… the ECB becomes a corresponding Fed in the European area, “serving” the problematic economies that are excluded from the bond markets, through the print of new money. Therefore, the problematic economies will be loaded with more and more debt which the ECB, i.e. the largest private European banks will hold. Someone could argue that is not something new, since nations were facing huge debts in previous years, because they were indebted to banks through the excessive borrowing from the markets. But in this case, there is an important difference that makes things much worse: it is the cruel conditions imposed by the ECB to states that need to buy money. States that are excluded from markets, are now trapped within the neoliberal economic empire of the eurozone and will be forced to follow new austerity measures every time they need ECB to buy their bonds.
[SEE: West wants to end confrontation with Russia over Ukraine – EU foreign policy chief ]
European Union Foreign Policy Chief Federica Mogherini…rejected the idea that the EU’s position on the crisis differs from that of the US.
“It is not true that there is a soft Europe stance, which opposes the US hardline position.”
Mogherini said that Washington’s views on Russia match those of Europe…“everyone wants to get out of the logic of confrontation.”
Victoria Nuland: US-Assistant Secretary of State for European and Eurasian Affairs Geoffrey R. Pyatt: United States Ambassador to Ukraine
America’s leadership had to embarrass Europe to impose economic hits on Russia over the crisis in Ukraine – even though the EU was opposed to such a motion, US Vice President Joe Biden revealed during a speech at Harvard.
“We’ve given Putin a simple choice: Respect Ukraine’s sovereignty or face increasing consequences,” Biden told a gathering at the John F. Kennedy Jr. Forum at Harvard University’s Institute of Politics on Thursday.
The consequences were the sanctions which the EU imposed on Russia, first targeting individual politicians and businessmen deemed responsible for the crisis in Ukraine, then switching to the energy, defense, and economic sectors.
“It is true they did not want to do that,” Biden admitted.
“It was America’s leadership and the president of the United States insisting, oft times almost having to embarrass Europe to stand up and take economic hits to impose costs,” the US vice president declared.
Those costs deemed behind the ruble’s historic plunge not only forced America’s ExxonMobil to retreat from Russia’s Arctic shelf, but also provoked counter-measures from Moscow, which suspended certain food imports from the EU.
Russia’s counter-sanctions have hit many of the EU’s agricultural states. EU members, particularly those close to Russia, were the most affected by the loss of the Russian market.
For instance, the Netherlands – the world’s second-largest exporter of agricultural products – is set to lose 300 million euro annually from canceled business with Russia, as it accounts for roughly 10 percent of Dutch exports of vegetables, fruit, and meat.
At the same time, Poland was hit hard by the Kremlin’s sanctions, as its food exports to Russia totaled $1.5 billion in 2013.
Spain, a large exporter of oranges to Russia, is estimated to miss out on 337 million euro ($421 million) in food and agriculture sales, while Italy has estimated its losses at nearly 1 billion euro ($1.2 billion).
Following pressure from local farmers, a 125 million euro EU Commission Common Agricultural Policy fund was established, from which the growers are expected to get some cash, while Amsterdam is willing to cover the cost of transporting excess produce to eight food banks across Holland.
Overall, Moscow’s one-year food embargo against the EU, the US, Norway, Australia, and Canada will block an estimated $9 billion worth of agricultural exports to Russia.
However, this is no secret to the US, as Assistant Secretary of State Victoria Nuland remarked on Thursday.
“Implementing sanctions isn’t easy and many countries are paying a steep price. We know that. But history shows that the cost of inaction and disunity in the face of a determined aggressor will be higher,” Nuland said.
Nuland’s reference to necessary action against the “aggressor” might be taken with a grain of salt by the Europeans, as the “F**k the EU” leak is still fresh in their memory.
The four-minute video – titled ‘Maidan puppets,’ referring to Independence Square in Ukraine’s capital – was uploaded by an anonymous user to YouTube.
Nuland was recorded as saying the notoriously known phrase during a phone call with US Ambassador to Ukraine Geoffrey Pyatt, as the two were seemingly discussing a US-preferred line-up of the Ukrainian government. It apparently referred to Washington’s policy differences with those of the EU on ways of handling the Ukrainian political crisis, with Nuland suggesting to “glue this thing” with the help of the UN and ignore Brussels.
The US State Department did not deny the authenticity of the video and stressed that Nuland had apologized for the “reported comments.”