August 25, 2014 Ukraine: Economy Declines, Merkel Sues For Peace Recent statistics show that the already decaying Ukrainian economy is further turning towards depression. New money from IMF loans, if granted, will solely go into military costs. The European Union will not bail out Ukraine and Germany, hurt by Russian counter-sanctions, is suing for peace with Russia. Nulandistan's wheels are falling off and no one one will help to repair it. According to the Ukrainian government statistics production in July 2014 decrease compared to July 2013 (both ex-Crimea). Mining of coal and lignite was only 71% of its former numbers. Manufacture of coke and refined petroleum products was 84% of its 2013 value. Manufacture of chemicals and chemical products 77% and natural gas production and distribution was 78% of its 2013 number. As the government's fight against the people in Ukraine's industrial heartland continues these numbers will continue to go down. Ukraine's standard of living did not, unlike in Russia, significantly increase over the last 20 years. Since the beginning of the year inflation increased to 19% and the Ukrainian central bank had to raise interest rates from 6.5% at the beginning of 2014 to 17.5% now. This to support the value of the Ukrainian currency as the hryvnya has fallen 40% since early 2014. The banking system is coming apart: The ratio of banks’ non-performing loans will reach 30 percent this year as credit costs rise, Moody’s Investors Service predicted in a May report.

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Ukraine’s lenders are already in a precarious position, according to the IMF, which estimates that the nation’s biggest 22 banks would require fresh capital of as much as 5 percent of gross domestic product if the hryvnia averages 12.5 per dollar this year. The Ukraine is now requesting a third and fourth tranche of an IMF loan but the $2.2 billion it expects to receive is about as much as it plans to additionally spend for military operations. Under the conditions of the new IMF loans Ukraine's standard of living will decrease further and poverty will rise. Some delusional minds in Kiev may hope that the EU will hand them some money. That is not going to happen. EU economies ex Germany are in serious trouble and Germany is not eager to help either: There is precious little enthusiasm among the German public for bailout of other Eurozone members. The idea that Germany will consent to spending tens of billions of dollars rebuilding Eastern Ukraine is completely and totally divorced from political reality. Can anyone seriously imagine Angela Merkel, whose country recently had its 2014 growth estimate downgraded to a mere 1.5%, going in front of the German public to demand a substantial outlay for Ukrainian infrastructure? It would be political suicide, and Merkel is clearly a clever enough politician to understand this. The German government had to cut is GDP forecast because of the insecurity the sanction back and forth with Russia introduced into businesses. The issue will clearly hurt her in the polls. That is likely why she is sending peace signals to Russia: [Merkel] mentioned Ukrainian “decentralisation”, a deal on gas prices, and Ukraine’s “trade relations” with Russia as elements that could bring about an accord [between Ukraine and Russia].

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"I want to find a way, as many others do, which does not damage Russia. We [Germany] want to have good trade relations with Russia as well. We want reasonable relations with Russia. We are depending on one another and there are so many other conflicts in the world where we should work together, so I hope we can make progress”. This also from an interview Merkel gave to public German TV yesterday: A solution must be found to the Ukraine crisis that does not hurt Russia and which the Ukrainian people must choose for themselves, German Chancellor Angela Merkel said on Sunday.

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"There must be dialogue. There can only be a political solution. There won't be a military solution to this conflict," she said.

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On Saturday, her vice chancellor Sigmar Gabriel had suggested that establishing a federal Ukraine was the only viable solution to the crisis pitting Kiev against pro-Russian separatists. Merkel said that if Ukraine opted to rejoin the Eurasian Union with Belarus, Kazakhstan and Russia, then Europe would not make "a huge conflict" out of it. Especially the last point is clearly a big step back from the earlier all out "Ukraine is EU" position. Additionally to the economic side, pressure on Merkel also grows because there is more and more doubt, even in German mainstream media, about the veracity of the Ukrainian propaganda and about the destruction of flight MH17. Why is there is no news about it? Is there a coverup (in German)? The wheels are coming off in Victoria "Fuck the EU" Nuland's new Ukraine. Her project of capturing Ukraine from Russia while letting the EU pay for it is not going as planned. The likely result of Nuland's coup in Kiev will be a destroyed Ukrainian economy and no winner at all. Posted by b on August 25, 2014 at 17:30 UTC | Permalink Comments next page » next page »