05:00 GMT +323 October 2018
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    Beggars

    Real Cost of EU Loans: Ukraine Economy on Verge of Collapse - French Media

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    With the average salaries at 2,000 hryvnias ($94), Ukrainians can no longer cope with ever rising prices and inflation.

    Ukraine is on the verge of economic collapse and subsequent social upheaval, French daily L'Humanite reported.

    To pay back a $17.5 billion loan approved by the Troika of creditors (the European Central Bank, the EU and the IMF) in March, Ukrainians literally risk losing it all.

    In exchange for the money received, Ukraine was put under strict conditions, similar to those in Greece and Spain: the government's budget was to be severely cut, salaries of public servants were reduced and gas prices increased threefold.

    "These measures could eliminate up to 90% of the purchasing power in households. We're heading towards a social upheaval," said Yevgeny Tsarkov, Ukraine's Communist Party deputy leader, as cited by L'Humanite.

    Ukraine is in such a grim situation that the country's economy is on the verge of a collapse.

    The price of the average food basket in the country increases 200 hryvnias per week ($9.5), while salaries stay the same. People can no longer cope with the price hikes and mounting inflation. The black market and grey economy are taking over the formal economy, said George Milyukha, the political scientist at the University of Kharkov.

    Right now, the average salary in Ukraine is about 2,000 hryvnias ($94) per month, while pensions for senior citizens stand at 1,200 hryvnias ($55).

    Related:

    World Bank Predicts Ukrainian Economy Will be Among 2015's Worst Performers
    Economic Stability in Ukraine Unattainable Without Russia – Steinmeier
    "It is About Survival": Ukraine Must Fix Economy – Opposition Leader
    Tags:
    European Union, International Monetary Fund, black market, loans, economic collapse, hryvnia, The European Central Bank (ECB), Ukraine
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