Plan will impose austerity measures rivaling those decimating living standards of the Greek people
March 28, 2014
The bill will impose austerity measures rivaling those currently decimating the living standards of the Greek people. The draft law kowtowing to the IMF was proposed by the coup government of Arseniy Yatsenyuk, a former central banker who runs a foundation propped up by the U.S. State Department, the National Endowment for Democracy, NATO, Chatham House, Horizon Capital, Swedbank, and the German Marshall Fund.
Prior to taking the IMF deal to Parliament, Yats, as the State Department calls Yatsenyuk, said Ukraine has “no other choice but to accept the IMF offer” that will force millions of Ukrainians into poverty. He told legislators the IMF austerity package “is very unpopular, very difficult, very tough” and includes “reforms… that should have been done in the past 20 years,” prior to the U.S. funded and organized Orange Revolution and later rule by series of kleptocrats, including former Prime Minister Yulia Tymoshenko, who went to prison for embezzlement, and subsequently Russian supported President Viktor Yanukovych, who lived a lavish lifestyle at the expense of average Ukrainians. Tymoshenko announced she will run for president on the same day the IMF plan was considered by Parliament.
The IMF plan will jack up income taxes, levy a freeze on wages, curtail old age pensions, and raise energy prices. Prior to conceding to the IMF plan, Kommersant-Ukraine noted social benefits will be targeted first.
“The Finance Ministry has prepared a plan for optimizing budget expenditures, which implies budget sequestration is to be in force before the end of March. For this purpose, in particular, it has been proposed to reduce capital costs, eliminate tax schemes and preferences and to cut social benefits, for example, 50 percent of pensions to working pensioners,” it reported.
Gas prices will lead the way in deconstructing Ukrainian society: “State energy company Naftogaz announced this week that household gas prices would rise 50 percent beginning May 1 in what it said was part of efforts to make utility costs economically viable for the state by 2018. Some analysts have estimated prices might have to double for consumers,” CBS News reported on Thursday.
“The increase in fuel and transportation prices will inflate costs of production,” notes Michel Chossudovsky. “Combined with the impact of the devaluation of the hryvnia, it will have an immediate impact on the retail prices of essential commodities. Moreover, the phasing out of subsidies on basic food staples is also contemplated as part of the IMF framework.”
Chossudovsky said the “IMF package will trigger a significant overall increase in the prices of essential consumer goods, thereby contributing to the impoverishment of a population which has already been impoverished.”
It will disassemble the Ukrainian economy and soften it up for targeted neoliberal looting. The IMF deal is conditioned on the deregulation of the foreign exchange market, rolling back regulation of the forex market based on “enhanced exchange rate flexibility” – in other words, it will open the floodgates for speculative trade in the currency markets – and devaluing the hryvnia, the Ukrainian national currency.