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EU and IMF spell disaster for Ukrainian working people - The TERMS of the IMF agreement - Sheesh!
Posted By: RumorMail [Send E-Mail]
Date: Friday, 7-Mar-2014 17:07:12
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On Nov. 21, the elected president of Ukraine, Viktor Yanukovych, decided not to sign an association agreement with the EU. The same day, Prime Minister Mykola Azarov rejected an IMF loan that was one of the conditions of association with the EU.
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Azarov rejected the onerous conditions of the IMF loan: “raise of gas and heating tariffs for the population by approximately 40%; commitment to freeze base salary, minimal salary, general nominal salary on the current level; significant shortening of expenses for budget purposes; reducing of subsidies in energy sector; gradual cessation of the Value Added Tax exemption for agriculture and other branches and other conditions.”
The IMF loan was less than a $1 billion over seven years. Ukraine's debt is approximately $4 billion.
Ukrainians pay 20 percent of their gas bill, while the government pays the rest. The VAT tax exemption, which the IMF also wanted to undo, protects Ukrainian farms and businesses from powerful global competitors. The IMF canceled a prior loan to Ukraine because the Yanukovych government had raised the minimum wage.
In other words, for an insufficient loan the IMF was demanding conditions that would greatly harm workers and small farmers, while establishing the Ukraine as a virtual free trade zone that would inevitably lead to the selling off of industries and resources to the West. It is important to note that up until this point, Yanukovych and Azarov had been in favor of the Ukraine joining the EU.
On Dec. 17, Yanukovych signed an agreement with Russia for $15 billion in loans over five years. Russia also agreed to reduce natural gas prices to the country by 33 percent. Furthermore, Russia did not require Ukraine to change any of its laws or join the Customs Union of Belarus, Kazakhstan, and Russia in order to receive the loan
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