Sunday, December 14, 2014

14/12/2014: IMF (Emergency) Mission to Kiev


Given economic / fiscal position of Ukraine (see http://trueeconomics.blogspot.ie/2014/12/10122014-ukraine-greece-cds-flash-red.html) it is unsurprising that the IMF has dispatched a 'rapid response' team out to Kiev. Here's the IMF official statement on the visit:


Not to over-interpret the above, it suggests that the IMF is considering seriously further 'assistance' to Ukraine and that such a commitment will be based not so much on the progress of structural reforms to-date, but on the progress of the promises of reforms in the future.

Of course, it is hard to imagine Ukrainian authorities unrolling any big and binding reforms in the current climate and given short span of life of the new Rada to-date, so don't take the above comment as sarcasm - Ukraine needs assistance now and the promise of reforms is real, in my opinion. The only problem is that any assistance via IMF will be short-term (3 years or so) and will be in the form of debt, while what Ukraine really needs is longer-term funding and in a form of a Marshall Plan (even if in debt form, at least on terms of near-zero cost of funding and flexible maturity). Sadly, such preferential funding is unlikely to come...
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