Putin Gets Paid? IMF Agrees $17bn Loan To Ukraine

Tyler Durden's picture


It seems Russia won't have to wait too long for the billions that Ukraine owes it for energy supplies past, present, and future pre-billings. Bloomberg reports that:


The always-accurate staff at the IMF project a mere 5% contraction in Ukraine's economy (so that means more like 15%).


As Bloomberg reports,

International Monetary Fund staff endorsed a $17 billion loan to Ukraine to help the government pay its bills amid a projected economic contraction of 5 percent this year, according to government officials who have seen the recommendations.


The staff’s report was delivered to members of the IMF’s 24-seat board late yesterday, according to the officials, who spoke on condition of anonymity to discuss internal documents. The staff proposed an April 30 board meeting to consider the loan package, they said.


Conny Lotze, a spokeswoman for the IMF, declined to comment.


After weeks of talks with the government in Kiev, IMF staff concluded that Ukraine needs financing from the fund that’s at the higher end of the $14 billion to $18 billion range initially announced. The IMF loan will clear the way for additional aid from the European Union and other donors.

We await the small-print to see just how much is "allowed" to be spent on paying bills to Russia vs paying off interest on bonds due to Western banks...

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Wed, 04/23/2014 - 13:34 | 4687132 Caveman93
Caveman93's picture


So this is working out swimmingly well!

Workflow is:

EU Taxpayers > IMF > Ukraine > Putin = Win for Mother Russia. LULZ!

Wed, 04/23/2014 - 13:47 | 4687204 hedgeless_horseman
hedgeless_horseman's picture



...staff at the IMF project a mere 5% contraction in Ukraine's economy

Q) What do you call an economist that makes predictions?

A) Wrong.

Wed, 04/23/2014 - 13:49 | 4687220 NoDebt
NoDebt's picture

HH- I was thinking the same thing.  The whole of Crimea is GONE.  It's not even part of Ukraine any more, so whatever they produced there is already lost GDP.  Wouldn't that be at least 5% right there?

Wed, 04/23/2014 - 13:52 | 4687229 ParkAveFlasher
ParkAveFlasher's picture

I think we should we should peg the Ukranian GDP to its factored impact in the global matrix of derivatives.  Wait a sec, my dog here is chasing his tail.  Fido, stop it, Fido!  Stop it!  What a crazy dog.

Wed, 04/23/2014 - 14:21 | 4687333 SilverIsKing
SilverIsKing's picture

The collateral for this loan is Eastern Ukraine so when they default....

Wed, 04/23/2014 - 14:25 | 4687355 SafelyGraze
SafelyGraze's picture

the imf doesn't have any money to lend

so it lends magic unicorn energy-crystals 

they don't exist either

but once you agree to accept them, you support the fictions that

- they exist

- you can convert them into your own currency

- you will repay them later (as magic imf-unicorn energy-crystals, not as your own currency)

- you will find more of them to pay as interest, even though they don't exist

- no one can issue them except the imf


Wed, 04/23/2014 - 14:35 | 4687389 NoDebt
NoDebt's picture

Just like the non-marketable securities held in the Social Security "trust fund"!

Backed by nothing but the "full faith and credit of the United States Governement"  So, yeah, magic unicorn energy crystals, basically.

Wed, 04/23/2014 - 13:55 | 4687238 sushi
sushi's picture

Plus most of the heavy industry is in the Eastern Ukraine Donbass region. Since the workers are out engaged in the occupation of this and that it is unlikely productivity will be too high. And therr major markets are in Russia.

My bet is that once they obtain the $17 billion they turn around and "rent" the 101st Abn, the 1st Armoured Div and a number of other formations so they can go toe to toe with Putin. Stock up on popcorn while the stores are still open.

Wed, 04/23/2014 - 13:58 | 4687246 onewayticket2
onewayticket2's picture

$17 Billion.....peace on earth (for a while).

Wed, 04/23/2014 - 17:00 | 4687984 Unknown User
Unknown User's picture

Until they need us to borrow more, and more, and ...

Wed, 04/23/2014 - 22:21 | 4688997 EscapingProgress
EscapingProgress's picture

GDP includes gov't spending which is nearly 100% fucking waste. Why do people even mention this figure? It's meaningless.

Wed, 04/23/2014 - 13:58 | 4687247 Stoploss
Stoploss's picture

So, we're 18B into Ukraine now............

Was there anything in there for Detriot?????????????? No??

Is the Sandy shit cleaned up yet??????????  No??  International Monetary Fucktards......

Wed, 04/23/2014 - 14:25 | 4687352 furgheddubouddit
furgheddubouddit's picture

I think Russia's contribution to the IMF is something like $6 billion annually, so effectively it's just getting it's own money back. lol

And Tyler is right of course......that $17 billion isn't designed to 'help' Ukraine. It's simply yet another bailout for large banks, who hold large quantities of Ukrainian bonds which otherwise would have been defaulted on.

Wed, 04/23/2014 - 15:03 | 4687509 BoingBoing
BoingBoing's picture

Quite sick isn't it:

Western Economies -> Western Banks -> IMF -> Ukraine -> payback Western Banks

The neverending shuttle of bullshit.

Wed, 04/23/2014 - 13:57 | 4687244 gatorengineer
gatorengineer's picture

why would you think its EU taxpayers....


Look who funds 50% of the IMF, its you junior......  US Taxpayer>IMF>Putin, fixed it for you with a skin by the banksters of at least 10% at each step

Wed, 04/23/2014 - 15:55 | 4687728 Hongcha
Hongcha's picture

Buy you some OGZPY and get your money back.

Thu, 04/24/2014 - 05:27 | 4689544 tonyw
tonyw's picture

but it's only funded by printing moar dollars!


Wed, 04/23/2014 - 14:06 | 4687279 Kirk2NCC1701
Kirk2NCC1701's picture

That would explain why $20B was taken out of my bank account, thus making it a tad difficult to cover the overdraft.

Is that the shell games that they are now resorting to?

Wed, 04/23/2014 - 14:21 | 4687332 AZLagun
AZLagun's picture

Dont forget the US taxpayer in your workflow.  We do fund the lions share.

Wed, 04/23/2014 - 14:34 | 4687388 mtndds
mtndds's picture

The IMF is smoking crack if they think that $17 billion dollars will ever be paid back.   If they believe it then I have a unicorn that shits skittles for them.  Those Phuckers!

Wed, 04/23/2014 - 13:32 | 4687134 pods
pods's picture

Oh look, the IMF is going it with "help" in the form of loans.

Wonder if the Greeks can tell them how much they have been helped by these "loans?"

Turn a nation into a CF, then loan them money to extract their resources.  

And people look down on drug dealers. Pfft.


Wed, 04/23/2014 - 13:40 | 4687177 CrashisOptimistic
CrashisOptimistic's picture

This is why talk of military this and that is silly.

Why would the Russians want to go military when they are draining $500 Billion per year from their enemies by selling them something that they burn immediately on receipt?

They are winning and winning big.  Why change the process?

Wed, 04/23/2014 - 13:59 | 4687218 prains
prains's picture

Only the American Oligarchs and their NeoCon paid for stooges want WOAR 3.0, but there's ONE criteria;


It must be started by someone else and appear that the uSSA/nSSA is being drawn into it reluctuantly, to save the children....

Wed, 04/23/2014 - 13:50 | 4687224 centerline
centerline's picture

Putin knew he had the upper hand from the get-go.  Either way he wins.  Watch him take the money and then Ukraine.


Wed, 04/23/2014 - 13:58 | 4687249 CrashisOptimistic
CrashisOptimistic's picture

And then default.

Wed, 04/23/2014 - 14:13 | 4687301 Kirk2NCC1701
Kirk2NCC1701's picture

Is this the same IMF that is issuing SDRs?  The SDRs that has only Western content in its currency basket?


Note that the GBP has a bigger weighting than the Japanese.  Must be due to the awesome economic power that is the UK.  LOL.

IMF = I... Mo..er Fu..ers

Wed, 04/23/2014 - 14:26 | 4687360 dracos_ghost
dracos_ghost's picture

And they call it democracy


Dirty MF.

Takes everything that it can get.

Always making certain their is one thing left.

Keep them on the hook with insupportable debt"



Wed, 04/23/2014 - 13:33 | 4687137 buzzsaw99
buzzsaw99's picture

well hell you had to know the imf would get involved at some point

Wed, 04/23/2014 - 13:34 | 4687145 astoriajoe
astoriajoe's picture

I wonder what Lagarde plans to knock down so she can build her new villa there.

Wed, 04/23/2014 - 13:35 | 4687148 jmcadg
jmcadg's picture

And the money for the loan comes from ...!

I feel for the Ukrainian people. They are fucked.

Wed, 04/23/2014 - 13:42 | 4687187 CrashisOptimistic
CrashisOptimistic's picture


The money will flow.  Gazprom will get paid.

THEN the government will be overthrown, go pro Russia and DEFAULT.

Russia will subsidize the default ongoing, because they got the $17B first.

Wed, 04/23/2014 - 13:37 | 4687156 socalbeach
socalbeach's picture

In case you were wondering how the Obama admin came up with the harebrained idea to sanction various Putin associates, I think we found an answer.  If the Obama officials weren't such buffoons they could actually be dangerous. Actually they are dangerous but they might be more dangerous if they knew what they were doing.



'Rarely is it possible to find a history professor’s work on Russia to be self-evidently what it isn’t – and yet to find its premise locked by high-ranking US Government officials into a state policy of Kremlin attack and Russian regime change. J. Arch Getty III is a professor at the University of California at Los Angeles. His new book ...is called Practicing Stalinism, Bolsheviks, Boyars and the Persistence of Tradition...

Getty’s premise is that “for ten centuries in Russia, princes, tsars, general secretaries, and presidents have each surrounded themselves with an inner circle, a clan, a druzhina to help them govern... In Getty’s version of Russian history, history doesn’t matter very much, because in a sentence he repeats many times over, Russia has always been ruled this way. There isn’t much recognizable evidence on Getty’s way to this conclusion...

Getty recommends the way to understand the past fourteen years of Putin’s rule is by quoting an English professor at Harvard, who wrote thirty years ago: “government was conspiratorial: clans conspired against one another to expand their power. One does not reveal to non-participants authentic information concerning politics, political groupings, or points of discord.”...

That Getty’s premise is more serious, not for its veracity but for its gullibility, is evident from the way in which senior Obama Administration officials appear to believe that if they can strike at the clan and client relationships which keep Putin in command at the Kremlin, they will be able to trigger something like a Time of Troubles ...

For Getty “the clan structure of the Russian government today bears a remarkable resemblance to those of the past… power in Russia from time immemorial has been about proximity to a powerful person and had little to do with one’s official title.” So the US sanctions must be aiming to break the chain of proximity – unhappy clients, failing clientelism — and thereby trump Putin’s power at the centre...

... the Getty acolytes in Washington ... composed this list of targets for the second round of US Government sanctions, announced on March 20. ... The text of this sanctions notice is unusual for what it alleges against the Russian targets – not for war crimes, nor administrative orders, nor corruption, nor even for political acts. Rather, this lot of Russians are the targets of US attack because they belong to what the US Treasury has cribbed from Getty’s book – a family, a clan, a client-patron circle, an oligarchy, a tsarist court...'

Wed, 04/23/2014 - 14:01 | 4687261 sushi
sushi's picture

Tou can tell the Russian clans apart by the tartans used in their kilts.

Wed, 04/23/2014 - 19:12 | 4688408 Wahooo
Wahooo's picture

First of all you can generalize the clan to clan construction for just about any country including and especially ours. We should assume also that Putin will pitch American business and interests against the Chicago clan. But enough of the clan crap, Russia does not appear to be a house divided as is America. Obama's clan is in disarray.

Wed, 04/23/2014 - 13:38 | 4687167 savedeposit
savedeposit's picture

So the IMF will print some confetti and the Ukrs give it to putin ?

I hope he is happy

Wed, 04/23/2014 - 13:40 | 4687174 dogbreath
dogbreath's picture

The IMF has it wrong, Russia wants to be paid in gold, or will.  Fasten seatbelts.

Wed, 04/23/2014 - 13:46 | 4687207 pods
pods's picture

They can take the confetti and buy physical.

Everyone knows when you buy a ton of physical the price drops.


Wed, 04/23/2014 - 13:56 | 4687241 centerline
centerline's picture

with the international capital flows as what they are... strengthening the US$, the timing is impecable.

Wed, 04/23/2014 - 13:49 | 4687215 BanksterSlayer
BanksterSlayer's picture

Yes, either way, Putin will get paid in gold. If the IMF pays him in USD, he will just cash it in and convert to gold as long as the paper gold price continues to be suppressed.

Wed, 04/23/2014 - 13:58 | 4687250 Winston Churchill
Winston Churchill's picture

From my reading, gold is the only thing the IMF can pay Putin with.They have no cash right now, that's what the BRICS are pissed about.The IMF is broke.

Wed, 04/23/2014 - 14:03 | 4687267 sushi
sushi's picture

The IMF is broke?

If true then I suspect they will declare force majure and demand Russia pay a levy three times its usual.

Wed, 04/23/2014 - 14:28 | 4687365 Winston Churchill
Winston Churchill's picture

The money they have is subject to the IMF reform
package being adopted.The BRICS have all chipped in on that basis and the IMF has to get permission from them before its use.The US by obstructing the reforms, cancelling their veto(
and money), has given the BRICS a veto.
Maybe a Ukrainian standoff situation developing.

Wed, 04/23/2014 - 14:40 | 4687411 dogbreath
dogbreath's picture

why should it be russia's problem post delivery to source the gold when that action drives up the price of gold after the gas has been delivered and consumed.  just saying.  Russia could currently  do that or any country with a surplus but they don't,   why?   So when push goes to shove with sanctions,   russia says " fine,  well take ayment in gold settled at london close friday average wekly price in dollars converted to gold",   Da .    Scarey.

Wed, 04/23/2014 - 13:40 | 4687182 ross81
ross81's picture

Let the blood sucking commence!

Wed, 04/23/2014 - 13:45 | 4687195 daveO
daveO's picture

Ukraine's new motto, 'Free at last, free at last, thank god almighty we're free at last!'.

Wed, 04/23/2014 - 13:42 | 4687188 hotrod
hotrod's picture

So when they default does that mean IMF stake holders get to invade? Bet that contract is loaded with, just pass it to find out what's in it.


Wed, 04/23/2014 - 13:47 | 4687199 KickIce
KickIce's picture

IMF = Janet hitting CNTL-P.  Some athletes insure parts of their body, I wonder if Janet has her fingers insured.  PM prices should drop as well.

Wed, 04/23/2014 - 13:48 | 4687214 Mad_max
Mad_max's picture

When is ZeroHedge going to pick this up - > http://www.theguardian.com/business/2014/apr/22/greece-social-dividends-...


10 April Greece raises 3 Billion euros on the bond market.

22 April Greece anounces a 2.5 Billion euro "budget surplus" to be distributed as "social dividends".


outright bribery before the euro election in May? really? and they have the nerve to criticise the elections in Syria?

Thu, 04/24/2014 - 05:32 | 4689549 tonyw
tonyw's picture

Bribing you with your own money, that's what all politicians do worldwide, it's not just American exceptionalism.

Take it with one hand then distribute it with the other hand.

Wed, 04/23/2014 - 13:49 | 4687222 Seasmoke
Seasmoke's picture

Israel must be involved someway, somehow in the skimming on this $17B.

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