Poroshenko Hooked Ukraine on Loans – Former Prime Minister

Ukraine has found itself in a bad fix subsisting on foreign loans which, in turn, are ruining the economy and making life unbearable for its people, ex-Premier Mykola Azarov wrote on his Facebook page Sunday.

“The state debt is growing at a fearful rate and even if the country gives away everything it produces this would still not be enough to meet all of its foreign debt obligations,” Azarov wrote.

Even more “impressive” is the speed of the economic degradation caused by the government.

According to conservative official figures, the country’s GDP has shrunk by 16.3 percent since January compared with same period of last year.

“Poroshenko, Yatsenyuk and Co beat the Tymoshenko Cabinet’s 2008-2009 record of a 15.7 percent economic downturn,” the ex-Premier noted.

Foreign loans which are “helping” keep the country float are conditional on dramatic cuts in social spending, salaries and pensions, which are already down to a bare minimum.

The government’s economic policy, which relied so heavily on foreign credits, is depriving millions of ordinary Ukrainians of any hope for a better future, Azarov added.

Ukraine is in talks with a committee of international creditors led by US asset manager Franklin Templeton Investments, which hold around $10 billion dollars’ worth of Ukrainian bonds.

In March, the International Monetary Fund approved a bailout package of $17.5 billion in loans over four years. But Ukraine will need to draw on other international funding sources and restructure its debt to address its total financing need, estimated by the fund at $40 billion.