Bankers begin “Shock Treatment” for Ukraine
ARTICLE SOURCE: GLOBAL RESEARCH.com
By Prof Michel Chossudovsky
On March 27, Ukraine’s interim coalition government announced concrete policy measures as part of its agreement with the IMF: a 50 percent increase of the retail price of gas coupled with the deregulation of the foreign exchange market.
The hike in gas prices is required by the IMF as part of an 18 Billion dollar pledge, which was approved on March 27. The IMF has demanded that retail gas and heating tariffs be raised “to full cost recovery.”
It is worth recalling that following the instatement of a coalition government on February 23, the interim (puppet) prime minister Arseny Yatsenyuk casually dismissed the need to negotiate with the IMF.
Yatsenyk intimated that Ukraine will "accept whatever offer the IMF and the EU made" (voice of russia.com March 21, 2014)
Prior to the conduct of negotiations pertaining to a draft agreement, Yatsenyuk had already called for an unconditional acceptance of the IMF package: “We have no other choice but to accept the IMF offer”.
In surrendering to the IMF, Yatsenyuk was fully aware that the proposed reforms would brutally impoverish millions of people, including those who protested in Maidan.
In an address to Parliament on March 27, following the confirmation of the IMF's pledged $18 billion loan, prime minister Arseniy Yatsenyuk warned that Ukraine was “on the brink of the economic and financial bankruptcy”.
The proposed "'solution" includes a significant increase in income taxes, a freeze on wages, curtailment of old age pensions and higher energy prices. "We have no choice but to tell Ukraine the truth," said Yatsenyuk.
It should be understood that the IMF money will not enter the country. It is earmarked for the reimbursement of Ukraine’s short term debt. It’s fictitious money.
The combined impact of currency devaluation and the removal of fuel subsidies will trigger inflation. The austerity measures will enforce a freeze in nominal wages, leading to a collapse in real earnings.
Ukrainian self-imposed Prime Minister Arseny Yatsenyuk told the Parliament that it had “no other choice but to accept the IMF offer,” as country fiscal gap in 2014 is projected to reach $26 billion. Ukraine’s Finance Ministry says it needs $35 billion over the next two years to avoid default.
"The country is on the edge of economic and financial bankruptcy," Yatsenyuk said. "This package of laws is very unpopular, very difficult, very tough. Reforms that should have been done in the past 20 years."
The Ukrainian people should understand that this agreement reached with the IMF will have devastating social implications. This government integrated by Neo-Nazis has betrayed the people of Ukraine.
It is not acting on behalf of the people of Ukraine, it is obeying orders emanating from Washington and Brussels. The IMF economic package is an act of economic warfare. Its acceptance by the self proclaimed government is an act of treason.