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Sunday, February 08, 2009

Tymo Seeks $5B Loan from Russia to Plug Budget Holes



At a time when Russia is nearly suing Ukraine — thus eroding Tymoshenko’s reassurance that neither side would sue the other — Tymoshenko decides to borrow some money from Russia.

Instead of heeding the call to balance the budget, voiced by President Yushchenko and Finance Minister Pynzenyk, she takes her business elsewhere.


On Thursday, she sent a delegation to Moscow angling for a loan of $5B at an interest rate of LIBOR +8 to +9% for a period of 5 to 7 years, Dzerkalo Tyzhnia reports. Ukrayinska Pravda obtained a copy of the delegation's directives.

In Ukraine, the buck never stops. In Russia, they made big bucks during the oil boom. Like the IMF, they know what they want, and their interests never stop with the interest rate.


As a condition of granting the loan, Moscow requests the following:

  • Ratification of the so called “zero option” agreement whereby Russia assumes liability for all debts owed by the USSR while the other former Soviet republics abandon their respective claims on assets owned by the USSR
  • Resolution of disputes concerning Ukraine’s claims on Soviet property abroad and Russia’s claims on property in Ukraine
  • Recognition of debts owed by Ukrainian enterprises to Vneshekonombank as government debt

Is that too much to ask? Tymoshenko doesn’t think so.

So there she is, beating a path to Putin’s door, trading favors, and doing whatever it takes to get the presidency — whatever the cost.


It must have been the missing link in her Ukrainian Breakthrough program.

Tymoshenko has admitted to getting Russia's approval for the loan, but has denied accepting the conditions listed above.

"It's not true," she said, despite the “zero option” being clearly stated as No. 11 in the directives.

Sources:
http://www.pravda.com.ua/news/2009/2/7/89267.htm
http://www.pravda.com.ua/news/2009/2/7/89279.htm
http://www.pravda.com.ua/news/2009/2/7/89285.htm
http://www.dt.ua/2000/2020/65376/

7 comments:

Russian President said...

Should Russia loan money to Ukraine, - after all of those (critical) posts about Russia in the blog "Ukrainiana"? If you were Russia, what would you do?

Taras said...

I'd love to sabotage that loan! If only I could…

Unfortunately, I’m being totally outmaneuvered by Russia's generosity, coupled with Tymoshenko's gas skills and financial genius.

Russian President said...

Yes, nobody can outmaneuver Mrs. Tymoshenko she even managed to seduce Putin. On that note, you may want to look at this post


Ukraine: Sic transit gloria mundi

http://thepresidentofrussia.blogspot.com/2009/02/sic-transit-gloria-mundi.html

- it concerns your country and also, you (and your friends) may want to participate in the poll (Will Ukraine default on foreign debt in 2009?)

I hope Ukraine will not have to default on its debt - a lot of Russian money may be lost ;-)

Taras said...

You mean, she seduced Putin into borrowing her some money? There’s a specific term for this type of transaction, and you know it:)

I voted “yes” because Tymoshenko’s stewardship of the economy makes the default scenario appear more likely.

Instead of balancing the budget, she wants to joggle with more debt.

She does business with Putin. She wants to be president. But who will pay for Putin’s investment? Who will pay for Tymoshenko’s presidency?

Unless Russia wants to buy herself a Ukrainian president, the money would be better spent elsewhere.

But I think that’s exactly what Russia wants.

elmer said...

Here's what I am trying to figure out.

Tymoshenko and the Ukrainian government just spent BIG BUCKS on the Blackstone Group to "advise" them in their dealings with the IMF (International Monetary Fund).

The IMF told Ukraine to balance the budget and restructure the banking system.

Ukraine agreed to balance the budget - but it wasn't done. The banking system? Nada, null, zilch.

Why the hell do they need the Blackstone Group, if Tymoshenko and Parliament are simply going to ignore the IMF?

This is a serious, serious blunder on Tymoshenko's part.

It's bad enough to go to the Mafia thugs in roosha for a loan, with every prospect that those thugs will want not only your firstborn children, but also you dogs, your possessions, and you soul.

But it's even worse to lie about it.

The IMF came to Ukraine last week to see about lending Ukraine some more money out of the $16 billion commitment.

Looks like it's not going to happen:

http://online.wsj.com/article/SB123422995045566031.html?mod=googlenews_wsj

If Tymoshenko and her fellow idiots in Ukrainian government don't understand it, maybe the Blackstone Group can explain it to them.

Why the hell did they hire the Blackstone Group???

Dunderheads!

Disgusting!!!!

Russian President said...

Yes, Mrs. Timoshenko-Kapitelman-Gdlyan is a (successful) opportunist, - as Churchill said:

"England doesn't have permanent enemies or friends, permanent only her interests"

- same can be said about the Ukrainian Prime Minister.

The Russians are trying to buy a Ukrainian President? Didn't the Americans do the same? Oh, yes, they got the President for free didn't even pay anything Ukraine.

As for Timoshenko trying to borrow her way out of his mess, doesn't everyone? The USA are doing the same - printing and borrowing more money to "solve" (i.e., postpone the inevitable) the problems.

I hope Ukraine won't default.

Taras said...

Elmer,

I think Tymoshenko’s next step will be to hire Soros to fix the hryvnia:)


Russian President,

You've done a lot of background checks!

The last name is Grigyan, though. (Gdlyan was a famous special investigator in the Office of the Prosecutor General of the USSR:)

For Yushchenko to qualify as a U.S. puppet, he should put us into NATO first. Under a Tymoshenko presidency, that would be impossible, which explains Putin's generosity.

You and I agree that borrowing alone will not stop the bleeding in the long run, right?

With that in mind, I want the governments of Ukraine and Russia to be more accountable to their people instead of being eager to buy or sell presidencies.