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Ukraine Currency Plunges Over 30% After Central Bank Gives Up On Indicative Rate
It had been a while since a member of the US state department had visited ground zero of its second most disastrous intervention in the past year (the first being the embarrassment that is ISIS) namely Kiev, Ukraine, the same place where precisely a year ago US assistant SecState Victoria Nuland was recorded in a hacked conversation saying to "Fuck the EU", and revealed as the mastermind behind the violent Ukraine coup. Which is perhaps why today US Secretary of State John Kerry arrived in Kiev on Thursday "in a signal of firm US support for the country amid growing international alarm at a surge in fighting."
In addition to whispering words of support to the local government, whose army has been on the defensive in past weeks in east Ukraine having lost several key outpusts, Kerry also unveiled $16 million in fresh US humanitarian aid.
And yet one can't help but wonder if the true purpose of Kerry's visit was something totally different, because just as the US Secretary of State was landing in Kiev, the Ukraine central bank finally conceded defeat and announced it will not only raise its key discount rate by 5.5 percentage points to 19.5% effective Friday, but effectively return to a float of the local, Hryvnia, currency. The central bank scrapped the hryvnia’s indicative rate and canceled daily currency auctions. Ukraine will retain some administrative measures, including mandatory sales of foreign revenue for exporters and restrictions on individual currency purchases, according to Governor Valeriya Gontareva.
The reason for the surprise move, which partially ends Ukraine effective capital controls resulting from the economic crisis which had included restricting individuals’ FX purchases and maintaining a requirement for exporters to convert their overseas revenue into hryvnia, is the collapse in central banks reserves. As Bloomberg reports, "the monetary authority also spent almost $1 billion of its foreign reserves to support the currency before October’s parliamentary election. As the government repays foreign debt and finances natural gas imports from Russia, reserves have sunk more than 76 percent since 2012 to $7.55 billion." And with reserves so low they can only cover at most a few weeks of imports, the central bank had no choice but to follow in the steps of the SNB and permit the forces of market supply and demand take their toll.
Toll, which as the chart below shows, has sent the Hryvnia plunging by about 35% following the announcement, and in the process pushing local prices of imported (and soon all other goods), higher by the same amount.
Not helping were comments by the local central bank head who said the "currency market is still dominated by a panic mood," according to Governor Valeriya Gontareva who spoke to reporters in Kiev on Thursday, adding that Ukraine’s economy was torn by "multiple hryvnia rates."
Well, now it will be torn by another bout of hyperinflation, which may well turn into all out economic collapse as the nation runs out of money unless the IMF bails it out: Ukraine hopes to conclude talks with the IMF within days over expanding its $17 billion bailout, Jaresko said Feb. 3. said.
Then again, the IMF may find it has its hands full with bailing out that other insolvent basket case, Greece, one which just so happens is actually a member of the European "Union."
As for any further US help, and the reason why the central bank had to abdicate its duty, well Ukraine's gold is long gone, so the western powers may have no further need to keep the financial stability in the country that is now a war-torn shell courtesy of its being the latest proxy pawn in the US global geopolitical chess game.
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Let'em eat chocolate !
Heil Chocolate King !
This might be an opportune time for Russia to demand payment of the $3 Billion from Ukraine resulting from the defaulted loans?
The black market rate was already 40% lower than the so called official (aka american tourist sucker) rate. The official rate is merely catching up to reality, althrough it has much farther to fall.
Another one bites the dust.
Is that roasted Porkyshenko stinking up the air, the smell of another Kiev coup coming....hmmmm
Doesn't matter for US, UK. Objective was to destroy Ukraine, goal is to weaken Russia. Ukraine is now on the shitheap of history, irreversibly. It starts to dawn even on those Ukrainians, finally, who protested against Yanukovich.
Well at least they have their gold reserves.. you know for tradition,, in case something bad happens..
Oh, wait….. did somebody say long gone?
and here I was thinking that Nazi's were pretty good at keeping their gold.
The currencies issued by the freedom fighters in East Ukraine is more stable than the Ukraine Dollar, lol.
The Ukies were probably banking on having this resolved before they burned through their gold/reserves. Oops.
I give it 2 months before the current Ukie gov't is overthown by the angry locals. Promising a united Ukraine and giving them hyperinflation instead? That's... not going to work.
30% devaluation! See! Sanctions against Russia are working!
Oh! ... you mean you're not talking about Russia, but our staunch allies, Ukraine?
Erm...
Wow! Look what our support for a valiant Uke allies has done - introduced much needed, growth-inducing inflation! Watch their exports soar and the economy boom! Abe & Draghi eat your hearts out!
Oh no, wait... that's ISIS that eats hearts.
*confused*
Even worse than being America's enemy, is to be America's Friend.
What are the Central Bankers buying with all their counterfeit currency before they are booted out?
Mail order brides.
Them Ukes got some pretty hot looking litle Nazi girls..and they have chutpza.
LL - how can a tourist take advantage of that? I'd typically just go to an ATM to get cash while traveling. I've never noticed any kind of money exchange houses that would seem to be necessary to get a better rate. Did you just bring a bunch of USD with you while traveling there?
time for Russia to demand payment of the $3 Billion from Ukraine
That will have to be in paper....cause the gold is gone.
And china for its 3 billiion dollars of pre paid grain too.
Tweet from Vlad to Barry and Vicky:
You wanted it. It's yours. Enjoy.....
And from Bush to Obama,
"You break it, you bought it."
That seems to be the core of U.S. foreign policy.
Sounds like Kerry instructed the Ukrainian central banksters to stop wasting money trying to support the insupporable. Besides, I wonder what proportion of the so called Ukraine reserves are real, and not just painted rocks.
No, it sounds like Kerry told them no help would be coming from their staunch ally who created all this mess. At that point they realized they had to give up.
Reality check:
My mother in law Skyped this morning that basic food stuffs like rice, milk etc. went up 300%.
Hmmm... a country run by Jewish-Ukrainian oligarchs has currency devalued by 30% or so.
Time to increase basic foodstuffs that are relatively immune to currency valuations by 300%.
The favorite two pastimes of oligarchs are screwing the poorest, most vulnerable Ukrainians out of every last dime... and then killing them and looting their property.
It's been going on for a few hundred years, over and over again. No wonder they're looking to the Nazis (or worse yet: the Americans) for salvation.
I'm a 4th year political science student. In a tutorial a while ago people were STUNNED when I said we'd see the disintegration of the EU within our lifetime. Wonder what they would have said if I had said within the decade.
Martin armstrong suggest much sooner
2017.3754585?
Last I heard it was 2017.3764585. Which is a Tuesday (lunchtime).
+ 1 to infinaty
try "in the course of 2015"...
So Dow @ 20000, your namesake, when?
decade, lifetime? Days maybe...but this shitshow can go on forever, just keep printing money boys! Who cares if you have to buy bread for $10,000?
So, Ukraine needs money. It is simply amazing how many complex problems money can solve.
sucks to be Austria. sad part is that they remember being rich. selling stuff East is their only business, besides snow.
Wrong. We still have Mozarts balls and we continue selling them to the Japanese.
Amazing in this 'civil war' that nobody has yet blown up a gas pipeline in Ukraine.
There is no reason for 'blowing up' a gas pipeline for either side:
Ukranian nationalists won't blow up a pipeline as they need the energy.
The Russian backed rebels/freedom fighters won't blow up the pipelines as they need the revenue from the pipelines.
The pipeline is the winner's prize.....only reason to blow it up is when you know all is lost. Remember Kuwait?
2015 - the year both sides decide to start blowing up pipelines!
Wow.
I'd love to know who "traded" USDUAH...
I'll bet Soros is very, very angry. He's been calling for the EU/IMF/USA/everyone on the planet to bailout Ukraine... no doubt because he's bought a shitload of their bonds.
God I hope the old reptile slipped up and had no currency hedge in place.
Be of good cheer, SSS aka Sack of Shit Soros will find another way to soak taxpayers to make up his losses.
The French president and the German chancellor are set to visit Moscow on Friday after a trip to Kiev, in order to find a peaceful solution to the escalating violence in Ukraine
http://rt.com/news/229563-hollande-merkel-ukraine-peace/
Ukrainian hryvnia in free fall after Central Bank said it can no longer support currency
http://rt.com/business/229607-ukraine-hryvnia-free-fall/
Their solution, of course, is to supply deadly weapons to the fascists. NATO 155 mm howitzer artillery rounds are already falling on civilian areas of eastern Ukraine cities. The neo-Nazis can't beat the anti-fascist resistence, so they murder civilians, as the Nazis did in France and elsewhere.
They know what a peaceful solution would require.
1. The unconditional surrender of Ukrainian forces.
2. The international recognition of the Donetsk and Luhansk People's Republics, and the withdrawal of Ukrainian troops from their territory.
3. The recognition of Crimea's re-joining the Russian Federation.
4. The transfer of the criminals styling themselves Ukraine's government to the Hague to stand trial for crimes against humanity.
5. Until order can be restored and free and fair elections held without Western interference, all powers of government in Ukraine to be transferred to the armed forces of the Russian Federation.
6. All Kiev's debts to all but nationals of Ukraine and Russia to be repudiated.
7. Reparations in double the amount of any estimated war damage to be rebated directly as cash grants to the peoples of the Donetsk and Luhansk People's Republic, to be disposed of as individuals see fit. Funding for such reparations may include confiscation of assets in Ukraine held by nationals of countries other than Ukraine or Russia.
8. All branches of Ukrainian banks not wholly owned by Ukrainian and Russian nationals to be nationalized effective immediately. No compensation will be offered to shareholders. Until further notice withdrawals of more than a trivial amount will not be authorized without an explanation of the sources of the funds acceptable to Russian military authorities. At an appropriate time, banks to be re-sold to Ukrainian or Russian investors on condition they do not sell any of their shares to nationals of third countries for a hundred years.
I wish, Niall. But the simplicity of your suggestions is actually one of the reasons the U.S. completely fucked up Ukraine - it's waaaay more complicated than that.
"...1. The unconditional surrender of Ukrainian forces..."
You can arrange surrender of the Ukraine army, but they're about as effective a 'force' as the post office. It's all incompetent lifers and poor conscripts. What about the private oligarch militias and punisher battalions? What about Blackwater/Xe/Academi/Vehicle Services serial killers or their Greystone assassins? What about Polish and Chechen mercenaries? Plenty of U.S. SF-type 'trainers' and 'advisers' running around there, too. And notice I didn't even start with the interior ministry's army (basically, their DHS) that protects the government and shoots protesters and draft dodgers. The CIA-renamed Svaboda and the Right Sector Nazis don't take orders from 'the Ukraine government'. Then there's Kolomoisky - the self-appointed Emperor of South Ukraine. He doesn't take orders from Kiev either.
The problem of the U.S. naively booting out that bitch (but lawfully elected) Yanukovych is that every psychopath in Ukraine stepped in to fill the vacuum. So negotiating a withdrawal of forces means negotiating with several sometimes competing, sometimes overlapping forces and their psychopathic leaders in addition to the Ukraine military. In a word: impossible.
"...2. The international recognition of the Donetsk and Luhansk People's Republics, and the withdrawal of Ukrainian troops from their territory..."
Recognition would mean that people can vote themselves and their territory out of a country if they want. I wholehartedly agree, but do you think the U.S. would permit that in the Ukraine? First Donbass, then Texas. Nope - such 'democracy' will never be allowed by the Western powers. You are the property and subject of your country.
Finances? So Ukraine can stop paying pensions to the retired population there because now the Donetsk and Luhansk Republics are responsible? Do those republics get to leave their pieces of the massive Ukraine debt to Kiev? With Crimea, that would mean Kiev loses 20% of it's taxpayers but is still on the hook for 100% of the national debt? Who fixes the roads, keeps the water running and the lights turned on? Both those 'republics' have little more structure than a collection of mayors.
"...3. The recognition of Crimea's re-joining the Russian Federation..."
Yeah... um, that's kind of what the war is about according to the U.S. And unless it hasn't been made clear, every criminal oligarch and corrupt Ukraine government official for the last couple of decades has a nice little dacha (with a lot of land) in Crimea for vacation. Kolomoisky bought a whole city there. So you're asking the most wealthy, powerful and corrupt people in Ukraine to just forget about their 'investments' in Crimea? They stole the money from the Ukraine people fair and square - those dachas are theirs!
"...4. The transfer of the criminals styling themselves Ukraine's government to the Hague to stand trial for crimes against humanity..."
Would that be Tymoshenko's government, Yanukovych's government, the current CIA-Nuland/Porky/Yats Frankenstein of a government, or Kolomoisky's cronies running his unofficial kindgom of South Ukraine? The Hauge is going to need some extra housing and a bullet train from Kiev.
"...5. Until order can be restored and free and fair elections held without Western interference, all powers of government in Ukraine to be transferred to the armed forces of the Russian Federation..."
Putin is not at war with Ukraine and does not want to annex the Donbass. He has no intention and no obligation to clean up the U.S.'s latest fiasco for them. He objects to the ethnic cleansing in the Donbass, not to the existence of Ukraine as a nation.
"...6. All Kiev's debts to all but nationals of Ukraine and Russia to be repudiated..."
That's all it takes to get out of debt? Hell, maybe the U.S. will encourage Texas to secede. That would save the banks a few bucks. Oh, wait...
"...7. Reparations in double the amount of any estimated war damage..."
There's that whole "What part of the Ukraine national debt does Donetsk and Luhansk owe?" question.
There are no easy answers in Ukraine and any solution is going to leave several pissed off but well-armed groups roaming around the country looking for another chance to seize the reigns of power. Which is always the outcome the U.S. ends up with when it attempts to bring it's twisted brand of freedom and democracy ANYWHERE. I offer as evidence: the last five decades of failures.
Unbelievable ... just paid for 1 month rent on city apartment yesterday :( could have saved 30% if I had just got sidetracked or forgot for a day. Spending money will go a lot further so not all bad news.
Poor plebs living surviving there were already doing it tough ... being collateral damage sure would suck. Then again if I lived there my savings would have at least been in Euros if not USD or Gold by now. Ignorance is no excuse as they say.
What the fuck are you talking about?
Brown acid......should be OK.
Window Pane
Orange barrel
Something very simple .... 20,000 UAH would have cost 30% less USD if paid after the devaluation as opposed to before it. Just having a moan about my less than fortuitous timing - move along.
I have an even better suggestion, get the heck out of Dodge before the Ukraine completely implodes and turns into Rwanda.
Where did you rent an apartment? Not in Kiev, I hope.
They Still have a Currency ? wow I'm Impressed...
Gold just rose 30% in local currency.
Israel needs to be forced to tie their currency to the value of a pool of currencies of the countries they are currently arse raping. That may stop this shit faster than we could imagine.
Their real currency is the Dollar. Obama is their servant.
In other words, even Wall Street have figured out Ukraine's liberation is only a matter of time. Let's hope the Russians don't stop in Kiev.
They could keep plowing through fascist...or fascist puppets...all the way to the French border.
Kerry is there to detail the lethal weaponry on its way and issue instructions for the next offensive. How those guys (and Nuland) sleep at night knowing the bloodshed they have caused around the world I'll never know.
Hmm... Maybe John Kerry, visiting Kiev today, would be bringing back the 40 tons Ukraine gold that the US stole in March last year (quietly loaded onto a plane that took it to the US) ... *sheepish grin*
http://www.globalresearch.ca/ukraines-gold-reserves-secretely-flown-out-and-confiscated-by-the-new-york-federal-reserve/5373446
Why the long face, John! The horses ass is gonna do what now? Provide another $5 billion...pffft
Well if "we" have flown Lurch in for a photo op along with a hug and kiss session then things should be under control. I'm sure the folks in Ukraine will sleep much more soundly tonight.
Even better if Lurch brought along a CD with James Taylors greatest hits as a gift!
You rang! Let me take your hat.
http://www.kyivpost.com/content/business/national-bank-plans-large-scale...
update
https://web.archive.org/web/20150127203923/http://www.kyivpost.com/conte...
Fuck the US & EU sponsored Banderist Nazis and Fuck Ukraine! Watch for Maidan 2!!
great timing for bankruptcy when the U.S. Secretary of State is visiting and both the French and German President are arriving... Hopefully everyone will have their check books as this will be a costly trip! Greece will look easy after this trip!
Ukranian Brides on sale...go get em boys....
Yeah that's the story of my rich life.
ohhhh, domino...
Man, the problems are growing like weeds, eh?
I hope the anti-fascist resistence in the East converted to rubles before the crash.
http://www.blacklistednews.com/_Convicted_Fraudster_Jonathan_Hay%2C_Harv...’s_Man_Who_Wrecked_Russia%2C_Resurfaces_in_Ukraine/41522/0/38/38/Y/M.html
Yves here. You cannot make this stuff up. One of the sorriest chapters in recent American history was how we allowed an unprecedented opportunity to assist Russia in managing the end of its Communist era to turn into a looting exercise by well-placed insiders, including advisors under contract to Harvard.
If you are unfamiliar with this fiasco, which was also the true proximate cause of Larry Summers’ ouster from Harvard, you must read an extraordinary expose, How Harvard Lost Russia, from Institutional Investor. I am told copies of this article were stuffed in every Harvard faculty member’s inbox the day Summers got a vote of no confidence and resigned shortly thereafter.
Jonathan Hay ran the day-to-day operations of the Russia Project. He was found guilty of violating three counts of the False Claims Act and was debarred from serving in USAID. But he’s managed to resurface in Ukraine, working in the local operations of a Polish think tank. Nicely played.
By John Helmer, the longest continuously serving foreign correspondent in Russia, and the only western journalist to direct his own bureau independent of single national or commercial ties. Helmer has also been a professor of political science, and an advisor to government heads in Greece, the United States, and Asia. He is the first and only member of a US presidential administration (Jimmy Carter) to establish himself in Russia. Originally published at Dances with Bears
There are about 450 think-tanks in Europe and the US currently focusing on international relations, war, peace, and economic security. Of these, about one hundred regularly analyse Russian affairs. And of these, less than ten aren’t committed antagonists of Russia. That’s barely two percent of the intellectual materiel which can be counted as non-partisan or neutral in the infowar now underway between the NATO alliance and Russia. In this balance of forces, think-tanks behave like tanks – that’s the weapon, not the cistern...
...CASE Ukraine starts with the name of Jonathan Hay, whom CASE lists as a member of its founding Supervisory Board. According to a 100-page judgement issued in 2006 by US District Court Judge Douglas Woodlock in Boston, Hay is a convicted fraudster, inside-trader, self-dealer, and corrupt manipulator of US Government funds for the benefit of himself, his lover, and his friends. The judgement ordered Hay to pay a multimillion dollar penalty and restitution. His Harvard University co-conspirators, Andrei Shleifer and his wife, Nancy Zimmerman, were also convicted and fined. Harvard University, Hay’s and Shleifer’s contractor, was ordered to pay $26.5 million; Hay up to $2 million. Here is the US Government’s release, after Hay’s conviction. This also claims that Hay was “debarred” from taking pay from the US Agency for International Development (USAID) in future. The full story of Hay’s profiteering from the Russian asset sale schemes of Yegor Gaidar (below right), the short-lived proponent of shock therapy in Boris Yeltsin’s first term, and his privatization director, Anatoly Chubais (left), can be read here and here.
==============================
Former CIA Official Lied in Boston Bombing Cover-Uphttp://www.madcowprod.com/2015/01/28/former-top-cia-official-lied-in-bos...
Former top CIA official Graham Fuller lied in a press interview about his former son-in-law, Ruslan Tsarni, the uncle of “The Brothers Tsarnaev,” Tamerlan, now dead, and Dzhokhar, soon to go on trial in Boston for allegedly planting a homemade pressure-cooker bomb packed with shrapnel near the finish line of the Boston Marathon.
“A story on the Internet implying possible connections between Ruslan (Tsarni) and the Agency through me is absurd,” Fuller said in an Apr 27 2013 story headlined “Former CIA officer: ‘Absurd’ to link uncle of Boston suspects, Agency,” in Washington-D.C.-based Al-Monitor, which bills itself as the “Pulse of the Middle East.”...
...In his interview, Graham Fuller admitted that a second bombshell disclosure in an exclusive Apr 26, 2013, report headlined Boston bombers’ uncle married daughter of top CIA official, also was true: The Tsarnaev Brothers’ uncle, Ruslan Tsarni, was his former son-in-law.
Tsarni was married to Graham Fuller’s daughter Samantha between 1994 and sometime near the dawn of the millenium, Fuller grudgingly admitted. Still, he insisted,without explanation, that suggestions that law enforcement should be checking to see if Ruslan Tsarni had “hooked up” with the CIA through Fuller were “absurd.”
------------
Billionaire bankers, England’s Prince Andrew, & Ruslan Tsarnihttp://www.madcowprod.com/2015/02/04/a-muckraking-life-interrupted-2more...
Anything Ivy League assholes touch turns to shit.
"CONVICTED FRAUDSTER JONATHAN HAY, HARVARD’S MAN WHO WRECKED RUSSIA, RESURFACES IN UKRAINE"
Yeah, make hay while the sun shines. Or rather (in case of Ukraine) while the nazis are still in power...
Seems like everything US foreign policy touches turns to shit.
Correction:
everything US foreign policy touches turns to shit.
Everything Langley, Oop's US Government, touches turns to Shit.
I bet billionaire Porkyshanko is still getting his check.
Ukraine.
When is a coup a coup?
When we say it is.
I love how isolated Russia is in all of this:
http://www.zerohedge.com/news/2014-09-01/everyone-saying-russia-isolated...
Should we laugh or cry about Ukraine? Tragicomedy at its best, or worst.
A short modern history of Ukraine:
Ukraine is divided ethnically, religiously, and economically between its east and west. The west is farmland, occupied by Ukrainian-speakers, formerly part of the Austria-Hungary empire, Galicia and Poland, its people overwhelmingly Catholic, and with very strong anti-Russian sentiments stemming from the post-World War One civil war in which the USSR took control of west Ukraine, and from the mass famine caused by Stalin’s farm collectivization and peasant suppression policies of the 1930s. (When German forces invaded Russia in 1941, the Ukrainian population often welcomed the Germans as liberating Ukraine from the USSR yoke. Later, atrocities by the Germans turned many Ukrainians against the Germans). Stepan Bandera is a nationalist hero in the west - he formed battalions for the SS death squads in WW2, which engaged in extreme ethnic cleansing of Jews, Russians, Hungarians, and Poles. Bandera’s main aim appears to have been to establish an independent Ukraine free of Russian, Polish, and other outside influence. The Svoboda and Pravy Sektor political parties, prominent in the current Kiev government, revere Bandera, build monuments to him, and hold parades in his memory, complete with Swastika flags and Nazi SS insignia. Swastikas and Nazi SS insignia and tattoos are popular among the Svoboda and Pravy Sektor members. The people of western Ukraine are much more in favor of aligning with the EU than with Russia.
East Ukraine is overwhelmingly ethnically Russian and Russian-speaking, has most of the mines and industry, and is Russian Orthodox by religion. East Ukraine formed part of the Russian empire from the 17th century onward, much earlier than west Ukraine. Many people in east Ukraine are descendants of Russians who were settled there by the USSR to increase Russian influence. The people of eastern Ukraine are much more in favor of aligning with Russia than with the EU.
Ukraine did well under the USSR, having factories and mines, and being favored suppliers of military hardware to Russia. But after the USSR fell apart, oligarchs heading mafiosi-like gangs took over and plundered the country. The GDP in 2013 was about the same as in 1992. The factories and mines were Soviet-era, antiquated and energy-inefficient. Ukraine survived on food production in the west, and on manufactured goods and minerals from east Ukraine exported to Russia, all subsidized by IMF loans, loans from Russia, and oil and gas from Russia at subsidized prices. As of 2014, the cost of bailing out Ukraine's debts and modernizing its industries and economy was estimated to be as much as $150 Billion US dollars.
The oligarchs piled up $Billions in Swiss bank accounts but kept the impoverished populace quiescent with food and home heating fuel subsidies. Russia was content to continue to subsidize Ukraine as long as it remained a non-threatening neighbor and the Russian natural gas continued to flow through Ukraine to the EU markets. The financial condition of Ukraine kept getting worse under the plundering oligarchs, and then the IMF and EU demanded the elimination of these subsidies in return for new IMF loans and the Association Agreement (AA), respectively.
Yanukovich won the 2004 election but the Orange Revolution put Youschenko and Tymoschenko in instead. Yanukovich won again in 2010, and this time he held on. Ukraine was broke, so he sought a customs deal with the EU to increase exports. Not understanding the importance of Ukraine’s exports to Russia, in 2013 the EU presented the Association Agreement (AA), which was loaded to cut Ukraine off from Russia. The AA offered access to the EU markets, but demanded "market reforms" to EU standards that would cost Ukraine $20 Billion, cut-off of public subsidies, selloff of assets to Western interests, and turning over the Ukraine armed forces and territory to NATO. The AA clearly was more about moving Ukraine into the Western economic/political and especially military camp than it was about trade with the EU. Yanukovich came within weeks of signing the AA but held out for help with the $20 Billion adjustment cost. The EU offered a derisory $300 Million. Then Russia offered a covenant-light $15 Billion loan, cheap natural gas and continued market access, and Yanukovich accepted the Russian offer. Popular protests broke out against Yanukovich over his failure to ink the AA and the move to strengthen ties with Russia, and over rampant corruption in his political party’s shakedown tactics against Ukrainian businesses and people. Not that Yanukovich was necessarily more corrupt than any other Ukrainian politician, the politics of Ukraine is noteworthy for corruption and crony favoritism. The US/EU/NATO cabal then took advantage of the popular protests to trigger the Maidan revolution that Vicoria Nuland, the US State Department, CIA, and Soros had been preparing for several years. Yanukovich fled for his life and the US puppet Yats and the neo-Nazi Svoboda and Pravy Sektor thugs took power in Kiev. The US/EU/NATO cabal had won the day. But the ultra-nationalist Banderists in Kiev overplayed their hand by passing a law that outlawed the use of the Russian language in education and government, sending all too clear a message to the ethnic Russian population in east Ukraine. East Ukraine was Yaukovich's power base, by the way, so his ouster in a coup was not popular in east Ukraine.
Things went awry quickly. Russian Intelligence had predicted this sort of coup when Obama was elected in 2008. Putin apparently did not act on this until the February, 2014 coup, then quickly engineered a plebiscite in Crimea that resulted in Crimea joining Russia. Lugansk and Donetsk also held plebiscites and voted to join Russia. Russia accepted Crimea but demurred on Lugansk and Donetsk. Kiev formed its National Guard out of the neo-Nazi Svoboda and Pravy Sektor thugs (allegedly funded by oligarch Kolomoisky) and sent it to do some atrocities (Odessa, for instance) to intimidate east Ukraine. Lugansk and Donetsk organized their own armies and have since delivered major defeats to the Kiev armed forces and the National Guard, gaining huge piles of military equipment from the Kiev forces.
In the meantime, several tons of Ukraine's gold reserves disappeared on a plane to New York or somewhere west. Then the rest disappeared in a crooked deal run by some oligarchs connected to Kiev.
The new Kiev coup puppets expected to be showered with money by the US/EU/NATO cabal, but were fobbed off to the IMF instead. The IMF agreed to a new $15 Billion loan, but demanded public subsidies be eliminated. The IMF advanced $3 Billion but it turns out 90% of this ($2.7 Billion) disappeared into oligarch bank accounts in Switzerland. The IMF is holding back on new tranches, saying no new tranches until Ukraine is pacified and reunited.
Ukraine owed Russia for its 2013 and 2014 gas bills. This fits into a bigger story of EU/Russian gas politics and Ukraine's history of siphoning gas from the Russian pipelines to the EU through Ukraine. The USSR built its gas pipelines to the EU through Ukraine when Ukraine was part of the USSR and seen as controlled territory. But the pipelines were no longer secure after the USSR fell apart. Ukraine's oligarchs saw the gas and the pipelines as plunder to be had. Russia cut off the gas in 2006 (?) and 2009 to force payment of arrears, cutting off supplies to the EU as well as to Ukraine. To bypass the Ukraine problem, Russia and Gazprom built the North Stream to Germany (finished in 2012) with plans to extend it to the UK, and planned to build South Stream to Bulgaria and then through to a distribution hub in Austria.
The European Commission, egged on by the US and NATO (controlled and funded by the US) sought to diversify its natural gas supplies away from Russian sources, promoting the NABUCCO/TANAP project to bring gas from the Middle East (Iran, Iraq, Egypt, Israel, Saudi Arabia, Qatar) and Central Asia (Azerbaijan, Turkmenistan, Kazakhstan, etc.) into the EU via Syria and Turkey, respectively. The Shiite Crescent of Iran, Iran-dominated Iraq, and Syria had a competing plan to bring gas to the EU via Syria and Turkey and the Mediterranean. Syria stood in the way of the NABUCCO/TANAP plan, as did Mubarack in Egypt and the people of GAZA who have claims to much of the gas that Israel wants to take from under the Mediterranean. Hence, regime change plans were put into effect to eliminate Mubarack in Egypt, Assad in Syria, and Israel's opposition in GAZA. So far, that has not worked out so well. The US/UK/Israel/Saudi/Jordan/Qatar/Turkey coalition set loose the "Free Syrian Army" to depose Assad, without success, so they set up ISIS/ISIL/Islamic State to take a run at Assad. Russia has a naval base in Syria on the Mediterranean, and is supporting Iran and Assad. The US was ready to invade Syria and take out Assad, alleging that Assad was using chemical weapons in the Syrian population, but Putin headed off the US invasion with a deal for Syria to surrender its chemical weapons under UN supervision. The US has used Ukraine and the ensuing renewed Cold War against Russia as payback for Putin interfering with US/UK/Israel/Sunni Arab plans to depose Assad and take out Iran. The propaganda barrage against Putin and Russia and the shooting down of Malaysian Airlines MH17 over Ukraine are all attempts to demonize Russia and provoke Russia into rash military moves to justify full-on military strikes against Russia by the US and NATO.
In the meantime, Azerbaijan, a key supplier to NABUCCO/TANAP, announced that it would send its gas via the rival TAP plan to Italy via Turkey. NABUCCO/TANAP has been dead since June/July 2013 for lack of sufficient gas supply to justify the cost of construction, but proponents keep talking up the project, if only as a geopolitical head game against Russia and Gazprom.
The European Commission (EC), in its gas power play against Russia, enacted its Third Energy Package (3rdEP) in 2009, setting up an electricity and gas grid for the EU and enacting "competition rules" that prevent one entity from owning and supplying all the gas for a pipeline. This was clearly aimed at Gazprom's pipelines. The EC has used the 3rd EP to prevent Russia and Gazprom from using more than half of the capacity of the North Stream. The EC wants to force Gazprom to give part ownership and control of its pipelines to EC cronies, and to acknowledge the EC as the only EU party entitled to negotiate gas supply contracts and prices with Russia and Gazprom.
The countries through which South Stream would run had already signed deals with Russia in 2008, and were going to ignore the 3rdEP, but the EC and US strong-armed them into blocking South Stream. So Russia announced on December 1, 2014 that South Stream would be diverted to Turkey as Turk Stream and a gas hub would be built at the Turkey/Greece border. The EC went into denial, saying that South Stream would be built as originally planned, and would have to comply with 3rdEP rules. Gazprom's Alexei Miller bluntly informed the EC on January 16 that South Stream is dead, you idiots killed it, as soon as Turk Stream is up and running, Russia will cut off all gas going through Ukraine, and if the EC wants access to the gas, it had better start building pipelines to the Turkey/Greece border hub. The EC and Bulgaria are still in denial, saying that South Stream will be built. Russia and Turkey are making regular announcements on their progress on the Turk Stream project.
Turkey has always been a key transit territory for the US/EU planned "Southern Gas Corridor" and NABUCCO/TANAP for gas supply to the EU in competition with Russia. Turkey has been a member of NATO since about 1952 and has been trying to get EU membership for about 20 years, but the EU keeps finding excuses to deny final approval of membership. Turkey has always been regarded by the West as a reliable ally against Russia.
Turkey has a large Kurdish population in eastern Turkey, bordering the Kurdish area in Iraq where the Kurds have used the US overthrow of Saddam Hussein to form their independent territory of Kurdistan, rich with oil which it is shipping out via Turkey. Sunni Muslim Turkey is using its oil-export alliance with Kurdistan against the Shiite Iran-influenced Iraq government to influence Iraq. Turkey has a major grudge against the House of Assad in Syria because Syria gave safe haven to Kurdish separatist leaders from the 1980s onward, and those separatist leaders led a bloody uprising in east Turkey that took Turkey many years, much treasure and blood and international reputation to put down. Erdogan of Turkey has made his cooperation in supporting ISIS/ISIL/Islamic State in Syria conditional on Assad being dethroned.
However, after Turk Stream was announced, Erdogan has been emboldened to tell the EU that Turkey is done asking for EU membership and is not too happy with NATO membership either. Erdogan is apparently turning east to the Eurasian trade bloc with Russia and away from the West. This is causing earthquakes in EU, US, and NATO headquarters as they see a possible Russia-friendly arc forming through Turkey to Greece. Putin has been encouraging Greece to leave the EU and join the Eurasian bloc, while the new Greek government goes toe-to-toe with the Troika of IMF/EC/ECB over its unpayable debts. The Troika wants Greece to continue the pretend-and-conceal game that is being used to conceal the fact that Greece will never be able to pay its debts, and keep up the public image of the Greek/PIIGS "bailouts" as having cured the financial ills of the EU. Admitting that the "bailout" debts of the PIIGS will never be paid off would reveal the perilous debt mountains in the EU and cause financial and political headaches to EU leaders.
As their Ukraine and natural gas strategies against Russia are increasingly falling apart, the US is upping their military support of Kiev, with CIA, Academi (formerly Blackwater) and other mercenary forces, and announcements of increased shipments of lethal arms under the Ukraine Freedom Support Act. The Lugansk and Donetsk separatist forces, with no overt Russian armed forces support (but perhaps covert armed forces support), is enjoying significant success in pushing the Kiev army and National Guard west. Merkel of Germany keeps harping that Russia must comply with the Minsk Accords. Russia was key in getting Kiev, Lugansk, and Donetsk to agree to the Minsk Accords, but Kiev did not honor its commitments to vacate the Donetsk Airport and to move its artillery back beyond range of the capitals of Lugansk and Donetsk, and have continued daily artillery attacks on them to the present. NATO weapons and shells are now being used against Lugansk and Donetsk.
The separatist forces finally overcame the Kiev forces in the Donetsk Airport about a week ago. Now the Separatists have a large group of Kiev forces bottled up in the Debaltsevo Pocket, according to reports on Vineyard of the Saker. Kiev forces continue to kill civilians in terror attacks by artillery on cities and towns in the Ljugansk/Donetsk ("Novorussia") areas. The neo-Nazi National Guard "punisher battalions" are reported to have fled the pocket and are now considered "unreliable" by the Kiev army. Mass graves of dead civilians have been found in areas formerly controlled by the National Guard, pointed out by local inhabitants who have reported that the National Guard were killing civilians and were taking local women as sex slaves and then killing them.
Emboldened by their recent successes, the leaders of the Lugansk and Donetsk "Republics" are saying that any new ceasefire will not be on the old Minsk Accord lines but on the current front lines.
Merkel of Germany has apparently been acting under US White House control so far, going along with imposing sanctions on Russia even though their effects are hurting the German and EU economies. The Western press reports are saying that she has been pressing Putin to allow the US/EU/NATO cabal have its way in Ukraine, but who knows what she has been saying to Putin, who shows no signs of giving up Crimea or backing down to sanctions against Russia.
Meanwhile, China is grinning like a Cheshire cat, quietly going about extending its financial, trade, and political ties around the world while the US and Middle East are busy with Russia, Syria, and Iran. China has signed 2 large gas supply deals with Russia and is supplying the financing for construction of pipelines. China and Russia are busy pushing the New Silk Road railway/transport corridor to foster trade from China through central Asia to Russia and the EU, strengthening the pan-Eurasian trade, financial, political, and mutual defence relations among the Shanghai Cooperation Organization countries and the BRICS, while working to set up trade and financial systems to eliminate reliance on the US dollar. Russia, China, and India have been increasing their gold reserves by large amounts, perhaps intending to undercut the influence of the US dollar by introducing gold-backing for their currencies.
Ukraine and the EU tried to pressure Russia over Ukraine's outstanding gas bill by frustrating Russia's attempts to limit gas deliveries to Ukraine in 2014. EU countries reversed the flow of gas pipelines to divert gas to Ukraine, but then Russia just happened to experience "technical difficulties" with gas deliveries to Poland in the exact amount of gas that Poland was diverting to Ukraine, and the EU got the message and brokered a deal for Ukraine to pay up its arrears and pay for future gas supplies in advance. Russia has since started supplying coal to Ukraine to keep its electrical generators running, after Ukraine cut off the electricity to Crimea. The electricity is back on, but water to Crimea is apparently still cut off.
PM Poroshenko has announced that Ukraine will not need Russian natural gas supplies after 2 years in the future. Where replacement gas will come from is not clear. Chevron had plans to frack the oil and gas fields in west Ukraine but has now dropped those plans. Chevron also planned to frack in Poland, but has recently announced that it has not found any significant amount of gas there and is dropping Poland as well. Exxon Mobil planned to frack in east Ukraine and off the Crimea coast, but much of those areas is now under Russian or Novorussian control.
Ukraine is looking increasingly like Tar-baby of the Uncle Remus fables. Something that, once grasped, is very difficult to get rid of. The EU is now seeing how much it will cost to bail out Ukraine, and how impossibly corrupt the ruling class there is. Providing financial aid to Ukraine is a political non-starter while there are EU nations under austerity and while the PIIGS threaten the EU's financial stability. The US is willing to give military aid, but very little direct financial aid. Soros and US war hawks like McCain and the head of NATO have been demanding more military aid and even direct US military occupation of Ukraine, but Russia has made it clear that it will not tolerate US or NATO occupation of Ukraine.
In the meantime, Kiev's financial resources are dwindling. It had great difficulty paying its soldiers or providing them food during the summer of 2014, but that may not be the case recently. Without major injections of money, Kiev will soon be broke. A large part of Ukraine's tax base is in east Ukraine and now out of Kiev's control. Kiev's recent announcement of conscription of all males from the ages of 18 to 60 has not led to a stampede into the army, but has led to a stampede to the exits, and even civilian uprisings against army recruiters who enter villages to serve conscription notices.
Much of the population of east Ukraine has been displaced by the civil war there, and the economy of Ukraine under Kiev’s control is increasingly in tatters. Kiev reportedly has only about $7 Billion left in its foreign currency reserves, and this is expected to be spent in the next few weeks. Chelsea Clinton’s husband’s hedge fund learned the worth of Ukraine government bonds recently, losing half of its investment therein. Kiev has announced that it needs a further $15 Billion immediately to meet expenses and avoid default, but willing lenders are conspicuously hard to find. The IMF is politely refusing further tranches on the excuse that Crimea must be returned, the eastern civil war ended, and the country re-united as it was in 2013 before any further money will be advanced (i.e. Don’t expect any more IMF money in this century). Maybe Venezuela would be willing to trade some Bolivars for some Hryvnia, for some purpose known only to them. Or Ukraine could try to borrow from Mugabe in Zimbabwe. Or Argentina. Good luck.