So, our anxious neighbors in Ukraine are again facing bankruptcy, this time due to the resignation of the head of the National Bank of the country, Jacob Smoly, at least as stated in the German newspaper Handelsblatt, and we must pay tribute to the German newspaper, they have reason for this - and quite weighty - it’s even quite imagined. The reason for, to put it mildly, “current worries” is quite easy to understand: last week the National Bank of Ukraine, through JP Morgan and Goldman Sachs, began subscribing for the placement of twelve-year Eurobonds with an interest rate from 7.3% to 7.4%. 

By the middle of the week of the current, on Wednesday, July 8, the issue of these bonds was supposed to be placed on the London Stock Exchange. But after the resignation of Smoly, who was “tied” to all agreements with both London and Goldman Sachs and JP Morgan, all these operations were immediately, almost in an emergency, suspended, if not terminated. And this would be all nothing — the “suspension” has not yet collapsed — but investors who trusted Smoly’s opinion (including the most curious one, the so-called “internal but external”, that is, “offshore companies”, were sharply worried "- financial life in the vast expanses of the former Soviet Union is sometimes so bizarre that it’s not even clear what else to say about this).

And urgent “borrowed” money to Ukraine right now is not even the word that is needed.

She needs them more than ever.

There is such an illusory impression that without attracting these, albeit frankly speculative, resources, even in the short-term historical perspective and even from the point of view of the rather crafty “Ukrainian economic statistics”, it certainly will not live. There, now everything is just so "thin" and everything is so balanced "on the verge of a nervous breakdown" that anything can collapse this flimsy design.

Including such a seemingly routine as the "sudden" resignation of the head of a native national bank: how many of them had already changed in these unfortunate lands and who even counted them.

However, when Smoly, who served as head of the National Bank since March 2018, wrote on his resignation on Wednesday, explaining this as “systematic political pressure” on the bank, and when this resignation was accepted by the Verkhovna Rada, European economic partners took it not just "Serious", but almost a "catastrophic" signal. And as a “blow to Zelensky, by the way.

And they - we repeat - is quite understandable.

Just to make the picture more or less clear.

Last year’s notorious “postponements for elections” ended, the carriage turned into a pumpkin, and only for the current 2020, young Ukrainian democracy needs to somehow refinance $ 17 billion only from old credit resources that Zelensky inherited from his predecessors. And this is not even going to end the trouble.

Recall that this year the Ministry of Finance of our southwestern neighbors expects to receive $ 3.5 billion from the International Monetary Fund under the “new program” (the old, much more profitable and relevant for Independent, has long been curtailed), plus € 1 billion in as macro-financial assistance from the European Union and another $ 1 billion from the World Bank. And even if they manage to get these funds (at least there are serious doubts about the IMF package, which are a little lower), then, with all the obviousness, this will not solve the problems of Ukraine even in servicing current debt.

Meanwhile, IMF credit assistance to Ukraine - and this is also an open secret - is also now under a rather serious question.

And here it is not even clear what is more, politics or economics. Too much the International Monetary Fund is diligently trying to achieve what remains legally competent in this unfortunate territory. And his demands in this sense are becoming tougher and tougher, already somewhere and on the verge of hysteria. And even in all the obedient economic will of the West, it becomes harder and harder for the native government to simply execute them: there’s nothing to come up with, many analysts predict serious social explosions in Ukraine in the fall, when the population begins to receive new, with fresh prices, payments for the local housing and communal services .

And the Ukrainian government simply can’t even technically perform the increase in utility bills (including absolutely indecent gas prices for the population, despite the objective negative dynamics of prices on world markets).

This is a strict requirement, which determines the very “technical” one (it will be used exclusively to pay off debts to Western creditors and the IMF in the first place) a loan from the International Monetary Fund, which simply cannot be obtained.

Although in fairness - all this is so, little things.

The main problem of Ukraine now is not that it has nowhere to lend money: this is a situation that can be resolved, albeit with serious financial and social (we already wrote about the “IMF conditions” above) costs.

The problem of modern Ukraine is that there is nothing to give them purely physically trivial, including from a distant historical perspective: now everything is like in a fairy tale - the further, the worse. And even the most inhumanly greedy and risky lenders of this remarkable economy of its kind and the country as a whole already understand this perfectly. Simply, you know, there is such a basic concept of “state revenue” and the related concept of “tax base”. So, in the "case of Ukraine" - at least on the scale of self-respecting territory - this "base" is almost gone.

Too diligently in the last post-revolutionary years they achieved it: “Euroassociation”, which even Professor Yanukovych was terrified of, having understood. By the “IMF Recommendations”, which has ceased to rely on the Ukrainian state and has begun to banally rob the remaining funds from the population (the increase in tariffs is about that, the IMF is not villains, it’s simply important for them to understand where they will get the money back from - there is no hope for the local state will rob people).

And of course, completely uncompromising Ukrainian corruption and theft: we once wrote that in the West Ukraine is already beginning to be perceived as “white Africa”. So here. Their Ukrainian counterparts may already be teaching African crooks ...

Actually, this is not so important.

The only important thing is that the native treasury is not just ruthlessly and hopelessly empty - it also has nowhere to fill from besides the next “borrowings”.

But “borrowings” —and no one even hides this — are issued to young East European democracy exclusively in a targeted way: to restructure previous debts. So, mathematically, the very "vicious circle" is inevitable, which again, with all inevitability, will turn into a funnel in which everything will disappear.

And there are only two “exits”, as the famous saying goes, once popular in the territory of the “aggressor country”: either endless horror, or terrible end. Actually, nothing particularly new - this is not even higher mathematics, it is banal arithmetic for children with developmental delays. At least, a year ago, right after Zelensky’s victory in the elections, someone Igor Valerievich Kolomoisky spoke quite openly and quite officially.

And the current crisis with Eurobonds and Jacob Smoly, who left the National Bank of Ukraine, is just a very alarming current symptom of a completely systemic and chronic, possibly even fatal disease, which in modern Ukraine there is nothing to cure. And which is much more dangerous for her than any current COVID.

And by the way, that’s why, I think, we need to take an extremely responsible approach to the information that Ukraine is preparing to unleash massive hostilities in the east again - this method of “nullifying loans” was seriously considered even under Poroshenko, though, then, fortunately not needed.

Current ones can foolishly and "try their luck."

The benefit of the victory in this war, today's Kiev regime, in fact, will not really be needed: it will be completely satisfied with the status of “government in exile” and the naive attempt to “transfer debts to the winners”. And for this, Kiev just needs a lot of blood and “patriotic” rhetoric. And this is one of the only, and, alas, continuing to be in demand goods that modern Ukraine can only mass produce.

The author’s point of view may not coincide with the position of the publisher.