Author Topic: US to work on $1B Ukraine loan package  (Read 300 times)

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US to work on $1B Ukraine loan package
« on: March 04, 2014, 10:06:40 AM »
http://thehill.com/blogs/blog-briefing-room/news/199791-us-offering-1b-in-loan-guarantees-to-ukraine

March 04, 2014, 08:26 am
US to work on $1B Ukraine loan package

By Justin Sink

The Obama administration on Tuesday said it wants to provide $1 billion in loan guarantees to Ukraine as part of an economic assistance package designed to stabilize the country.

The White House said it would work with Congress to provide the economic help to Ukraine, where the economy is in turmoil following the ouster of the country's president and a subsequent military offensive by Russia, which has sents troops into the country.

According to the White House, the loan guarantees are intended to help Ukrainian citizens who could see the loss of generous energy subsidies from Russia, which has questioned the legitimacy of the Ukrainian government.

The U.S. is also dispatching “highly experienced technical advisers” to assist officials at the National Bank of Ukraine and the Ministry of Finance in a bid to stabilize the country’s finances. And American financial experts will assist Ukraine in implementing reforms to its energy sector.

“The new Ukrainian government has inherited an economy with enormous potential but that is currently financially fragile and uncompetitive,” the White House said in a statement. “The Government of Ukraine has said publicly that it will work to meet these urgent challenges. As the government implements important reforms, the United States will work with its bilateral and multilateral partners to ensure that Ukraine has sufficient financing to restore financial stability and return to growth.”

President Obama on Monday called on Congress to work on an assistance package to Ukraine, and lawmakers have indicated they will begin working on it next week.

The administration is also offering assistance to help Ukrainians fight corruption and recover stolen assets, as well as election advisors and monitors in a bid to boost the legitimacy of Ukraine’s upcoming election.

And the U.S. will help Ukraine navigate the World Trade Organization should Russia try to take politically motivated trade actions, including in the energy sector.

The steps are in addition to efforts by the International Monetary Fund underway in Kiev.

“The IMF will be at the front lines of an international package for Ukraine and is positioned to support robust and market-oriented reforms needed to restore Ukraine to economic health, including via providing large-scale financing and technical support,” the White House said.

Secretary of State John Kerry arrived in the Ukrainian capital of Kiev on Tuesday in another show of support for the nation's government.

The administration also is moving to impose sanctions against Russia. The U.S. has suspended preparations for the Group of Eight summit to be hosted by Russia in Sochi and suspended trade talks with Russian government officials who had met with top Obama administration officials as recently as last week in Washington.

The Pentagon has also put on hold all military-to-military engagements between the U.S. and Russia, including bilateral exercises and meetings.

Kerry said the U.S. is also considering freezing the U.S. assets of Russian officials or their allies in Crimea and barring them from entering the United States. The administration may also target Russian banks and punish companies found to have helped the Crimean occupation.

“Over time, this will be a costly proposition for Russia, and now is the time for them to consider whether they can serve their interests in a way that resorts to diplomacy as opposed to force,” Obama warned Monday.

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Offline Oceander

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Re: US to work on $1B Ukraine loan package
« Reply #1 on: March 04, 2014, 10:44:44 AM »
They skimp on the money where it counts - from what I've read in the WSJ today, providing Ukraine with about $15b in funding (via loans) to replace the bonds they recently sold to Russia, would go a long way to turning the tables on Russia economically by removing the economic hammer they currently have over Ukraine and instead raising our own hammer over Russia because (a) the funding would allow Ukraine to freeze/reduce the natural gas it currently buys from Russia, which would put a serious hamper on Russia's hard currency earnings if the rest of Western Europe froze their imports of natural gas as well, and (b) would leave Russian banks with massive exposure to those Ukrainian bonds, which Ukraine would have little incentive to repay at full face value; that approach would also put serious pressure on the Ruble, further damaging Russia economically.

Of course, when it comes to giving vigorish and payola to their own socialist fellow travellers in this country - unions - there is no expense they won't spare.

Offline Gazoo

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Re: US to work on $1B Ukraine loan package
« Reply #2 on: March 04, 2014, 10:54:45 AM »
They skimp on the money where it counts - from what I've read in the WSJ today, providing Ukraine with about $15b in funding (via loans) to replace the bonds they recently sold to Russia, would go a long way to turning the tables on Russia economically by removing the economic hammer they currently have over Ukraine and instead raising our own hammer over Russia because (a) the funding would allow Ukraine to freeze/reduce the natural gas it currently buys from Russia, which would put a serious hamper on Russia's hard currency earnings if the rest of Western Europe froze their imports of natural gas as well, and (b) would leave Russian banks with massive exposure to those Ukrainian bonds, which Ukraine would have little incentive to repay at full face value; that approach would also put serious pressure on the Ruble, further damaging Russia economically.

Of course, when it comes to giving vigorish and payola to their own socialist fellow travellers in this country - unions - there is no expense they won't spare.

While this all sounds good. China should just give them the money so we are not borrowing from Peter to pay Paul.
"The Tea Party has a right to feel cheated.

When does the Republican Party, put in the majority by the Tea Party, plan to honor its commitment to halt the growth of the Federal monolith and bring the budget back into balance"?

Offline Oceander

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Re: US to work on $1B Ukraine loan package
« Reply #3 on: March 04, 2014, 11:11:47 AM »
While this all sounds good. China should just give them the money so we are not borrowing from Peter to pay Paul.

I don't think anyone wants China buying itself a vassal country in the heart of Europe.  The Russians most assuredly do not want it and something like that would result in a "hot" response by Russia.  And the Europeans, no matter what they might say now, do not want something like that either.  Neither does the US because it would be enormously destabilizing.

Offline Gazoo

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Re: US to work on $1B Ukraine loan package
« Reply #4 on: March 04, 2014, 11:14:55 AM »
I don't think anyone wants China buying itself a vassal country in the heart of Europe.  The Russians most assuredly do not want it and something like that would result in a "hot" response by Russia.  And the Europeans, no matter what they might say now, do not want something like that either.  Neither does the US because it would be enormously destabilizing.

I was being a smart-ass. :laugh: What I meant was we do not have the money. We are so indebted to China, they may as well give it to them because we will owe China for it, in the end anyway.
"The Tea Party has a right to feel cheated.

When does the Republican Party, put in the majority by the Tea Party, plan to honor its commitment to halt the growth of the Federal monolith and bring the budget back into balance"?

Offline Oceander

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Re: US to work on $1B Ukraine loan package
« Reply #5 on: March 04, 2014, 11:17:33 AM »
I was being a smart-ass. :laugh: What I meant was we do not have the money. We are so indebted to China, they may as well give it to them because we will owe China for it, in the end anyway.

fair enough; however, this is precisely where deficit spending, if necessary, is useful.  Also, provided it's structured as a loan, it won't simply be a give-away, not like the give-aways to the unions.

Offline flowers

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Re: US to work on $1B Ukraine loan package
« Reply #6 on: March 04, 2014, 11:52:24 AM »
http://cnsnews.com/news/article/us-prepares-1b-aid-package-troubled-ukraine

Quote
KIEV, Ukraine (AP) — In a somber show of U.S. support for Ukraine's new leadership, Secretary of State John Kerry walked the streets Tuesday where nearly 100 anti-government protesters were gunned down by police last month, and promised beseeching crowds that American aid is on the way.

The Obama administration announced a $1 billion energy subsidy package in Washington as Kerry was arriving in Kiev. The fast-moving developments came as the United States readied economic sanctions amid worries that Moscow was ready to stretch its military reach further into the mainland of the former Soviet republic.

Kerry headed straight to Institutska Street at the start of an hours-long visit intended to bolster the new government that took over just a week ago when Ukraine President Viktor Yanukovych fled. He lay a bouquet of red roses, and twice th



Hey obama did say it was going to be costly. Why doesn't he just give it right out to Putin? That is where the money will end up going.


Offline Oceander

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Re: US to work on $1B Ukraine loan package
« Reply #7 on: March 04, 2014, 11:58:16 AM »
http://cnsnews.com/news/article/us-prepares-1b-aid-package-troubled-ukraine


Hey obama did say it was going to be costly. Why doesn't he just give it right out to Putin? That is where the money will end up going.


Not necessarily.


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