19:53 GMT +3 hours28 November 2014
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Ukraine Steadfastly Heading Toward Default Putin

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In a letter to European leaders revealed on Thursday, Russian President Vladimir Putin painted a bleak picture of Ukraine’s economy, saying the country is “steadfastly heading toward default” because of its unbalanced trade with Europe.

MOSCOW, April 10 (RIA Novosti) – In a letter to European leaders revealed on Thursday, Russian President Vladimir Putin painted a bleak picture of Ukraine’s economy, saying the country is “steadfastly heading toward default” because of its unbalanced trade with Europe.

“Ukraine’s economy in the past several months has been plummeting. Its industrial and construction sectors have also been declining sharply. Its budget deficit is mounting. The condition of its currency system is becoming more and more deplorable. The negative trade balance is accompanied by capital flight from the country,” the Russian president said in his letter.

“Ukraine’s economy is steadfastly heading towards a default, a halt in production and skyrocketing unemployment,” he continued.

Putin called for urgent consultations at the ministerial level in order to work out concerted actions to stabilize Ukraine’s economy.

“It goes without saying that Russia is prepared to participate in the effort to stabilize and restore Ukraine’s economy. However, not in a unilateral way, but on equal conditions with our European partners,” the letter reads.

The Russian president said that “to a large extent, the crisis in Ukraine’s economy has been precipitated by unbalanced trade with EU member states.”

Putin said the EU is using Ukraine as a source of raw materials and a market for selling its high value-added commodities, an asymmetry which has created a deficit of over $10 billion in Ukraine’s trade balance, or almost two-thirds of Ukraine’s overall deficit last year.

The Russian president added that during the past four years, Moscow has been subsidizing Ukraine’s economy by offering discounts on natural gas worth a total of $35.4 billion, in addition to a $3 billion loan.

“No other country provided such support except Russia,” he said, adding that European partners offer Ukraine no real support, “only promises that are not backed up by real actions.”

“However, Russia cannot and should not unilaterally bear the burden of supporting Ukraine’s economy by providing discounts and forgiving debts; in point of fact, using these subsidies to cover Ukraine’s trade deficit with EU member states,” the letter said.

The letter is addressed to the leaders of 18 countries: Moldova, Romania, Turkey, Hungary, Slovakia, Slovenia, Macedonia, Czech Republic, Poland, France, Germany, Croatia, Bosnia and Herzegovina, Greece, Serbia, Bulgaria, Austria and Italy.

Tags:
economy, Vladimir Putin