Guess what the bankers will demand next?
Ukraine has a long history of being at the crossroads of continents, cultures and empires in collision. For now, i'm going to leave the geology rap for another post and skip on to the more recent collision of empires and cultures. The East-West divide between Russia and Western Europe has been ongoing since the long before Czarist Empire clashed with the Austrio-Hungarian Emipre over and over again through the centuries. The American Empire, a relative newcomer, has joined the EU in their common quest to rule the world by forcing other counties into a position where they must either 'privatize' their long held and culturally cherished commonly owned wealth or tell the banksters to eat shit.
Ukraine's economic chaos is slightly different from Greece's, Spain's, Italy's, Portugal's, Ireland's, most of Africa's etc. But the underlying situation is much the same. Each of them chose to believe in the 'Free Lunch' being offered them by the World Bank/ IMF in decades past because they refused to accept the gravitational and economic reality that 'what goes up must come down'. The believed the illusion they could borrow from the future, what all debt is including credit card debt, then pay it off with the 'growth' that the technology they'd be buying would provide. When it didn't go perfectly, they still believed, so they borrowed more [just like all good consumers do].
Just like individual credit card wielding consumers, the countries didn't want to read the fine print, didn't want to understand the implications of compound interest that all the strings that deals with devil have in them. When individuals deceive themselves long enough they go bankrupt, they lose their fancy wheels, their big screen TV, maybe the roof over their heads. When countries deceive themselves the banks seize their publicly owned common assets, their real wealth, like their natural resources, like their farmlands.
Of course, the big bankster folks use terms like structural adjustments instead of seizure. Naomi Klein wrote a ground breaking book about this whole game named 'The Shock Doctrine'. It's a complicated subject that's way to complex for a blog-post, but Naomi explains it wonderfully, it's a must read, IMO, for everyone.
Ukraine has had IMF loans upon loans going back to their independence in '91 and then more when the Orange Revolution happened in 2004. The electoral turmoil that followed didn't help the leaders avoid the trouble as they tried to correct centuries worth of problems in just a few years. Those kinds of changes, they were told, took huge capital and huge loans to accomplish. The Orange folks, being pink on the inside like the rest of us, wanted to believe in the IMF's miracles and almost immediately steered one of the globe's richest natural resource areas into a nosedive. Which of course they 'corrected' by taking out more loans.
For sure, there was corruption siphoning off some of the dough there, just like everywhere. When billions of bucks get borrowed the officials who choose which companies get what to 'grow' the economy inevitably those officials end up being offered inducements from those competing for the contracts. There was no more corruption in Ukraine than there was in Greece, Spain, Italy etc,
Then as the years went by Ukraine, due to its natural wealth in large part, started succeeding in raising the living standards of its citizens. Those were heady days, then came the global '08 debacle when they, and everyone else, faced plummeting demand for their resources and huge payments on their loans. Ukraine had, at that point built up a treasury surplus. But as the cost of energy rose, the loan payments continued and their income dropped, it didn't last.
Now Ukraine is practically bankrupt. Guess what the banksters say is the solution? That's right, more loans, more 'structural adjustments'. Under the terms of the EU offered of last year, which virtually nobody in the Western media seriously examined, the EU was offering $160 million per year for the next five years while just the bond repayments to IMF, for the outstanding loans were greater than that. In contrast, Russia offered $15 billion in cash and immediately paid $3 billion. .. Had Yanukovych accepted the EU deal, the country would have collapsed.
Today's headlines warn that Ukraine could split in two as regional lawmakers in the pro-Russian east questioned the authority of the national parliament. Parliament sought to oust President Viktor Yanukovych and as he left the capital and protesters took control. By tomorrow who knows what the headlines will be. But regardless, in the background will be the Snidley Whiplashes of international banking rubbing their hands together in glee. They know that Ukraine possesses 30% of the world's richest black soil, its agricultural industry has a huge potential and remains the only major asset in Ukraine that has not been privatized.
Tomorrow's post will try to show how Ukraine's situation is related to Africa and all the other places where the vultures are using their fiat currencies to buy up the globe's limited agricultural land in one of the greatest examples of how disaster capitalism's criminals operate we've yet seen.