Thursday, February 26, 2015

Energy Wars: Ukraine People Caught in the Middle

We have the term currency wars everywhere these days. Now perhaps "energy wars" will become the new popular phrase. The Ukraine is a bizarre mess as we tried to say in this earlier blog article. Things seem to just get worse there. Now Russia is saying they may cut off gas supplies soon and it may impact Europe. The Ukraine is cutting off gas to the eastern areas under pro Russian control.

Watching all this on the sidelines is the IMF. They have to be wondering how much worse this is going to get. They are already in for many billions to the Ukraine. Now, because things are getting worse, they say they will need $40 billion more for the Ukraine to avoid a default. But now the Ukraine is saying they need the funds urgently and even $40 billion will not be enough. The currency is in a free fall as well. If the IMF really does send in more billions, how much of that will end up going to Russia (who is under sanctions from the west).

Below are several recent articles on all this. Below each link is a short quote or summary comment.


CNBC: Ukraine desparate for IMF aid as money runs low

"Although the $40 billion aid package was substantial, Ukraine could need more, the finance minister said.
"This package is enough to stabilize the situation but if we are going to return to growth, if we are going to rebuild and regain access to our territory we are going to need something much greater and much more support."
"Russian energy company Gazprom said Tuesday it may halt natural gas deliveries to Ukraine within two days because of late payments."
"Ukranian partners do not acknowledge the debt, although being billed according to active contract, Minister of Energy of Russia Alexander Novak says."
"As Russia warned Ukraine on Tuesday that it could run out of natural gaswithin two days because of a dispute over payments, Britain said it was sending military trainers to aid Ukrainian forces while European diplomats labored to patch up a flagging peace agreement in eastern Ukraine."
Ukraine came under greater economic pressure after unexpectedly banning most currency trading and then abruptly reversing course, wreaking havoc on the hryvnia, just as a truce in the east took hold on Wednesday with no combat fatalities reported.With the long-awaited ceasefire coming into force, Russian President Vladimir Putin once again threatened gas supplies for the fourth time in a decade if Moscow did not receive advance payment.
"Ukrainian authorities decision to halt gas supplies to Donetsk amid the ongoing humanitarian catastrophe occurring there "bear the hallmarks of genocide," blasted Russia's Vladimir Putin during an awkward press conference with Cyprus' President Nicos Anastasiades (who he had just agreed bilateral military and trade deals with)."

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