Saturday, March 29, 2014

About That Bailout for Ukraine?

We've been hearing rumblings since before the overthrow of Yanukovych last February that the IMF/EU would be delighted to refinance Ukraine's debts on favorable terms -- provided Ukraine adopts severe austerity measures like those of Greece -- or even twice as harsh as the terms imposed on Greece.

Yanukovych was overthrown in large measure because he refused to accommodate those terms -- once he fully understood what those terms meant. The problem with negotiating EU/IMF bailout terms is that the actual terms are not disclosed until the moment comes for signing the documents. And then, oh my goodness. The terms are much harsher, the consequences for not abiding with them are much more severe, and the determination of the EU/IMF negotiators to have their way, no matter what, is shocking.

Yanukovych was expected to sign away Ukraine's patrimony and sovereignty at the Vilnius conference last November, but he balked, said "No!" and turned to Russia for aid. Russia offered a much better deal on terms that did not unduly interfere with either Ukraine's sovereignty or the welfare of its people. Compared to IMF/EU demands for harsh and immediate austerity measures on the people of Ukraine in exchange for a "bailout" that required extremely harmful and unpopular economic "reforms," (reforms that potentially included some "good" measures along with the bad) the Russian deal allowed a much more moderate economic transition and the integration of Ukraine's economy with those of the Russian led Eurasian Economic Union -- apparently as well as that of the EU, but on terms that would protect Ukraine's people from the abuses so customary from the EU toward the Periphery.

The anti-Yanukovych demonstrations in Kiev and elsewhere in Ukraine began immediately when Yanukovych refused to sign in Vilnius, as if they had been organized prior to the conference. What struck me about the research I did into New Citizen and Center UA, the NGOs Pierre Omidyar funded in Ukraine, was the fact that the dozens of orgs under them, some of which, in turn, were umbrellas for dozens or even hundreds of other NGOs and individuals, like Russian matryoshka dolls, was their obsessive focus on EU integration and 'education' (propaganda) on behalf of Europe. This was a long term project. Some of the orgs and NGOs had been promoting the EU cause in Ukraine for decades, since independence from the Soviet Union. Many of the orgs were focused on youth, which meant that over the decades, Ukrainians grew up knowing little or nothing besides pro-EU propaganda.

Many of the NGOs under New Citizen and Center UA's wing (New Citizen is a "project" of Center UA, which appears to be the master org) were also funded by NED (National Endowment for Democracy) and USAID (US Agency for International Development), both of which are considered CIA fronts, though NED has so far been able to abjure the label and claim independence from CIA control.

My point has never been that the US precipitated the revolt in Ukraine against Yanukovych. If it had, I don't think the rightists in this country would be parading around screaming about "weakness." Instead, it looks like there was a coalition of pro-EU interests in Ukraine who were prepared to go to the streets should the Yanukovych regime balk at EU/IMF demands for austerity and other "reform" measures. Up to the point of the Vilnius conference, the Yanukovych government had been working closely with the EU and IMF toward the goal of European integration. There was very little indication prior to Vilnius that Yanukovych would balk and take the Russian offer.

For its part, the US seems to have been most concerned with the US corporate sector and its interests in exploiting the resources of Ukraine. I haven't written much about that, but there were and are major US corporate interests involved in the Ukrainian issue, some of which are highlighted in the triumphal Vicky Nuland-Kagan video posted previously. But there are many more. A number of people have looked into the corporate interests involved in Ukraine's current unpleasantness, and they read like a who's who of American corporate greed. While their corporate interests are being protected and fostered by the US government, they do not appear to be the ones who precipitated the revolt. The revolt seems to have arisen locally if not spontaneously, driven by the many EU integration currents fostered by the multiplicity of NGOs -- hundreds and hundreds of them -- which had been promoting EU interests in Ukraine for many years.

Now that the interim "government" of Yatsenyuk has signed onto the IMF/EU "reform" demands, some of the details of just what is being provided and required are coming out, and it is becoming clear what a duplicitous two-step has been underway all along.

According to the UK Telegraph, what the deal amounts to is paying off Russian banks and Western hedge fund creditors at 100% while forcing increasingly dire levels of austerity on the Ukrainian people, austerity measures that will lead to misery and despair, death and depopulation, much as happened in Latvia, and much more severe than the measures imposed on Greece. The fact that Russian banks and US and European hedge funds are being paid off at the expense of Ukraine's people is interesting and gives a clue to the thinking behind the various maneuvers that have taken place.

The claim is made that Yanukovych absconded with tens of billions (up to $70 billion) in his flight from Kiev, and that's why such severe measures are "necessary" to prevent Ukraine's economic collapse. Yet prior to the overthrow of Yanukovych -- and his alleged theft of funds -- the same measures were being demanded.

In other words, the issue of how much has been "stolen" by the Ukrainian oligarchs and the Yanukovych government is beside the point. The money which is being offered by IMF and EU (which includes a little bit from the US) has nothing to do with that issue. It's propaganda to say it does, propaganda that is supposed to make Ukrainians more compliant with their suffering now by blaming Yanukovych for it.

It seems to me that Yatsenyuk's belligerence during this period is also part of a propaganda campaign to ensure popular submission to these highly destructive measures being imposed by the IMF and EU, and to ensure that the resource exploitation by American and EU companies is not interfered with. 

And if I'm reading the beads right, Russia has no problem with any of this as long as their interests and oligarchs get paid. Jesus, what a cockup.

Quite a show when you think about it.


  1. Yes, indeed, to the entirety of this post, Che.

    Although I think that after being installed via a coup, it's called a junta, not an "interim government".


    - Teri

    1. Seems the propaganda is still very strong, but more and more observers are realizing that the "junta" -- yes, correct -- in Kiev is on a path of self-destruction and destruction for the Ukrainian people. Even Yats says he's on a Kamikaze mission.

      Why do people do this...?