Inventor wrote:
Other than ongoing costs and recent unpaid bills, the Ukraine has $140 Billion in long term debt, most bearing more than 6%.
So interest only payments are $9 Billion a year.
Both the IMF and the EU have said more loans will have to be used to pay off outstanding loans.
Economic adjustments are being demanded, raising the price of gas, fuel, food, and cutting government benefits, payrolls and pensions.
Also the EU trade deal calls for them to buy from Europe, not the cheap supplies they have been getting in trade with Russia, which has been over $4 billion. Ukraine goods are now barred from Russia, their largest trading partner.
Even seen as a trade war, Europe has little to gain from the Ukraine Market, and a lot to lose in Eurobonds.
The effects on Ukraine are worse. The Europe IMF cash flow stops, and the Russian gas and food stops.
It is one of the best grain fields on earth, and the whole country needs to be plowed, fertilized, planted, about now. That is a lot of diesel, tires, tractor parts, fertilzer, seed. Labor needs to be paid. Even more energy and labor is needed to harvest and store the crops.
Their main source of income is in doubt.
Even with the loans as investment, discounted fuel prices, Ukraine income has been dropping for decades. Their cost of production is high, with many small farms.
One bad year could bankrupt everyone.
The time to fight a famine is before it starts.
This is why I think the country will end up breaking in half. Ukrainians would like to get into the EU because they feel it will relieve them of some of the burden. The door was slammed in their faces.