MOSCOW, July 10. /ITAR-TASS/. Amid the southeastern Ukraine havoc, the economic situation in the troubled country has paled into insignificance. Meanwhile, Kiev will have to restore the economy from the ashes while financial aid from the International Monetary Fund (IMF) and other Western financial institutions is not to save Ukraine from default, experts say.
The European Union and Kiev have agreed to work out a growth and recovery plan for 2014-2016 but the meeting of donors in Brussels did not specify the volumes of additional aid for Ukraine. The latter seeks to get the necessary funds in the IMF and the EU but aid is conditional on implementation of numerous requirements, which experts believe will push the Ukrainian economy to a collapse.
The measures on the table are to increase the age for pension eligibility, abolish the right to early retirement reduce pensions for employed pensioners, introduce pension age for serving officers at 60 years, hike coal price 50% for municipal companies and twice for private consumers, increase electricity tariff 40% and gasoline excise by 60 euro, cancel preferences and raise transport taxes 50%
“The IMF has already allotted Ukraine a tranche, which seems strange,” Deputy Dean of the Faculty of World Economy and International Affairs at the Higher School of Economics Andrei Suzdaltsev told ITAR-TASS. “The country is going through a civil war, while providing aid to a country amid political instability contravenes the IMF charter.”
Ukraine had already received about $7.5 billion from the IMF, US and EU, and a second tranche was highly important for the country, the expert said. But even this money will not suffice to prevent a default, Suzdaltsev believes.
“Default is inevitably approaching, it can happen in September or October, even if Ukraine fails to pay for the Russian gas like now,” he said.
Meanwhile, the IMF preconditions for lending will be unbearable for Ukraine, experts say.