Archive for January 30th, 2013

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IMF arrive in Ukraine on the heels of a $7 Billion bill from Russia

January 30, 2013

Well this should be an interesting week.

Russia slaps Ukraine with a well timed $7 Billion bill for unused and unwanted gas within the contractual parameters of the awful deal crafted by Ms Tymoshenko, rumours are rife of a Ukrainian default on foreign debt this year (and let’s be honest, any debt payment rolled over or delayed is indeed a default on the original agreement), and the IMF has rolled into town with the same demands including the of raising gas tariffs to an impoverished population and sluggish less than competitive industry by 50%.  (That would be another 50% after the last 50%.)

Naturally Ukraine is not keen on paying Russia the $7 Billion it contractually owes.  Neither is it keen on raising the gas prices for its population or export producing industries to please the IMF.  Rumours of Ukrainian default to foreign debt holders will simply drive the cost of external borrowing through the roof via traditional sources.

Very difficult for any of those involved in any of the negotiations with any external party – not that any of those that make the press statements are likely to have been directly involved in such difficult discussions.

Very grim – but there is always the calculating Chinese to sell or rent what is left of the family silver to……which I touched upon yesterday.

Naturally the EU is publicly mute thus far.

 

Update!:  Rumour has it that on 30 January, Naftagaz has borrowed $5.9 billion from Delta Bank to deal with the Russian gas bill, with the bank profit being $240 million.  Who owns Delta Bank these days?

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