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Russia Threatens With Pulling Bailout As Ukraine Government Resigns

Tyler Durden's picture




 

Mykola Azurov, the prime minister of Ukraine, (and his cabinet) has resigned. The move comes as the government faced losing a no confidence vote and being stripped off their power. It seems the opposition (pro-Europe) are gaining momentum once again as the Ukraine also repealed the controversial anti-protest laws that created more tension last week. The Russians are not amused and have warned that they may reconsider the $15 billion bailout offer if the current government is removed. The Ukrainian Hryvnia is continuing its collapse on this news and has dropped towards record lows (though bonds are rallying).

 

 

The opposition is clearly gaining momentum...

Mykola Azarov, the prime minister of Ukraine, submitted his resignation on Tuesday hours before he risked being stripped of his powers in a vote of no confidence in Parliament. His offer to quit was the latest sign of the building momentum of the opposition in the ongoing crisis.

 

In another concession to the opposition, the pro-government political party in Parliament, the Party of Regions, voted together with the opposition to repeal most of the laws in a package of rules limiting free speech and assembly the lawmakers had passed just a week earlier.

 

...

 

One elderly woman in a kerchief giddily told the Ukrainian channel 5 television after Mr. Azarov’s resignation, “Thank God you heard us!”

But the Russians are not happy (via WSJ):

Russia may reconsider its $15 billion bailout offer to Ukraine if the current government is removed, a senior official said Tuesday, hours after Ukraine's prime minister offered his resignation in an effort to calm a growing protest movement. "There is no decision yet, but it is self-evident," that further distributions of the loan would be reviewed if the government of Mykola Azarov was to be dissolved, the official said speaking on condition of anonymity.

However, this is far from over...

Opposition leaders have so far called the president's concessions "too little too late," and appear to be in no mood to compromise with him as protesters have seized government buildings in the west and center of the country.

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Tue, 01/28/2014 - 10:28 | 4374847 LawsofPhysics
LawsofPhysics's picture

This country is deeply divided folks.  Let the civil war begin already.

Tue, 01/28/2014 - 10:29 | 4374860 Cult_of_Reason
Cult_of_Reason's picture

What country will default first Ukraine or Argentina?

Tue, 01/28/2014 - 10:34 | 4374884 LawsofPhysics
LawsofPhysics's picture

Argentina already has.  I hope this doesn't spill over into Brazil, they are good customers.

Tue, 01/28/2014 - 10:39 | 4374899 Mark Carney
Mark Carney's picture

So many small fires burning everywhere and never in history have we been able to see them all spread in real time.

 

Interestine times we live in.

Tue, 01/28/2014 - 10:56 | 4374976 kridkrid
kridkrid's picture

My friends maintain that the world is always like this... that my insistence that things are heading towards a dark conclussion is both conspiracy and paranoia.

Tue, 01/28/2014 - 11:07 | 4375033 Boris Alatovkrap
Boris Alatovkrap's picture

Only paranoid is survive.

Tue, 01/28/2014 - 11:10 | 4375040 Dr. Destructo
Dr. Destructo's picture

I'm sure many Roman citizens never felt that their empire would crumble; they probably said: 'Rome has been standing for centuries!'. They're just trying to cope by clinging onto some resemblance of normalcy.

The anticipation is bad enough, some people can party with the storm clouds on the horizon. I, on the other hand, make sure everything's 'gudugo'.

Tue, 01/28/2014 - 12:31 | 4375388 Leaf of Tree
Leaf of Tree's picture

Of course they didn't want Rome to fall.

Do you know why? Because they have benefited from the weatlh gathered by Roman legions through out the known world. They even took pride in their exploitation. 

To be a citizen of Rome. To kill, rape, steal, pillage in her name as a soldier in a legion was a great honour.

 

The same with United Stateans. They benefit from the wars. Cheap oil. Cheap gadgets made un China. Lots of fun while millions suffer in Africa/Asia. United Stateans do not care. They are citizen of the new Rome. Like the old Rome, the new Rome will fall.

Tue, 01/28/2014 - 14:19 | 4375950 Oracle 911
Oracle 911's picture

According Plato and other (Tibetan etc) sources the same thing happened to Atlantis.

Because the same sources says Atlantis were technologically more advanced as us. Something is telling me the last Ice age circa 10 000 years ago was their fault.

Philosophical question if Rome had the same weaponry as us, how would things ended?

 

Our situation is bleak, at best.

Tue, 01/28/2014 - 12:55 | 4375534 Ghordius
Ghordius's picture

the Eastern part of the Roman Empire went on for 1'000 years after the Western part crumbled, half of that time as a "great power"

to put it in today's context, imagine the US crumbling during the next 300 years, then succumbing, and europe going on further 1'000 years. feel free to exchange europe for US and US for europe if this fits your worldview better

Tue, 01/28/2014 - 13:03 | 4375584 Herd Redirectio...
Herd Redirection Committee's picture

Then perhaps the Ottoman Empire is a more fitting example.  Kept on life support for the better part of its final 70 years, until it could finally be put out of its misery 'properly' (that is, Britain and France didn't want Russia to gain territory from the Ottoman empire collapsing).

Tue, 01/28/2014 - 14:44 | 4375647 Leaf of Tree
Leaf of Tree's picture

You are right.

 

But look at empires from a chronological point of view.

From 10000 BC up until today I see one pattern;

- all empires as time passed had shorter lives.

The Babylonians had their fun. The ancient Egypt was a couple of tthousands years old empire. Rome then was way shorter than Egypt.

Spanish, Ottoman, British, Austrian empires were each less than Rome in duration.

I doubt it the US will decay slowly in 300 years.

More like 50. Words travell way faster and easier these days. So empires will also fall way more rapidly.

 

Tue, 01/28/2014 - 14:23 | 4375970 Oracle 911
Oracle 911's picture

We are living at least 300 times faster then them, you can get a letter in minutes instead for 3 weeks. It won't take 300 years it will end in this decade or the next (more likely the 1st option is more plausible).

Tue, 01/28/2014 - 14:56 | 4376206 Hacked Economy
Hacked Economy's picture

@Ghordius,

Yup.  When Emperor Constantine moved the capitol of the Roman Empire from Rome to Byzantium in 330 A.D., he renamed it after himself as Constantinople (now modern-day Istanbul in Turkey).  When the Visigoths sacked Rome a century later circa 410 A.D., it heralded the infamous dissolution of the Western half of the empire, while the Eastern half - ruled from Constantinople - flourished for centuries afterward.

Tue, 01/28/2014 - 11:09 | 4375036 chubbar
chubbar's picture

Can someone tell me why the western half wants to join the EU? Are they completely unaware of what is going on with the other countries that have joined that union? I'm sure the system they have now sucks, but can it be that much worse than that of the EU? Is this a cultural thing or what? I don't get it. At least Russia has energy to supply them with, what is the EU going to offer them other than a dose of austerity and a hearty "good luck"?

Tue, 01/28/2014 - 11:29 | 4375141 dcj98gst
dcj98gst's picture

Being a part of the Euro "trade" group is not the same as adopting the Euro. Ukraine is not adopting the Euro.  The trade agreements would just make it hard for the corruption to flourish in the Ukraine which is their biggest problem.  Although the Russia bailouts are better short term, the long term problem is that nobody wants to invest in Ukraine because there is no security from the gov. confiscating your buisness (and it happens all the time).   My wife's cousin has to pay 70% of the profits on his buisness because the gov. thugs basically stormed the buisness one day and mandated it.  

Euro trade warrants open books and makes it harder for the government to be corrupt with the buisness.

Tue, 01/28/2014 - 11:49 | 4375240 reload
reload's picture

here in the UK my business is forced to pay the government numerous kinds of `taxes` - and if I dont they will put me in prison.

ok, ok; I know in theory it is not quite the same, but it feels the same on a lot of days.

Tue, 01/28/2014 - 12:03 | 4375311 dcj98gst
dcj98gst's picture

At least you know what you are going to pay.  Try doing a buisness model by gauging the whim of some gov thug.  

Tue, 01/28/2014 - 19:26 | 4377348 Hi Ho Silver
Hi Ho Silver's picture

Lot's of business here in the US doing that everyday now.

If you like your business model you can keep your business model.

Tue, 01/28/2014 - 13:06 | 4375614 123dobryden
123dobryden's picture

in west, they not only can take business too, but they also can take your children, UK, Finland, Norway ...the greatest

Tue, 01/28/2014 - 11:42 | 4375206 Urban Redneck
Urban Redneck's picture

Are you implying that there us ANY country on this planet where national politicians act against their own best interests when there may be a conflict with what is in their nation's best interests?

Tue, 01/28/2014 - 12:02 | 4375312 Ghordius
Ghordius's picture

no, but this is a matter of degrees. and national interest is a matter of opinion anyway. Just ask Finland why they choose to ally with Germany during WWII

Tue, 01/28/2014 - 12:30 | 4375443 Urban Redneck
Urban Redneck's picture

Personal interest, on the other hand, is often quite quantifiable, especially when one compares the base salary of a politician and his or her relatives to the financial total financial "benefits" received by supporting a given course of action.

Tue, 01/28/2014 - 12:47 | 4375508 Ghordius
Ghordius's picture

yet I do know politicians who "do it" for... what was that word the Legalese use? ah, yes: "pro bono"

but that is our problem in all democratic setups: we ask for angelic, saintly candidates, and we get... humans. in all their variety and with all their faults

and most of us spend not more than 5 minutes a year in any kind of political activity, " 'cause it's dirty"

Tue, 01/28/2014 - 13:04 | 4375603 Urban Redneck
Urban Redneck's picture

There's a simple fix- no salary, no expenses reimbursement, and full financial disclosure for any elected politician.

Politics should be neither a full time job nor a career.

And if the clown hasn't demonstrated financial competence with their own accounts to underwrite their public service, why should they be entrusted with the public purse?

Tue, 01/28/2014 - 13:41 | 4375781 Ghordius
Ghordius's picture

oh, your proposal would piss off many of our european social democrats, who maintain that the "simple man from the street" should be eligible to a political career without having great generational wealth to live from

you expose yourself to possible criticism from the "unwashed masses". who like their candidates to be "someone I could imagine drinking a beer with"

joking aside, how does an unexperienced non-career politician get a grip on a full-time-career state employee / civil servant ? 

(just thinking about the hilarious "Yes, Minister" series)

Tue, 01/28/2014 - 15:29 | 4376384 Urban Redneck
Urban Redneck's picture

It would be hard for either the sheeple or the sheep shearers to continue to drink the Kool-Aid if there was a big turd floating in the punch bowl and they could longer lie to themselves about either the dirty nature or the money polluting the political process.

Joking aside, the non-career politician isn't (usually) inexperienced in managing "things" or getting "things" accomplished/delivered. Furthermore, why wouldn't the trial-by-fire that does work in the private sector also work in the public sector?

There were at least half a dozen times in my previous corporatist life that I walked into a big place with no real idea WTF was going on, or who was responsible for what, and I managed to take over and get control of things (since the investment bankers and consultants usually walked away before the ink was dry on their checks).

Back to joking, there was this hilarious time when one of my former employers went and bought a company that actually had a nationwide business selling and maintaining complex electrical machines (as opposed to complex paper financial products). TPTB decided that the new toy/company's headquarters, and staff, and pension expenses were no longer needed, as they would cut into TPTB's stock option slice and the added expense would also reduce the unit value of their reduced volume of options, and since there was going to another earnings call in three short months time, time was-a-wasting...

So Mr Redneck got called into the board room and told to grab and team fly out immediately to the west coast and be the "face" of the executive team and deal with any issues that arise as the wage slaves learn that they now need to look for new jobs, their severance packages aren't the golden parachutes that we talked about and which will be issued to those who fly first class on the shareholders' dime, and the most expensive per capita/GDP healthcare insurance in the world is absolutely UNaffordable to an individual wage slave when there is no company picking up the other 50-90% of the insurance policy cost.

And the kicker, before granting freedom to all the recently acquired wage slaves, and chaining the doors, and calling the real estate broker-- Mr. Redneck was supposed to figure out and document how they built, sold, serviced, and managed this nationwide network operation, because Mr. Redneck was also going to be responsible for getting the streamlined/in-shored operation up at running at corporate HQ before actually returning to corporate HQ himself, and if all of this wasn't done by the next time the CEO and Chairman had to face questions from those tiresome junior wall street anal-cysts, Mr. Redneck should just plan on not returning to corporate HQ...

Civil service reform is needed world-wide and the obstacles and complexities to legislating those changes in the first place exceed the difficulty in actually implementing them, in my (rarely humble) opinion and based on my (private sector) experience.

Tue, 01/28/2014 - 16:09 | 4376542 Ghordius
Ghordius's picture

a pleasure. it's always a pleasure to read from you. had similar experiences, I call it financial poisoning of the economy

my half-harted defenses shattered, I agree with you. worth repeating:

Civil service reform is needed world-wide

Quality - not quantity - in legislation

Tue, 01/28/2014 - 16:52 | 4376745 tip e. canoe
tip e. canoe's picture

really wish the two of you would write a joint article on the swiss political syatem: its features & flaws, and how best to design a 2.0 version adaptable to other more heterogenous cultures.

Tue, 01/28/2014 - 17:31 | 4376882 Ghordius
Ghordius's picture

Flaws? The Gnomes have 4 main languages, nearly 30 semi-sovereign states, cultures galore, full direct democracy, council-style gov, full parliamentary system with multi-party electoral system, MILITIA army, no federal police, etc. etc. No need for 2.0 "to adapt, there is practically nothing you can't just copy from them, IMO

ok, they are losing bank secrecy...

Perhaps I'll write it and UR can lead the criticism

Tue, 01/28/2014 - 18:52 | 4377193 tip e. canoe
tip e. canoe's picture

looking forward to reading both sides

Tue, 01/28/2014 - 18:20 | 4377031 Urban Redneck
Urban Redneck's picture

That would be interesting, but largely because there is so much that we actually disagree about. But that also raises an interest argument in favor of the utility and diversity of and (what at least used to be) Fight Club. The civility smooths over some differences allows for a more thorough exploration of an issue, but the whack-a-mole cage matches amplify and expose the key differences that are unresolved between participants (or ideologies). You need both. Otherwise, you wind up with the intellectual equivalent of CNBS group-think.

* * *

Free Francis Sawyer.

* * *

The amateur holocaust deniers (and Francis wasn't actually a holocaust denier) running free these days are silly, boring, in addition to factually and logically challenged, but we could really use a good laugh at the irony and a discussion of the Cheesepopes implementing the 1934 Bank (Secrecy) Law in response in Adolph Obama's own FATCA Act... And how the ignorance and systemic education failure in contemporary Switzerland has obscured knowledge and truth in an ill-conceived pursuit of political correctness and consensus... And how the greedy zionists complaining about the protections afforded all depositors under the Banking Law motivated the Cheesepopes at the SNB to do exactly what former FRB Chairman Volker didn't want central banks to do several years before he chaired the Volker Commission... Which is why Switzerland has more gold than Germany... Or heaven forbid an exploration the taboo topic of Zionist-on-Jew Crime since it's the relatively small share of Black-on-White crime that grabs all the headlines these days (or to jump head first down the rabbit hole and address the cases of zionist-on-zionist crime such the case of Kastner and countless others).

Tue, 01/28/2014 - 18:12 | 4377053 Urban Redneck
Urban Redneck's picture

Always a pleasure, just be sure convince your MEP to take you out to lunch on his expense account before actually fixing the system over there, the three-star culinary orgy is always fun and the grotesque display of the willful and wanton waste of the the workingman's tax dollars will double your resolve to see it through.

Tue, 01/28/2014 - 11:48 | 4375231 Joseff Stalin
Joseff Stalin's picture

Most Ukrainians have no knowledge of what is really going on.  At best they watch TV news.

Tue, 01/28/2014 - 12:05 | 4375330 dcj98gst
dcj98gst's picture

Uh wrong. They get most of their "news" from the internet. Only not gov run news station is channel 5 which was recently shut down (by the gov thugs). They know the real news is not on TV

Tue, 01/28/2014 - 19:40 | 4377387 Joseff Stalin
Joseff Stalin's picture

Internet use in Ukraine is 

https://www.google.com/search?q=internet+usage+in+ukraine&oq=internet+us...

33.7% of the population (2012)



Tue, 01/28/2014 - 11:18 | 4375094 TheMeatTrapper
TheMeatTrapper's picture

This country is deeply divided folks.  Let the civil war begin already.

The article is about the Ukraine - not the US. 

 

Oh, what - they are too? 

Tue, 01/28/2014 - 12:12 | 4375362 Mister Kitty
Mister Kitty's picture

Russia sucks.  On the other hand, Ukranian women are very pretty and stylish.  So my money is on Russia for the victory.  The ugly always seem to triumph.

Tue, 01/28/2014 - 10:28 | 4374848 Occident Mortal
Occident Mortal's picture

This kind of stuff is happening more often... right?

Tue, 01/28/2014 - 10:49 | 4374938 Unprepared
Unprepared's picture

no, it's just an impression due to greater media coverage. </sarc>

Tue, 01/28/2014 - 10:28 | 4374849 Ivanovich
Ivanovich's picture

Just the opening act.  Get comfy.

Tue, 01/28/2014 - 10:28 | 4374855 youngman
youngman's picture

This is a fight between the Russians..many of them live in the Ukraine..and the locals...they have smelled freedom and do not want to lose it again....

Tue, 01/28/2014 - 11:01 | 4375006 kridkrid
kridkrid's picture

Maybe. Or it could be a fight between various elite thugs fighting it out with proxy thugs. The Russian crime syndicate vs. the IMF crime syndicate. KGB vs. CIA. Or something like that... or nothing like that. But fighting for freedom by throwing themselves into the arms of the EU? Not sure how well that will turn out.

Tue, 01/28/2014 - 13:30 | 4375726 Ghordius
Ghordius's picture

nobody "throws themself into the arms of the EU". it's a damn club. of nations. the whole "catch me" notion is silly

and since below all the comments are purely dualistic in the usual black/white manner:

Poland, Lithuania and others are lobbying for the EU deal with Ukraine

Sweden and the UK are assisting (no don't ask why Britons are for enlargement and against staying in the EU, it's a British thing)

France, Italy, Germany and many others are torn between being against or just shutting up and being quite skeptical

add on top of that the US/CIA and Russia/KGB, and you have the usual multiple agendas bitching that we call our continent

Tue, 01/28/2014 - 13:48 | 4375811 fxrxexexdxoxmx
fxrxexexdxoxmx's picture

No response to the no pay for the political class post above leads to believe your constant support for the Euro has much more to do with your fucking pocket book than anything else ....talking your book and that is the only reason... it is so much better to steal from people right?

Tue, 01/28/2014 - 16:11 | 4376556 Ghordius
Ghordius's picture

am I supposed to guess why you dislike the EUR? tell me, how would europe look like without the EUR?

Tue, 01/28/2014 - 19:44 | 4377390 Joseff Stalin
Joseff Stalin's picture

KGB is now FSB. Not to be confused with FRB.

Tue, 01/28/2014 - 11:12 | 4375057 Dr. Destructo
Dr. Destructo's picture

I don't know about you, but typically I'd stay away from the E.U. after seeing what happened to Ireland and Greece, and what is happening in the U.K..

I'm sure if the Ukraine enters the E.U. they'll regret it before long.

Tue, 01/28/2014 - 11:20 | 4375101 Leaf of Tree
Leaf of Tree's picture

You people live in the "anglo news world" where the EU is about to crumble any day.

In 2001 one pound was 1.65 Euros.

In 2014 one pound is 1.14 Euros.

All that Murdoch press is bad for the brains.

Truth is, life for the average Irishman is 10 times better than the average Russian/Ukranian/Bulgarian/Romanian/Pole.

 

Tue, 01/28/2014 - 11:34 | 4375166 dcj98gst
dcj98gst's picture

Ukraine is not Greece. Greece and the PIIGS has had their problems before joining the Euro currency.  The trajedy of the Euro is the "currency" issue not free trade.

 

Ukraine is not adopting the Euro.  They are just entering a free trade agreement with open visas with Euro countries.  They will still use the Hryvnia.  In the long run this will help the systemic corruption that has plagued Ukraine.

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