- DTEK To Miss Debt, Bond Payments
- Rada Meets on Free Market Bills Needed for IMF Deal
- Corona Quarantine Threatens Millions with Unemployment
- Kyiv Commercial Landlords Give Corona Rent Breaks
- Land Borders Closing in Russia, Ukraine
- and Vinnytsia?
DTEK Energy, Ukraine’s largest private electricity and coal producer, seeks to restructure bank debt and its 2024 Eurobond. Bank debt payments are due tomorrow. A bond coupon is due Wednesday. DTEK Energy CEO Dmitry Sakharuk told Interfax-Ukraine: “Restructuring is not a default, it is a forced change in the order and timing of payments to creditors.” In the first half of 2019 report, DTEK Energy reported company debt of almost $2 billion – $1.2 billion in Eurobonds, and $711 million in bank debt.
On the need for restructuring, the company blamed: “Increasing concerns around the Covid-19 pandemic, unprecedented financial markets deterioration and commodity prices collapse, and their combined impact on the group’s financial position and operations.” UkrEnergo predicted last week that Ukraine’s electricity consumption will fall by 8.2% in March y-o-y. On Wednesday, DTEK Energo will suspend operations at three underperforming coal mines and put 6,500 miners on paid leave.
With billions of dollars flooding out of Emerging Markets in recent weeks, Interfax-Ukraine reports: “DTEK Energy’s Eurobonds fell from 104% of the nominal to 60%, and their yield rose from less than 10% per annum to more than 25% per annum.” IMF Managing Director Kristalina Georgieva said last week: “Investors have already removed US$83 billion from emerging markets since the beginning of the crisis, the largest capital outflow ever recorded.”
With a special Rada session, President Zelenskiy urges parliament to pass “two vital laws.” In a 10-minute national video address, he did not identify the laws – a bill to create a private farmland market and a bill to prevent the return of PrivatBank to Ihor Kolomoisky. Without mentioning the IMF by name, he adds: “After that, we will receive support from our international financial partners in the amount of at least $10 million… A failure [to pass] these laws would lead to economic downturn and even the threat of default.”
Noting that members of parliament will wear protective masks, he warns: “Although tomorrow you will all be wearing masks, it will become clear to people who is who. Society will understand whether you are servants of the people or servants of others’ interests.”
On Friday, Zelenskiy told reporters if the Rada passes the two bills, the IMF could release a quick $2 billion tranche within 15 days. He said: “I think that it will be $2 billion, and it will go immediately to the state budget of Ukraine.”
Aware that oligarchs are lobbying against the bank bill, IMF Managing Director Georgieva dangled more aid money Thursday: “This last week, very good progress has been made in the discussions with the Ukrainian authorities on the new Extended Fund Facility arrangement. Adoption of legislation to improve the bank resolution framework and on land reform would allow moving forward quickly with finalizing the parameters of the new arrangement, with larger access than previously envisaged.”
A top Ukrainian negotiator with the IMF, Kateryna Rozhkova, first deputy governor of the central bank, told reporters Friday: “The chances are great, but the last step is ours. In fact, it is the Verkhovna Rada that must adopt two bills, which are the so-called prior actions. This is the land bill and the bill about banks.”
The farmland market bill appears to have been watered down again. The latest version sees a July 2021 launch of a market that would only allow sales by individuals, allowing land holdings to total only 100 hectares. In 2023, holdings of 10,000 hectares would be allowed, Yevhenia Kravchuk, deputy head of the ruling Servant of the People parliamentary faction, told Ukraine 24 TV.
In the Rada session, members may also vote on making Serhiy Marchenko Finance Minister, several media outlets reported last night. Marchenko served as deputy finance minister in 2016-2018 under then-Finance Minister Oleksandr Danylyuk and then as deputy head of President Poroshenko’s administration. He would replace Ihor Umanskyi who has had the post since March 4.
The first two weeks of quarantine threw 500,000 to 700,000 Ukrainians out of work, estimates Gennadiy Chizhikov, president of the Chamber of Commerce and Industry of Ukraine. With 650,000 small and medium businesses employing up to 4 million people, he warns the figure of newly unemployed could jump 5-fold in coming weeks. Noting that small businesses prepared two weeks ago to make it to April 4, he said: “[With] the continuation of the emergency situation until April 24, many businesses are asking themselves: how can they make money during a quarantine? Most of them have a margin of safety until mid-late April.”
Kyiv City Council is giving 50% ‘quarantine’ discounts on rents paid by the 6,000 small and medium enterprises that lease almost 1 million square meters of city property. The discounts are valid from March 11 to the end of July. Separately, the owners of Dream Town, the shopping and entertainment center in Obolon, will not charge rent for the duration of the quarantine. Exceptions are food markets which remain open. Alexander Melamud, co-owner of Dream Town, writes tenants: “The events of recent days have shown that we all must survive one more test and get out of it with minimal losses, with dignity.”
As of Sunday, Ukraine has 475 publicly confirmed cases of Covid-19, a 7-fold increase in one week. Of the total, 20% are in Kyiv City, home to 10% of Ukraine’s population. The other major cluster is composed of three Western oblasts: Ivano-Frankivsk 41; Ternopil – 57; and Chernivtsi – 59. So far, 10 Ukrainians have died in Ukraine of complications from the virus.
Many Ukrainians suspect the real number of cases is higher. Five Rada members are known to have been tested positive for Covid-19. Also diagnosed as positive are Kyiv police chief Andriy Kryshchenko and Naftogaz production chief Andriy Favorov. Over the weekend, Oleg Mishchenko, a diabetes sufferer, died of Covid-19.
Last night, police and health officials started to perform temperature checks on people driving into Vinnytsia Region. There are 18 cases in Vinnytsia City.
Russia closes its land borders today to all passenger transport – cars, buses and trains.
Ukraine closed its land borders Friday night for crossings by bus, car and train. On Friday afternoon, thousands of Ukrainians backed up at Polish border points, waiting to cross into Ukraine. Many feared the border could be closed for longer than one month, reports Reuters. In the two weeks since President Zelenskiy asked Ukrainians to come home, more than half a million have made the trip, estimates the President’s office.
Concorde Capital’s Zenon Zawada asks: “How long will Ukrainians tolerate such conditions?…being at home, without work, having left a better paying job abroad…We see big political problems for the president if this severe quarantine is extended beyond the May holidays…A long quarantine will only promote dissatisfaction, political activity and protests.”
With its 35 jets parked at Boryspil through April 24, UIA, the national flag carrier, plans to ask the government for a $60 million stabilization loan, UIA president Evgeny Dykhne, tells Liga.Business. After losing $100 million last year, the airline cut unprofitable routes and reduced its fleet, aiming to break even this year. Now it is losing $14.5 million a month, Dykhne says. Separately, the International Air Transport Association recently doubled its coronavirus-related losses for world airlines this year – to $260 billion.
- Showdown at the Rada Over Kolomoisky Containment Bill
- Steel Giants Cut Production
- Coronavirus Cuts for Budget
- Poland Fights to Keep Ukrainian Workers
In a turning point for Ukraine, the Rada meets to debate a banking bill that would unlock up to $10 billion in aid from the IMF and international financial institutions. With debt repayments peaking during this economic crisis year, Ukraine needs the money and an international seal of approval for its economic policies.
“Bill would stop oligarch Igor Kolomoisky from overturning nationalisation of PrivatBank,” headlines the Financial Times. “The legislation will prevent former owners of 100 Ukrainian banks that were nationalised or wound up during a sector-wide clean-up from regaining control of their assets through the courts,” Roman Olearchyk reports from Kyiv. The IMF also demands that the Rada pass a bill that would create a private farmland market in Ukraine, reports Bloomberg.
With Kolomoisky allies lobbying to block the bill, free market opposition parties are joining with members of President Zelenskiy’s ruling Servant of the People Party to support it. The American Chamber of Commerce urges: “Ukraine’s Parliament must take bold, decisive, and rapid action this week to vote on necessary legislation to conclude the deal with the IMF that will enable disbursements to start in the near term.”
As the coronavirus quarantine pushes Ukraine into recession, some media voices urge Ukraine to default on its debts, warns Vladyslav Rashkovan, Ukraine’s representative to the IMF. “They say only cowards pay their debts,” Raskhovan writes on Facebook. “I’ll just cite below the words that stand on a par with the word ‘default’: devaluation, inflation, bankruptcy, empty shops, bank raids, social protests, street violence, looting, international isolation.” For Rada members who are wavering he recommended looking at “vivid pictures from Argentina, Ecuador, Russia and some other countries that are associated with the word ‘default’.”
ArcelorMittal Kryvyi Rih, Ukraine’s largest mining and metallurgical plant, is cutting personnel and production, the company reports. For a mix of commercial and epidemiological reasons, some units are closed, others work staggered shifts, and many office workers work from home. The mill is renting 48 buses to compensate for the lack of public transport.
Interpipe, Ukraine’s pipe and wheel giant, is preparing for sales to drop this year by 30% to 50%. Low oil prices cut oil company drilling plans, dragging down pipe sales, Fadi Hraibi, the company’s CEO, tells Interfax-Ukraine. Although rail wheel production was up 17% during the first two months of this year, compared to Jan/Feb 2019, Hraibi forecasts that the European recession will force cuts in railroad investment. Hraibi intimated that job cuts will be inevitable among the workforce of 12,000, largely based in Dnipro. The company is owned by Viktor Pinchuk.
Kremenchuk Steel Casting Works will close Wednesday, putting almost 1,000 workers out of work, reports Kremenchuk Gazeta. Workers told the city newspaper that sales are falling and the company has trouble getting workers to work because of anti-coronavirus controls on buses. Part of the TAS Group, the Poltava Oblast factory is owned by Sergiy Tigipko.
From North Dakota to Kremenchuk: Odesa port is unloading 80,000 tons of US Bakken shale oil. The oil is to be pumped 400 km northeast to Ukraine’s sole working refinery, in Kremenchuk. Last year, Odesa received its first shipments of US shale oil, unloading three tankers for a total of 250,000 tons.
For the first time in three days, the central bank sold dollars Thursday to defend the hryvnia – only $11 million. Last Monday, in the only other sale of the week, the National Bank of Ukraine sold $50 million. Friday, the official exchange rate is 28.14 hryvnia / dollar – 12.4% less than the March 9 rate of 25.03. The central bank reports that 75% of Ukraine’s bank branches are open.
To fight coronavirus, the government plans to raise domestic borrowing by $5.3 billion, external borrowing by $4.7 billion, and to create a budget stabilization fund of $4.4 billion, says Oleksiy Honcharenko, a Rada member from former President Poroshenko’s European Solidarity Party On the spending side, the government proposes cutting spending: for the Supreme Anti-Corruption Court by 22% for the Veterans Affairs Ministry by 30%; for road safety by 15%; and support for regional development, movie making, theaters, sports and the Ukrainian Book Institute.
Spending to mitigate the social impact of the coronavirus quarantine will eat up 15% of the big road spending program planned for this year, reports Delo news site. The Finance Ministry wants to diver $310 million from the $2 billion roads project. Last week, Zelenskiy said: “We have no right to completely stop the country. The Big Construction project must be continued, but everything must be done safely.”
Three weeks after the first reported coronavirus case in Ukraine, there have been 162 confirmed cases. Eight Ukrainians have died, five here and three in Italy. It is not known how many light or asymptomatic cases there are. The Foreign Ministry reports that 21 Ukrainians are being treated outside the country.
Poland’s farmers and builders are lobbying Warsaw to hold on to their Ukrainian workers. About 20% of Poland’s Ukrainian construction workers have gone home and won’t come back until borders are reopened, Poland’s Association of Construction Employers warns in a Bloomberg article headlined: “Shut Border Risks $47 Billion Migrant-Based Polish Industry.” Similarly, Poland’s Farmers and Agricultural Organizations tells Euractiv: “Employees from Ukraine permit Poland to maintain the same level of production in the food industry.” With an eye to Germany’s move last week to guarantee that season farm workers keep coming, Poland plans to extend visas and to suspend fines for overstays, Reuters reports from Warsaw.
- Ukraine’s Quarantine Extended One Month, Possibly into May Holidays
- Cross Border Travel Stops Tomorrow Night
- Business Leaders Forecast Unemployment Spike
- Power Consumption Drops
- Great Time to Rent a Kyiv Apartment
- Boryspil Looks Like Pyongyang International Airport
Overriding business objections, Ukraine’s government is extending the national quarantine for an additional month, until April 24, and is blanketing the nation with an “emergency situation” designation. The Kyiv Post reported a government source saying the quarantine – closed schools, restaurants and metro – could be extended to May 9, near the end of the May holidays.
As part of the shutdown, Ukraine’s land, sea and air borders to be closed to all travelers. “There are two days,” Minister of Internal Affairs Arsen Avakov warned on Facebook. Referring to Sri Lanka, he said: “After that, if you sit somewhere in Ceylon in a good hut, well, keep sitting there since you decided to do so.” The emergency ‘situation’ empowers authorities to carry out compulsory medical examination of people with COVID-19 symptoms, to carry out compulsory hospitalizations, and to enforce home quarantines.
Prime Minister Shmygal told an emergency Cabinet meeting Wednesday: “This is an urgent need, because we see in recent weeks that the only way the coronavirus got into Ukraine was the flow of citizens from abroad. And this flow continues. And this strengthens and increases the number of people infected.”
Business leaders warn that prolonged quarantine will lead to mass unemployment.
“The cost of stopping the economy for a few months can have devastating consequences for the entire population,” says Anna Derevyanko, executive director of the European Business Association. “Along with saving lives, you should think about saving the economy.” According to a poll of member companies taken on Monday, an extension of the quarantine will force 23% to cut salaries, 17% to cut staff, and 6% to partially close their businesses. In the first 10 days of quarantine, almost half of companies recorded losses – between 20% and 50% of revenues.
Before the government’s decision, the Ukrainian Business Council, representing 84 associations, said: “We must save the economy, business must work and pay taxes – all as one…We propose to partially resume business activity from April 3, by no means introducing new measures and gradually canceling the current restrictions.”
In poll conducted earlier this week, Gradus, the marketing agency, found that 57% of respondents said they do not have the savings to get through one month. In eastern Ukraine, people on average said they only have enough money for two weeks.
In a concession to farmers, the Cabinet is lifting quarantine bans on the sale of seed, fertilizer, feed, pesticides and veterinary medicines. Food is Ukraine’s top export. In a concession to industry, the Cabinet is setting hygiene standards for company buses.
Ukraine’s electricity consumption will fall by 8.2% in March y-o-y, UkrEnergo tells Montel, the Norway-based European energy data provider. Separately, Ukraine’s State Statistics Service reports these year-over-year reductions in February: coal – 4.7%; natural gas – 2.9%; and gasoline – 2%. Due to the mild winter, Ukraine starts this week to pump natural gas into its storage reservoirs. As of March 1, coal reserves were 4.23 million tons, 56% more than last year.
Losses of Ukraine’s concert and theater industry amount to $20 million during the first 10 days of quarantine measures, Dmitry Feliksov, co-owner of Concert.ua ticket service, said on the Freedom of Speech TV show. Predicting that losses will double if quarantine measures are extended through April, he said: “The concert and theater industry is not only about artists. These are tens of thousands of people involved – from drivers, engineers, technical personnel to advertising agencies, ticket operators.”
Kyiv apartment rents dropped by one third in March, reports Obozrevatel, citing Maxim Baburyak, a real estate broker. “Now it’s very difficult to rent an apartment,” he tells the news site. “There are no showings. Realtors have lost their jobs. Earlier, if a good economy priced apartment got three to five showings a day, now there are not any calls.”
Hotel occupancy in Ukraine on Saturday was 86% below one year earlier, STR Inc, reports. Across Europe, 39,988 hotels are closed., reports the US-based hotel industry research company. On Sunday, revenue per available room in Europe was 44% percent level of one month earlier, a far steeper drop than in 2009. Yesterday, in Golden Gate, Kyiv’s historic core, Air B’nB was listing apartments for as little as $18 a day.
Traffic through Ukraine’s airspace on Monday was 87% below one year earlier, UkSATSE, the air traffic control agency, posts on Facebook. Overflight fees cover a much of the agency’s budget.
Ukraine’s aviation industry – largely airlines and airports – could lose $500 million during the first quarter of this year, warns the Aviation Committee of the Ukrainian Chamber of Commerce and Industry.
With Kyiv Boryspil a ghost town, the airport does not enough money to pay its 3,500 employees on leave beyond early April, airport director Pavlo Ryabikin tells Liga.Net. “We already felt massive non-payments from all airlines,” he said. “Starting from our own, which simply have nothing to pay, and ending with the Turks and KLM, who simply write letters about payment deferrals for three to five months.”
Wizz Air, the leading discount carrier serving Ukraine, forecasts that European air travel will normalize in May and most demand will recover in June. However, before then, the air transportation market is shrinking by 25% in March and is to be even worse in April, József Váradi, CEO of the Budapest-based airline tells Index.hu, Hungary’s leading news site. Váradi says the airline has a financial reserve of €1.5 billion and is preparing for the recovery by ordering more planes.
- Ukraine’s Gas Import Bill Down 14%
- Finance Ministry Sells Almost $1 billion in FX Bonds
- Thanks to Coronavirus Curbs, Job Applications Jump 60%, Half Kyiv’s High End Hotels Suspend Operations
European oil prices could fall in half from their current price of $29 a barrel, David Sheppard, Financial Times Energy Editor writes in an analysis headlined: “Oil industry faces biggest crisis in 100 years.” While the Saudi-Russia price war attracts attention, coronavirus restrictions drive down demand. “As Europe and North America hunker down, the latest estimates suggest 10 to 25 per cent of global consumption could vanish in the coming few months,” he writes. “The result is likely to be storage tanks being filled to the brim within months. Even supertankers at sea, called into action as emergency storage vessels, could be maxed out by the end of summer…Analysts are starting to predict the price could fall to the teens or even into single digits.”
Low European gas prices are filtering down to the monthly gas bills paid by Ukrainian households. Naftogaz tweets: “The gas price for March for the population has been reduced by 14%.” Ukraine’s state energy company notes that it does not supply gas directly to the population. Referring to intermediary companies, the company tweets: “We hope that private suppliers will adjust their price according to the market decrease.”
The Finance Ministry sold almost $1 billion worth of government bonds at its weekly auction Tuesday. The government sold $801.6 million worth of 3-month dollar bonds with an average rate of return of 3%. The government sold €75.7 million worth of 14-month euro bonds with a rate of return of 2.22%. Tuesday’s auction was 11 times larger than the one the previous week when $71.6 million worth of 9-month bonds went for an average rate of return of 3.5%. On March 3, at the last hryvnia bond auction, six-month bonds went for an average rate of 9.9%.
Due to coronavirus restrictions, Raiffeisen Bank Aval, the largest foreign-owned bank in Ukraine, suspends operation this week at 71 branches – about 15% of the total. Bank Board Chairman Alexander Pisaruk said branches will not close in cities where there is only one branch. Separately, through work at home programs, the bank has been cut in half the number of staffers inside branches that are open.
In the midst of the coronavirus pandemic, Ukraine’s corn, wheat and barley exports rose 26% last week over the previous week, reports APK-Inform consultancy. In the week of March 14-20, Ukraine’s grain exports by sea hit 1.2 million tons. In the export year that ends in July, Ukraine’s grain exports are up 22%, to 44.2 million tons. Last week, most exports went to three densely populated nations heavily dependent on food imports: China, Egypt and South Korea. Taras Vysotskiy, Deputy Economy, Trade and Agriculture Minister, said this month Ukraine could export a record 52-55 million tons of grain this season, including 19-20 million tons of wheat.
Kernel, Ukraine’s largest sunflower oil producer, has sold its 50% stake in its Russian grain terminal at Taman, on the Sea of Azov. A subsidiary of Russia’s VTB Bank paid €61 million cash for the terminal, which is 10 km east of Russia’s new bridge to Crimea, over the Kerch Strait. In a statement to the Warsaw Stock Exchange, Kernel said it hasn’t been involved in Russia operations since 2017, when it assigned its transshipment quota to Global trade giant Glencore, which owns the other half of the terminal.
Now that public health officials are steering Ukraine’s economy, they might want to read: “Coronavirus Took My Job”: People Who Lost Their Jobs During the Quarantine. Hromadske International profiles five missing faces from Kyiv’s workforce: a cook, an IT worker, a photographer, a physical therapist and a musician.
In the first 12 days of Ukraine’s March quarantine, job applicants to the hh.ua placement agency jumped by almost 60%. Compared to February, new applicants are more male, more experienced and more managerial, the job agency reports. Job applicants from March 12-23 were 63% male, compared to 53% in February. In March, 67% had more than six years of experience, compared to 53% in February. The company says it works with 77,000 companies and has 1.3 million resumes on files. Separately, an American lawyer tells the UBN that he posted an opening for a lawyer on Wednesday and got 100 CVs by Friday.
InterContinental Kyiv, Fairmont Grand, Radisson Podil, Park Inn and CityHotel are closed for the duration of Kyiv’s coronavirus quarantine. Hilton Kyiv, Hyatt Regency Kyiv, Aloft, the two Ibis hotels, the Premier Palace and Radisson Blu on Yaroslaviv Val remain open, generally with reduced services. Kyiv Mayor Vitaliy Klitschko estimates the quarantine will cost the city budget $35 million.
- Ukraine’s GDP to Shrink This Year by 4-9%
- US, Germany, Asia Face Severe Downturns
- IMF May Boost Aid to Ukraine by 50%
- From Kyiv to New York: Backlash Starts Against Shutting Down Economies
- Back to the USSR: Ukraine Has One Airport and Outbound Tourism is Banned
Ukraine’s economy will shrink this year by 5% “in an optimistic scenario,” Yulia Kovaliv, deputy head of President’s Zelenskiy’s office, told a COVID-19 online discussion hosted Monday by the European Business Association. Fighting the virus will also cause Ukraine’s budget deficit to more than triple this year, 2.1% to 7% of GDP.
Separately, Tomas Fiala, EBA President, predicts two scenarios for Ukraine’s economic performance this year: a 4% drop if the quarantine is over by June, and 9% if it lasts longer. In the first scenario, the exchange rate would drop to 30 hryvnia to the dollar, inflation would be 5% and unemployment would rise. In the second scenario, the exchange rate would move to 35 hryvnia to the dollar and inflation would increase. Fiala who is president of Dragon Capital, spoke Friday night on the Freedom of Speech TV talk show.
Behind the gloomy forecasts are gloomy reports from the world’s largest economies.
“Top Economists See Echoes of Depression in U.S. Sudden Stop,” headlines Bloomberg. “The economy is headed toward its worst quarter in records since 1947. JPMorgan Chase & Co. expects gross domestic product to shrink at an annualized rate of 14% in the April-June period while Bank of America Corp. and Oxford Economics both see a 12% drop. Goldman Sachs Group Inc. sees a 24% plunge.”
Germany, the EU’s largest economy, could contract by 7 to 20 percentage points this year, depending on the length and breadth of coronavirus restrictions, forecasts Munich’s ifo Institute for Economic Research. Today, the Bundestag is to review a €156 billion aid package to Germany companies and workers.
The Asia-Pacific region is expecting a wave of corporate bankruptcies, reports the Financial Times. In the last decade, corporate debt there has doubled to $32 trillion. In the world tourism industry, losses from coronavirus can reach $1 trillion by the end of 2020, says Bulut Bagchi, president of the World Economic Forum.
Losses from the coronavirus pandemic have already exceeded the damage from the global financial crises of 2008 and of the September 11 2001 attacks, Jose Angel Gurria, Secretary General of the OECD tells the BBC. He says: “Even if there is no global recession, we will get either zero or negative growth in many countries of the world, including the largest. Because of this, global growth will not only be low this year, but will also be restored for a long time.”
Coronavirus could cause a global recession this year worse than the global financial crisis of 2008-2009, the IMF predicted. The IMF now expects “a recession at least as bad as during the global financial crisis or worse,” IMF Managing Director Kristalina Georgieva said after a conference call of finance ministers and central bankers from the Group of 20 of the world’s largest economies. “The economic impact is and will be severe, but the faster the virus stops, the quicker and stronger the recovery will be.”
Georgieva said the IMF is ready to allocate up to $1 trillion of loans. She said about 80 countries have turned to the fund for help.
President Zelenskiy talked with Georgieva by telephone and proposed to nearly double the tentative $5.5 billion aid program to Ukraine, Kovaliv said. Bloomberg reports that the new total could be $8 billion. Ihor Umanskyi tells Bloomberg that an agreement is nearly complete. Other sources say the IMF has signed off on the draft text of a bill to ring fence PrivatBank from its former owners, notably Ihor Kolomoisky. Georgieva tweeted after her talk with Zelenskiy: “I had a very constructive conversation with President Zelenskiy today and expressed our support for Ukraine as the country confronts the tremendous challenges caused by COVID-19.”
With the financial crisis, Ukraine’s back is to the wall, Anders Aslund writes in an Atlantic Council essay titled “Ukraine Urgently Needs a New IMF Agreement.” Noting that in the last month, yields on Ukraine’s longterm Eurobonds have jumped from 4% a year to 14%, he writes: “Neither Ukraine’s government nor its enterprises can borrow on the private market any longer…There is no other realistic choice. The IMF offers both the seal of approval and access to the international financial market. Forget sheikhs from the Persian Gulf or Russian oligarchs!”
Pushback is forming to resist moves to shut down Ukraine’s economy to contain the new flu virus.
On Sunday night, Health Minister Illia Yemets called for martial law in a TV interview. On Monday, the Health Ministry posted: “Health Minister Illia Yemets is calling on lawmakers to demonstrate determination, be brave and get together for the sake of the Ukrainians and vote for introducing a national emergency.” By Monday night, two influential Rada members were saying Yemets is resigning.
“Shutdown of most non-strategic enterprises is premature and could cause a catastrophic blow to the economy of Ukraine” warns a joint statement signed by leaders of the European Business Association, the Union of Ukrainian Entrepreneurs, the Federation of Employers, the Ukrainian Club of Agrarian Business, the IT Ukraine Association, Business 100, and the CEO Club. “Countries where the number of cases per million people exceeds Ukraine’s indicators by a hundred times (Germany – 286 patients per million people, the Netherlands – 246, Sweden – 191), use only part of the measures introduced by Ukraine.”
“The mass stopping of enterprises by the state is suicide for the economy,” Timofei Milovanov, former Economiy minister, warns on Facebook. “The intervention of the state must be justified and surgical. And finally, the mass stop of the economy will quite quickly lead not only to the deepening of the economic crisis, but also to public protests and political crisis.”
From the New York, The Wall Street Journal warns of “a tsunami of economic destruction that will cause tens of millions to lose their jobs as commerce and production simply cease…there is no amount of money that can make up for losses of the magnitude we are facing if this extends for several more weeks.” The Journal’s influential editorial page says quarantine policies must be finetuned to “include strict measures to isolate and protect the most vulnerable—our elderly and those with underlying medical problems.” The editorial concludes: “No society can safeguard public health for long at the cost of its overall economic health.”
For the first time in a century, Ukraine has only one functioning airport – Kyiv Boryspil. In a ban reminiscent of Soviet days, Ukrainians now are prohibited from taking tourists flights out of the country. With Kyiv Boryspil a ghost town, Terminal D is closed and the few arriving planes go to Terminal B, the original Soviet terminal. SkyBus service and Boryspil Express trains have stopped.
The original English version is from our partner UBN – Ukraine Business News. For more information and news archive, go to: www.ubn.news.
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