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Page added on April 14, 2014
US Pays Half Of Gazprom’s Overdue Invoice With $1 Billion Ukraine Loan Guarantee
With Ukraine no longer paying for Russian gaz, and with Gazprom making it clear Kiev has to a) first pay the overdue $2+ billion in invoice and then b) prepay some $5 billion in gas until the end of the year of Europe gets it, it was only a matter of time before the US Treasury stepped in and paid off part or all of Gazprom’s demands. That time is now, when moments ago Jack Lew announced a $1 billion loan guarantee for Ukraine – very much the same way that the US provided billions in loan guarnatees for the now long overthrown Mursi regime in Egypt. And in other news, many more “costly” and “damaging” US sanctions are surely headed Russia’s way any second now.
From the Treasury:
Treasury Secretary Lew Announces Signing Of $1 Billion U.S. Loan Guarantee Agreement For Ukraine
WASHINGTON – Today, the U.S. Treasury Secretary Jacob J. Lew announced the signing of a $1 billion loan guarantee agreement for Ukraine. This guarantee, when completed, will complement the Government of Ukraine’s International Monetary Fund (IMF) reform program and underscores the United States’ commitment to Ukraine.
“The Ukrainian people have demonstrated tremendous courage as they have charted an independent course for their country and demanded a government that truly reflects the will of the people. The United States has been at the forefront of building international support for Ukraine, and holding Russia accountable for its violation of Ukrainian sovereignty and destabilizing action,” said Secretary Lew in his remarks at the U.S. Treasury Department today. “I would like to congratulate Minister Shlapak on the progress he and his team have made in putting in place a comprehensive economic reform program together with the IMF. The United States very much wants to see Ukraine prosper, and we will continue to stand with the Ukrainian people as they move forward to realize their long-held aspirations.”
The $1 billion loan guarantee is part of a U.S. bilateral assistance package that also includes technical assistance to help Ukraine return to a path of economic recovery. This loan guarantee will bolster the Government of Ukraine’s ability to provide critical services as it implements reforms, while protecting the most vulnerable Ukrainian households from the impact of the necessary economic adjustment.
Secretary Lew and Ukrainian Finance Minister Oleksandr Shlapak held a bilateral meeting before today’s announcement to discuss the ongoing situation in Ukraine and Ukraine’s progress on its economic reform plan.
The United States will continue to urge its international partners to take immediate steps to bolster the IMF assistance package and move forward with bilateral aid and technical assistance.
And the inevitable photo op:
12 Comments on "US Pays Half Of Gazprom’s Overdue Invoice With $1 Billion Ukraine Loan Guarantee"
Arthur on Mon, 14th Apr 2014 3:19 pm
And yet another freshly printed one billion dollar pumped into the world’s financial system out of thin air against interest until Kingdom comes.
Davy, Hermann, MO on Mon, 14th Apr 2014 3:34 pm
Smoke and mirrors with magic tricks. Helicopters with bags of money hopefully marked with a red cross so they will not get shot down buy Russian Migs. I think it would be better if they would just offer lots in Detroit for a wave of Ukrainian immigration. That would kill two birds with one stone.
rockman on Mon, 14th Apr 2014 3:36 pm
Arthur – I’m not sure about that. The US govt doesn’t create dollars out of the thin air…the fed does buy buying US bonds. I would imagine this “loan guarantee” basically shows up like another bond per se on the US balance sheet. Someone is going to transfer the equivalent of $1 billions in some country’s currency to Russia when the loan is granted to the Ukraine. In either case the Russians get $1 billion in US $’s. That should take some o the sting from those “sanctions”.
Boat on Mon, 14th Apr 2014 4:01 pm
What a waste of money. the US should give Ukraine 1 billion worth of insulation so they don’t waste as much.
GregT on Mon, 14th Apr 2014 5:09 pm
“The $1 billion loan guarantee is part of a U.S. bilateral assistance package that also includes technical assistance to help Ukraine return to a path of economic recovery.”
Since when does piling on more debt, on top of debt, lead to recovery? Sounds ridiculously familiar.
So, when I can’t afford to pay MY home heating bill, because my mortgage payments are too high, and my wages are too low, I should go out and get another loan to pay off half of what I owe to my utilities company, and all of a sudden I will be on the path to economic recovery?
What a load of nonsense.
Walt on Mon, 14th Apr 2014 5:22 pm
Davy, those lots in Detroit come after their all signed up for the Affordable Care Act.
Arthur on Mon, 14th Apr 2014 5:53 pm
Fortunate and unexpected development:
http://www.spiegel.de/politik/ausland/ukraine-praesident-will-referendum-a-964265.html
Kiev proposes referendum about the future of the country, to be held simultaneously with the upcoming May elections. Smart move and could lead to defusing the situation. In reality there is NO majority in the country for a split, not even in the east. Only the Crimea had a clear majority, there is no additional potential for more of these stunts. The necessary condition for defusing the situation is to give the Russian speaking Ukrainians the feelings that their concerns are taken serious.
simonr on Mon, 14th Apr 2014 6:59 pm
Why was the morsi government a regime ?
Arthur : not sure that this will appease the Russian minority, as they will just see the result as gerrymandering (right or wrong), nice try by Kiev though
J-Gav on Mon, 14th Apr 2014 8:49 pm
Normally, there would be some sort of guarantee, you know, collateral, behind such a loan, yes-no? That wouldn’t by any chance be the suckered American public (aka happy tax payer) would it?
penury on Mon, 14th Apr 2014 9:45 pm
Really a bargain, The new government only cost the U.S. 5 billion for the protestors. Now for a scant billion we get a referendum which if accurately held “our” “Yats” will lose. The Ukranian people do not care for the U.S. and NATO dictating what batch of crooks forms a government, but they are vocal in the fact that the U.S. appointed people have never been elected to anything.
rockman on Mon, 14th Apr 2014 10:09 pm
Boat – The problem with giving them insulation is that it won’t run the steel mills upon which a huge chunk of the Ukrainian economy depends.
Makati1 on Mon, 14th Apr 2014 11:30 pm
Two corrupt, psychopath led, illegal governments making deals to enslave their serfs … er … citizens. As I see it, this is another log on the civil war fire.