IMF DEAL WILL BREAK UKRAINE, HARM GLOBAL STABILITY

Guest Sun 30 Mar 2014, 14:38

IMF Deal Will Break Ukraine, Harm Global Stability

Mar. 28, 2014 1:45 AM ET | Includes: ESR, GUR

Summary

The IMF-Ukraine deal will lead to Ukrainians paying one fifth of income on heating. There are also other measures which will hurt living standards.
A fragile Ukrainian society is unlikely to withstand this pressure and is likely to tear itself apart.
The result is that the European Union can be left without 1/5 of its gas supplies, leading to economic disaster.

Now that the spectacular part of this crisis is over, with the Crimea situation settled and the new government in Kiev settling in, the spotlight on Ukraine is slowly going to fade. The markets welcomed the news of the IMF deal by lowering the CDS rate for Ukrainian bonds (link). An economic war between Russia and the West is not likely to materialize. I believe the European Union is partially aware of its vulnerability in the event of economic hostilities breaking out.
W