• Steve H. Hanke
    05/04/2016 - 08:00
    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

US Pays Half Of Gazprom's Overdue Invoice With $1 Billion Ukraine Loan Guarantee

Tyler Durden's picture




 

With Ukraine no longer paying for Russian gaz, and with Gazprom making it clear Kiev has to a) first pay the overdue $2+ billion in invoice and then b) prepay some $5 billion in gas until the end of the year of Europe gets it, it was only a matter of time before the US Treasury stepped in and paid off part or all of Gazprom's demands. That time is now, when moments ago Jack Lew announced a $1 billion loan guarantee for Ukraine - very much the same way that the US provided billions in loan guarnatees for the now long overthrown Mursi regime in Egypt. And in other news, many more "costly" and "damaging" US sanctions are surely headed Russia's way any second now.

From the Treasury:

Treasury Secretary Lew Announces Signing Of $1 Billion U.S. Loan Guarantee Agreement For Ukraine

 

WASHINGTON – Today, the U.S. Treasury Secretary Jacob J. Lew announced the signing of a $1 billion loan guarantee agreement for Ukraine.  This guarantee, when completed, will complement the Government of Ukraine's International Monetary Fund (IMF) reform program and underscores the United States' commitment to Ukraine.

 

"The Ukrainian people have demonstrated tremendous courage as they have charted an independent course for their country and demanded a government that truly reflects the will of the people.  The United States has been at the forefront of building international support for Ukraine, and holding Russia accountable for its violation of Ukrainian sovereignty and destabilizing action," said Secretary Lew in his remarks at the U.S. Treasury Department today.  "I would like to congratulate Minister Shlapak on the progress he and his team have made in putting in place a comprehensive economic reform program together with the IMF.  The United States very much wants to see Ukraine prosper, and we will continue to stand with the Ukrainian people as they move forward to realize their long-held aspirations."

 

The $1 billion loan guarantee is part of a U.S. bilateral assistance package that also includes technical assistance to help Ukraine return to a path of economic recovery.  This loan guarantee will bolster the Government of Ukraine's ability to provide critical services as it implements reforms, while protecting the most vulnerable Ukrainian households from the impact of the necessary economic adjustment. 

 

Secretary Lew and Ukrainian Finance Minister Oleksandr Shlapak held a bilateral meeting before today's announcement to discuss the ongoing situation in Ukraine and Ukraine's progress on its economic reform plan.

 

The United States will continue to urge its international partners to take immediate steps to bolster the IMF assistance package and move forward with bilateral aid and technical assistance. 

And the inevitable photo op:

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Mon, 04/14/2014 - 10:25 | 4656663 intric8
intric8's picture

WHAT??? WHY?

Mon, 04/14/2014 - 10:26 | 4656670 ParkAveFlasher
ParkAveFlasher's picture

Because Putin.

Mon, 04/14/2014 - 10:27 | 4656678 Timmay
Timmay's picture

We are borrowing to pay another nation's bills now.

 

Full Retard alert.

Mon, 04/14/2014 - 10:29 | 4656687 Haus-Targaryen
Haus-Targaryen's picture

Its NBD guys,

Of that $1 Billion we just gave away, $390 million is borrowed, of which about $200 million of it is printed. But hey, we're good for it right!?

Mon, 04/14/2014 - 10:30 | 4656690 Pladizow
Pladizow's picture

Shit, now we only have one day to figure out where this line item goes on our tax returns!

Mon, 04/14/2014 - 10:32 | 4656704 Manthong
Manthong's picture

Just a good thing it is all backed by gold at the Fed.

Mon, 04/14/2014 - 10:44 | 4656751 max2205
max2205's picture

Fuck me...pay my gas bill too Lew

Mon, 04/14/2014 - 10:47 | 4656768 Gaius Frakkin' ...
Gaius Frakkin' Baltar's picture

You can thank the Tea Party.

Mon, 04/14/2014 - 10:50 | 4656779 Manthong
Manthong's picture

If Vlad had any hair on his nuts (I think he uses LiLo’s waxer) he would have the Gaz company demand payment in Yuan.

Mon, 04/14/2014 - 10:59 | 4656829 CheapBastard
CheapBastard's picture

Makes me feek warm and fuzzy that we can help out them out....I'll just work a few hours harder...longer for the privilege.

Mon, 04/14/2014 - 11:16 | 4656863 eurogold
eurogold's picture

Why ???? Maybe because the U.S. had to instigate.....you know,  the overthrow, if you can remember that far back ???

Mon, 04/14/2014 - 11:22 | 4656918 strannick
strannick's picture

When you rule with the endlessly printable reserve currency, you make these payments by decree. A billion here, a billion there, you are never talking about real money.

Mon, 04/14/2014 - 12:09 | 4657155 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

I pay for everyone else in the world. Why should I expect anything different? Euromaiden, you are NOT welcome!

Mon, 04/14/2014 - 12:11 | 4657170 StacksOnStacks
StacksOnStacks's picture

What could go wrong?

Mon, 04/14/2014 - 21:09 | 4659071 MontgomeryScott
MontgomeryScott's picture

Well, you had to ask...

The guys in the picture fail to check out by 9 A.M. tomorrow (like it says in the paper posted to the left of the picture).

 

 The price of the room will need to be paid for another day (it looks like it's a cool $Billion).

Tue, 04/15/2014 - 01:44 | 4659699 Scarlett
Scarlett's picture

Now Vlad can kill our troops with our "money". 

Mon, 04/14/2014 - 11:07 | 4656868 Troll Magnet
Troll Magnet's picture

That's the spirit! Good Goy!

Mon, 04/14/2014 - 11:13 | 4656888 eurogold
eurogold's picture

Be happy Putin still accepts confetti ......Sorry I meant FIAT

Mon, 04/14/2014 - 11:27 | 4656963 eddiebe
eddiebe's picture

Patience grasshopper!

Mon, 04/14/2014 - 12:15 | 4657189 ParkAveFlasher
ParkAveFlasher's picture

Really, the hot shots are the first ones that get weeded out.

Mon, 04/14/2014 - 11:01 | 4656842 Overfed
Overfed's picture

That's the most non-sequitor comment I think I've ever seen.

Mon, 04/14/2014 - 11:07 | 4656866 TheMeatTrapper
TheMeatTrapper's picture

I know. That little homo has a deep seated hard on for the Tea Party for some reason. 

Mon, 04/14/2014 - 11:34 | 4656986 Troll Magnet
Troll Magnet's picture

Pay no attention to parasitic libtards.

Mon, 04/14/2014 - 12:21 | 4657213 Nehweh Gahnin
Nehweh Gahnin's picture

Hah!  "Deep seated hard on..."  That's a mixed metaphor I'll have to remember.

Mon, 04/14/2014 - 11:16 | 4656901 Gaius Frakkin' ...
Gaius Frakkin' Baltar's picture

Yeah, Tea Party politicians voting on a bill which allows this to happen is irrelevant... it's crazy talk. I know, I know, the Tea Party can be anything you want it to be... but one thing is certain. If a Tea Party candidate gets elected, they become a Republican, if not, they remain a Tea Party candidate.

Mon, 04/14/2014 - 11:17 | 4656909 TheMeatTrapper
TheMeatTrapper's picture

Exactly which Tea Party members voted on the bill to allow this to happen, and exactly which bill was it? You need to put up or shut up. 

Mon, 04/14/2014 - 11:18 | 4656914 Gaius Frakkin' ...
Gaius Frakkin' Baltar's picture

Exactly.

Mon, 04/14/2014 - 11:23 | 4656941 TheMeatTrapper
TheMeatTrapper's picture

Exactly what? Having trouble answering a simple question? 

Mon, 04/14/2014 - 11:31 | 4656975 Gaius Frakkin' ...
Gaius Frakkin' Baltar's picture

This may come as a surprise to you, but the House and Senate have been passing bills in support of the unelected Fascist Ukrainian government. That is easy to understand, if you're not a dumb-ass. What's difficult to understand, is who is really Tea Party (if any) and who merely hides behind the banner during election time.

Mon, 04/14/2014 - 12:03 | 4657127 TheMeatTrapper
TheMeatTrapper's picture

I asked you to name a specific bill, and the Tea Party members who voted for that bill that authorized this loan guarantee. 

It's obvious that you can't do it because you are talking out of your fucking ass, which is all you seem to do. If you are going to shoot your fucking mouth off you need to be ready to step up and back your bullshit up with facts.

I'll say it again - which bill and which Tea Party member authorized this action?

Mon, 04/14/2014 - 12:22 | 4657218 Gaius Frakkin' ...
Gaius Frakkin' Baltar's picture

I'm not going to provide a hyperlink for your lazy ass. It's time to grow up and be an adult. Hopefully you don't vote with so little information.

Mon, 04/14/2014 - 12:48 | 4657317 Gaius Frakkin' ...
Gaius Frakkin' Baltar's picture

Here you go lazy ass:
https://www.govtrack.us/congress/votes/113-2014/h114

So are we to believe a mere 23 Congressmen are "real" Tea Party members when so many House Republicans ran under the banner in 2010 and 2012?

This is why claiming to be two things at once (Tea Party and Republican Party), while simultaneously claiming they are antithetical to one another is generally a bad idea, unless your ultimate goal is to discredit one, the other, or both.

Mon, 04/14/2014 - 16:41 | 4658188 chemystical
chemystical's picture

My comment is a little late to this party, but

More than half of the Nay votes came from members of the Tea Party Caucus.  More than 75% came from TPC members or those endorsed by "the" TP.

TPC members comprise only 20.6% of the (R) House members.

TPC members were over-represented amongst the Nay votes by 280% and by TP endorsed candiates by about 380%.

I'd say that tends to refute your thesis. 

Nice try, and no parting gifts for you

 

Mon, 04/14/2014 - 12:47 | 4657318 Grinder74
Grinder74's picture

It's spelled TEA.  It's an acronym, not a political party.  Get a life.

Mon, 04/14/2014 - 10:46 | 4656757 AlaricBalth
AlaricBalth's picture

Putin addressed the issue of loan guarantees 3 days ago.

Washington's offer to provide $1 billion in loan guarantees to help Ukraine is worthless as there are no banks willing to finance the recovery of crisis-hit country, President Vladimir Putin said Friday. Putin called Washington's negative response to his letter addressed to European leaders, which contains proposals on how to solve the Ukrainian crisis, "a bit strange" as the United States was able so far only to offer guarantees rather than actual loans.

"What are these guarantees to the banks that would be ready to issue loans, but there are no such banks, which means there is no aid," Putin said at a meeting with members of Russia's Security Council. "We are seriously concerned about this," he added.

Mon, 04/14/2014 - 10:59 | 4656827 crazzziecanuck
crazzziecanuck's picture

Oh, plenty of banks will line up for this given that it's more free money from the US taxpayer.  It's a loan guarantee so if Ukraine refuses to pay, the US government steps in and pays it.  No risk to any lender here.  The question becomes how much usury is going to be extracted?

Mon, 04/14/2014 - 10:52 | 4656789 Chief_Illiniwek
Chief_Illiniwek's picture

"It was paper yesterday and it's still paper today" - Sam Walton after '87 crash.

Mon, 04/14/2014 - 11:42 | 4657021 BanksterSlayer
BanksterSlayer's picture

and now we know why Ukraine shipped all of its gold gold reserves to New York last month.

Mon, 04/14/2014 - 15:58 | 4657969 Monty Burns
Monty Burns's picture

Just a good thing it is all backed by gold at the Fed.

Of which about $6 billion belongs to Ukraine.

Mon, 04/14/2014 - 10:33 | 4656705 SumTing Wong
SumTing Wong's picture

Putin is playing chess, while the US and EU are playing tiddlywinks. Hell, it looks like Obama is playing with himself. (And who can blame him when you look at the Wookkie? I know, I know, there is always Reggie Love...)

Do we even put up a score? Is it like Putin 11, The West -3 ???

Mon, 04/14/2014 - 10:35 | 4656715 pods
pods's picture

Denver Bronco foreign policy.

pods

Mon, 04/14/2014 - 10:40 | 4656731 Tengri Temujin
Tengri Temujin's picture

Meanwhile in Detroit thousands are having their water turned off because they couldn't pay their bills.  But we are paying the gas bills for down and out Ukrainians half the world away, because why?  Because they are white and because the poor in Detroit are mostly black.  I guess white people just can't have their utilities turned off, God forbid.

Mon, 04/14/2014 - 10:45 | 4656741 HardlyZero
HardlyZero's picture

Was there any Gold in that package ?  Even 1 ozt. would be game changing.

Mon, 04/14/2014 - 10:51 | 4656785 MansaMusa
MansaMusa's picture

Ukraine has no gold.  Wasn't it airlifted in the middle of night to the US vaults for recasting, I meant safe keeping?

Mon, 04/14/2014 - 11:02 | 4656851 Haus-Targaryen
Haus-Targaryen's picture

I thought it was sent to Frankfurt.

Mon, 04/14/2014 - 11:44 | 4657024 BanksterSlayer
BanksterSlayer's picture

Frankfurt or London or New York City ... same bankster scum, different GPS locations.

Mon, 04/14/2014 - 10:42 | 4656743 SumTing Wong
SumTing Wong's picture

Hell, aren't we spending enough money trying to kill a lot of brown people throughout the Middle East and on over towards the Far East? What do you want from us? 

(I'm in complete agreement with you on this, even as a pasty white boy.)

Mon, 04/14/2014 - 11:41 | 4657007 fockuyu
fockuyu's picture

SumTing? SumTing?!? This your cousin, Fockuyu! Whaa you mean you da white boy?!?!

Mon, 04/14/2014 - 10:42 | 4656745 Headbanger
Headbanger's picture

IT'S FUCKING BLACKMAIL!

Putin and his boyz are ROFLTFAO at Obama the Pussy in Chief!

Horrible.

Resign now Obama you loserrrrr!

Mon, 04/14/2014 - 10:45 | 4656754 Buckaroo Banzai
Buckaroo Banzai's picture

Yeah, too bad Detroit's water company doesn't have nuclear weapons. If they had we probably would have paid them off too.

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