Europe Increasingly Sees Ukraine as a Failed State – Former IMF Official

In an interview with Sputnik, Daisuke Kotegawa, a former executive director for Japan at the International Monetary Fund (IMF), described the Ukrainian economy as being in a "completely catastrophic crisis situation."

Kotegawa mentioned American economist Steve H. Hanke, who said that official figures that put the annual inflation rate at 35 percent were totally inconsistent with reality.

"Prices rose by 272 percent in a year. This is the highest rate in the world. According to surveys, 20 percent of those living on a salary say that they don't have enough money for food."

A depressed economy leads to more crime and less security. As a result, the European attitude towards Ukraine is changing. European nations are increasingly seeing Ukraine as a failed state, the economist said, adding that it could get even worse.

"If this trend holds up, then, like in Greece, not only repayment of funds, received from the IMF and other entities, would be in danger. The growing public discontent could lead to political unrest, radical forms of nationalism and terrorism," Kotegawa warned.

Like a contagious disease it could spread to neighboring countries, he said.

Ukraine needs financial aid of approximately $340 billion to restructure its economy, according to some estimates, but this is hardly enough, according to the expert. In comparison, a bailout program for Greece, not ravaged by a civil war, amounts to $325 billion.

However, "since Ukraine's economy is four times bigger than Greece’s, the bailout should also be big," Kotegawa told Sputnik.