Saturday, January 10, 2015

Ukraine and Russia Situation ( January 10 , 2015 )- Ukraine is already under the thumb of the West and Russia labors under the current sanction regimes of the EU / US , the ruble onslaught and the effects of drastically lower oil prices -- note the warnings of war as an end result


Tweets and News Snippets.....

may seek early repayment of $3bn lent to . Is 3bn bail bond w/ 60% GDP trigger. Could called in Apr.


Today Fitch international ratings agency announced they had downgraded Russia’s credit rating to negative BBB, one step away from a junk rating.
Now Russia looks to be retaliating in kind, exploiting Ukraine’s economic weakness in an apparent effort to strengthen Foreign Minister Sergei Lavrov’s hand at the bargaining table, with Moscow seemingly intent on maintaining leverage over its former Soviet ally.
“Ukraine breached conditions governing the provision by Russia of a $3 billion loan,” Finance Minister Siluanov told Russian news agency ITAR-TASS earlier today.
“Russia has every reason to demand early repayment of the $3 billion loan, but the decision has not been made yet.”
The money was loaned to the government of former Ukrainian President Viktor Yanukovych, ousted in February 2014 after he stole millions, possibly billions, of dollars from state coffers. It was the first tranche of a $15 billion bail-out abandoned after Yanukovych fled the country.
A clause in the loan agreement enables Russia to demand the loan be repaid early if Ukraine’s total state debt exceeds 60 percent of its GDP. By the end of 2014 Moody’s ratings agency estimated Ukraine's debt at 72 percent of GDP, although this has yet to be confirmed by government figures.
The threat of recalling the loan will come as a blow to Ukraine's war-weakened economy, which the EU has already attempted to stabilise with an 11 billion euro loan. The bloc also helped to negotiate a $17 billion loan to Kyiv from the International Monetary Fund.

Russia may demand early repayment of $3 billion lent to Ukraine - government source

“Ukraine’s current economic and financial situation suggests that a number of parameters which are the conditions for granting Ukraine a Russian bonded loan are being violated,” the source said, adding that: “Under these circumstances, it is likely that Russia will have to demand from Ukraine in the near future early repayment of the $3 billion debt.”

“This could provide the basis for demanding early repayment of the debt,” the expert added, describing Ukraine’s budget situation in general as pre-default.

Fitch rasiert Russland-Rating nahe Ramsch. Pleitewahrscheinlichkeit schießt hoch. via


The downgrade by Fitch puts it in line with the nation’s assessment by Standard & Poor’s, which cut Russia to BBB- in April. Authorities have responded to the currency crisis with emergency moves that included the biggest interest-rate increase since 1998, a 1 trillion-ruble ($17 billion) bank recapitalization plan and measures to force exporters to convert more of their foreign revenue into rubles.

Merkel keeps tough line on Russia sanctions

German chancellor Merkel Thursday took a tough stance on sanctions on Russia, countering French president Hollande's softer line. “I think we need to see the entire Minsk agreement implemented before we can say that sanctions will be lifted”, she said in Berlin, alongside Ukraine's prime minister.

Is America Preparing for War with Russia in 2015?

In mid-December President Obama signed the Ukraine Freedom and Support Act of 2014 which initiated sanctions on Russia. The Act was only the latest in sanctions that the US and the EU have enforced on President Putin and his people. It also gives President Obama the power to increase defense services, training and equipment to the Ukrainian “rebels”. 
The US recently imposed a new set of sanctions against Russia in response to what they say are violations of the Intermediate Nuclear Forces (INF) Treaty. The INF was signed by President Ronald Reagan with Soviet leader Mikhail Gorbachev in 1987. The treaty removed an entire class of nuclear weapons from legal use by banning the possession, production or test-flying of a ground-launched cruise missile with a range of 300 to 3,400 miles. The US accuses Russia of having banned intermediate and advanced-range ballistic missiles (IRBMs).
In addition, the State Department announced on Monday that they were imposing sanctions on four Russian officials for human rights abuses under the Magnitsky Act. Russian Foreign Ministry spokesman Alexander Lukashevich said the sanctions were endangering ” prospects for bilateral cooperation on solving the situation around the Iranian nuclear program, the Syrian crisis and other acute international problems.”
One of the most troubling actions from either country came in the last days of 2014.  On December 26 President Putin approved an updated war doctrine for Russia. The doctrine makes it clear that Russia will use military force to protect its citizens. The doctrine also stated that the US and NATO allied countries pose a military threat to the existence of Russia as a sovereign free nation.



Despite 's economy heading towards default, military spending is set at a record-breaking 5 percent."

Ukraine's 2015 budget has been coming in for criticism from various quarters as too optimistic on revenue and unrealistic on spending or budget deficit. The consensus seems to be that the country is perilously close to a sovereign default. Yet military spending is set at a record-breaking 5 percent. 
According to the budget, revenues in 2015 should amount to $30b which is 26 percent above the target for 2014. However, the figure is viewed with considerable scepticism: the IMF, EBRD and the country's own cabinet expect GDP for last year to plunge 7-9 percent and industrial production by over 10 percent. 
The International Monetary Fund has for months been sending envoys to Kiev but is in no hurry to extend another tranche of the $17b aid package agreed last year insisting on rapid implementation of economic reforms. Another IMF delegation is expected in Kiev later this month. 

Ukraine's former finance minister Victor Pinzenik estimates that the budget deficit, penned by the cabinet at $4b, will in reality balloon to a staggering $12.7b. With its forex and gold reserves shrinking to an estimated $7.5b at the end of last year, in 2015 Ukraine is also to repay $9b of its foreign debt, including $3b to Russia. 
Bloomberg warns that Ukraine's deepening recession and mounting debt burden have bondholders to Moody's Investors Service weighing prospects for a sovereign default. Russian economist Andrei Illarionov, former advisor to president Putin (and currently in fierce opposition to the Kremlin), believes Ukraine's default is ‘practically unavoidable'. 

The IMF, EU, and USA are demanding accelerate plans to ‘restructure' the Ukrainian economy.


After a flurry of IMF missions back and forth to Ukraine in November, on December 2 the Poroshenko government therefore agreed and appointed two western shadow bankers-one from the USA and one from Europe-to its two key economic positions of Minister of Finance and Economics Minister-to ensure that restructuring now occurs more rapidly, more aggressively, and to the fullest benefit of western economic interests.
In an unprecedented move, Natalie Jaresko, a USA citizen and current private equity firm, Horizon Capital, CEO was appointed Ukraine Finance Minister; and Aivaras Abramavicius, a Lithuanian with past employment ties to Swedish and German investment banks and, like Jaresko, educated in the USA, was appointed Ukraine Economics Minister.

Ukraine has paid for two more vessels carrying coal from South Africa, Ukrainian Energy and Coal Industry Minister Volodymyr Demchyshyn said.
"We've bought two more vessels of coal from South Africa, they are to arrive soon," he said.
According to Demchyshyn, the price of new coal is lower than the price for previous batches.
The quality of the coal previously bought from South Africa was insufficient for it to burn without mixing with other grades of coal, he said. At the same time, purchases of such coal are expedient while Ukraine faces a coal deficit, he added.
As reported, vessels carrying coal from South Africa can carry about 80,000 tonnes of coal.

Austrian-based Raiffeisen Bank International has increased its stake in Kyiv-based Raiffeisen Bank Aval’s charter capital, to 96.4403%, up from 96.4389%, the Ukrainian bank said in a report.
The report was posted in the National Securities and the Stock Market Commission's information disclosure system, with reference to PJSC National Depositary of Ukraine's data as of December 31, 2014, available to the bank on January 5, 2015.
The stake grew due to the purchase of the bank's shares on the secondary market.
Raiffeisen Bank Aval was founded in 1992.
It ranked seventh among 166 operating banks as of October 1, 2014, with assets worth UAH 44.676 billion, according to the National Bank of Ukraine.

The International Monetary Fund has cobbled together a $17 billion program for Ukraine but says $15 billion more is needed. Soros called on lenders to promise far more to spur Ukraine into radical reform and to send a signal toRussia
He said the EU's balance of payments assistance facility, offered in the past to Hungary and Romania, had $47.5 billion in unused funds. A financial stability mechanism, used inPortugal and Ireland, had $15.8 billion. Both could be extended to non-EU member Ukraineby modifying existing regulations, he suggested.

Finally, Soros noted that Ukraine would free up $4 billion by restructuring its debt via "a voluntary, market-based exchange". The country has just $10 billion in hard currency reserves but almost $8 billion in bonds falling due over the next three years.

"The additional sources of financing I have cited should be sufficient to produce a new financial package of $50 billion or more," he said, adding that sanctions on Russia needed to be extended after they expire from April.

 Tore retweeted

Kiev regime is forcing death by starvation freezing, & relocation in East Ukraine. Will we stand by and do nothing ? 

Ukraine- Is the 3rd Time the Charm?
In Pervomaisk today conditions are so bad that people are given ¼ of a loaf of bread per day to live on. Many areas are not even getting this. Starvation deaths in different cities now number 20 or 30 weekly. Within 20 days deaths from starvation and exposure/ freezing in Donbass is going to jump exponentially. The most vulnerable which includes the children and chronically ill will be hit the hardest.
Within 40 days without decisive humanitarian action the winter weather will take its toll on people in the hardest hit areas by ultra-nationalist shelling and rockets. Many live in the ruins or root cellars at what used to be their homes. Disease will follow. The nationalists are counting on them dying or relocating.
Will the world stand by while the Ukrainian nationalists use the slow method of genocide they perfected in WW2? Will the world allow the US and Europe continue to try to push Donbass to its knees, calling the victim a criminal?
The war criminal Olexandr Turchynov formerly post coup- acting president stated bluntly in an interview on December 17th that even he does not think the world will sit by and watch the total blockade finish its work. He doesn’t say he is against it. He just states there will be objections to it.
Contrary to the lie Ukrainian nationalists tell about fighting for a free and independent Ukraine today or fighting Nazis and Communists after 1941; both then and now they rely on the fact that you won’t believe human beings will do these things to other people. They don’t think you will believe they are doing these things to people.