Tensions in the Ukraine could worsen as the government enforces tough austerity measures conditional on the IMF’s bailout.
The Ukrainian government has agreed to a fourteen-to-eighteen billion dollar bailout package with the IMF that could unlock a further line of credit up to twenty seven billion dollars within the next two years. There will be some tough conditions attached, and no debt relief. The IMF wants Kiev to adopt austerity measures, including:
- Tax hikes.
- Cuts in social services and subsidies.
- Floating Ukraine’s currency, the hryvnia, on foreign exchanges, which will sink its value even further.
Economic analysts expect these measures to hit ordinary citizens the hardest. Around one out of four Ukrainians already live below the international poverty line. Under the IMF program energy will cost more too. Michal Bardavid explains how the country’s ordinary citizens will likely bear the costs.
Ukraine\'s IMF BailoutMichal Bardavid reports from Ukraine where tough austerity measures are ahead for the country.
For more on the economic impact of the recent boarder disputes, Anders Aslund, Senior Fellow at the Peterson Institute, joins Phillip Yin in CCTV America’s Washington bureau.