Ukraine’s Sickness & Europe’s Cure

“The specter of profit-seeking financiers with dollar signs in their eyes is all the Ukrainian people can expect”

The situation in Ukraine is evolving by the hour.  Right wing ultranationalists and their “liberal” collaborators have taken control of the Rada (Ukrainian parliament) and deposed the democratically elected, though utterly corrupt and incompetent, President Yanukovich. 

Former Prime Minister, and convicted criminal, Yulia Tymoshenko has been freed, and is now making common cause with Right Sector, Svoboda, and the other fascist elements, while the opposition’s nominal leaders such as Arseny Yatsenyuk and Vitali Klitschko begin to fade into the background. 

In Moscow, Russian President Vladimir Putin undoubtedly watches with anxiousness.  In Washington, Victoria Nuland and the Obama administration rejoice.  However, perhaps the most critical development of all is soon to emerge in Europe, as the forces of Western finance capital prepare to welcome Ukraine into the fold.  They will come bearing the usual neoliberal gifts: austerity and “economic liberalization.”

With the overthrow of the Yanukovich government, the $15 billion of promised Russian financial assistance to Ukraine is in doubt.  According to Moody’s rating agency, “Ukraine will require $24 billion to cover a budget deficit, debt repayments, natural gas bills and pension support just in 2014.”  Without Moscow’s continued bond purchasing and other forms of financial aid, and with pro-EU forces taking control of the country’s economic and foreign policy, the outcome is not hard to predict: a rescue package from Europe with all the usual austerity conditions attached.

In exchange for European “aid”, Ukraine will be forced to accept the driving down of wages, significant cuts to the public sector and social services, in addition to a rise in taxes on the working class and slashing of pensions.  Moreover, the country will be compelled to accede to a liberalization program that will allow Europe to dump goods into the Ukrainian market, deregulation and the further opening up the country’s financial sector to predatory speculation and privatization. 

It doesn’t take psychic powers to predict these developments.  One merely has to look at the wave of austerity in European countries such as Greece and Cyprus.  Furthermore, Eastern European countries with similar economic and historical conditions to Ukraine – Latvia and Slovenia specifically – provide a roadmap for what Ukraine should expect.

The Model of “Success”

As Ukraine’s pro-EU “leadership” under Tymoshenko & Co. (and the fascist Right) begins to eye the future, they will immediately look to Europe to address the most pressing economic concerns.  The Ukrainian people however would do well to examine the precedent of Latvia to understand what lies in store for them.  As renowned economists Michael Hudson and Jeffrey Sommers wrote in 2012:

What enabled Latvia to survive the crisis were EU and IMF bailouts…Elites aside, many emigrated…Demographers estimate that 200,000 have departed the past decade – roughly 10 per cent of the population…Latvia experienced the full effects of austerity and neoliberalism. Birth rates fell during the crisis – as is the case almost everywhere austerity programs are imposed. It continues having among Europe’s highest rates of suicide and of road deaths caused by drunk driving. Violent crime is high, arguably, because of prolonged unemployment and police budget cuts. Moreover, a soaring brain drain moves in tandem with blue-collar emigration.

The myth of prosperity to follow EU integration and bailouts is just that, a myth.  The reality is pain and suffering on a scale far greater than the poverty and unemployment Ukraine, especially the western portion of the country, have already experienced.  The most highly educated, those most equipped to take up the mantle of leadership, will flee en masse.   Those leaders who remain will do so while lining their pockets and ingratiating themselves to the European and American financiers who will flock to Ukraine like vultures to carrion.  In short, the corruption and mismanagement of the Yanukovich government will seem like a pleasant memory.

The “liberalization” that Europe demands will create massive profits for speculators, but very few jobs for working people.  The best land will be sold to foreign corporations and land-grabbers, while the resources, including the highly regarded agricultural sector, will be stripped and sold on the world market, leaving farmers and city dwellers alike in grinding poverty, their children going to bed hungry.  This will be the “success” of Ukraine.  One shudders to think what failure would look like.

In Slovenia, another Eastern European country that has experienced the “success” Europe strives for, the economic dictates of Brussels have ravaged the country’s working people and its institutions.  The Organization of Economic Cooperation and Development (OECD) issued a 2013 report in which it recommended that, as a first step, Slovenia act to “help the banking sector stand on its feet again,” adding that, “additional and radical measures are necessary as soon as possible.” 

Furthermore, the OECD recommended the full privatization of Slovenia’s banks and other major firms, despite predicting a more than 2% contraction of the economy.  In laymen’s terms, Europe recommends that Slovenia sacrifice itself and its people to the forces of international finance capital, nothing less.  Such is the cost of European “integration.”

Ukraine is undergoing a transformation of the worst kind.  Its political institutions have been trampled upon by a motley collection of delusional liberals, slick politicians in fancy suits, and Nazi extremists.  The social fabric is tearing apart at the seams, with each region searching for a local solution to the problems of what used to be their nation.  And, in the midst of it all, the specter of profit-seeking financiers with dollar signs in their eyes is all the Ukrainian people can expect. 

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Eric Draitser- Boiling Frogs Post Contributing Author &  Analyst
Eric Draitser is an independent geopolitical analyst based in New York City. He is the editor and host of and the Stop Imperialism podcast.

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  1. And, in the midst of it all, the specter of profit-seeking financiers with dollar signs in their eyes is all the Ukrainian people can expect. >>

    I wish the author was right in his predictions, but I am afraid the reality is very different. It’s like to predict that the 1933 victory of National Socialist Workers Party will bring about the plunder of Germany by Wall Street and City thugs. Ukrainian Fascists have bigger dreams than giving away their country to “international investors.” And they will take advantage of the lack of knowledge of what they are on the part of Western commentators like Mr. Draitser. I repeat what I said elsewhere: Banderovites have no bosses. They may only pretend they do if see it tactically needed. The game is not up yet, but if the anti-fascists in the South-East fail to organize militarily and, above all, to form their own organs of power to replace the existing bureaucracies, we’ll have a fascist state in the middle of Europe with the social and political dynamic similar to Italy and Germany in the 1930s. That is, the working class will be disciplined, militarized, and provided with jobs. As a frontline state in the war against Russia, Fascist Ukraine will receive open and secret support from the Nato alliance. All they’ll have to do for this is to use a thin democratic makeup. The rest will be taken care of by the corporate propaganda machine of the West.

    • I think the anti-fascist, Russia-oriented part of the Ukraine including Crimea will organize and be strongly supported by Putin. I don’t think we are going to see a fascist Ukraine. But we may see something like a civil war with NATO backing one side and Russia backing the other, that could easily culminate in nuclear war.

  2. And if the east and south return to the former USSR ie. Russia? I’m thinking the right lead west might be a small cherry given by the EU to NATO?

  3. Americans don’t want a divided Ukraine. This would significantly strengthen Russia. Besides, they may count on a strong anti-Russian Ukraine to contain Germany. In the mid-50s, the CIA and Vatican mediated a “historical reconciliation” between US Banderovites, Polish emigres, and parts of Jewish elites (Likud in Israel and Jewish hawks in the United States). Now these people or their political descendents are in power in Tel-Aviv, Washington, Warsaw, and Kiev. Americans may think that, apart from being an anti-Russian alliance, Poland together with Banderovite Ukraine could serve as a powerful counter force to “old Europe” and help the US to preserve its hegemony over the Continent. Some in Germany understand this and wouldn’t mind a divided Ukraine in hope that they could use the Banderovite state in Western Ukraine against Poland as a US stooge and eventually return the Sudetenland. But my guess is that the revanchist anti-Russian vector in German elites is stronger (Merkel). If there is any passion left in Germans it must the passion to take revenge for 1945.

  4. Extremely disturbing every which way .
    These are Vampires rising, and bode very ill.

    Russia mobilizes on the border.

    The ghosts of our fathers are restless..they know what it means when the European blood nazi goes on Jihad.

  5. This tragic “development” could have been taken directly out of Zbigniew Brezezinski´s book “The Great Chessgame” and he and the intellectual thugs around him has been stimulating the events in this direction. If we remember what did happen in the old Jugoslavia that they smashed to pieces where they managed to create a criminal ultraright regime around the facist criminals AKA the KLA guerilla I can imagine that the russiahating petty nobelman Brezezinski is standing there with a sardonic smile in his wrinkled face looking on enjoying all the violence, burning and killing all around the world. It is some kind of developed “Salvadorean Option” born in the sick brain of John Necroponte spreading all over the place !! The neo-con planning in the PNAC papers aim to destroy, to create wars, to kill, to ruin, to create underdevelopment ……

  6. I do like

    Pepe Escobar…thank you…
    All these pipelines….Nordstream….hmm.

    (Nord Stream will link Russia’s Baltic Sea coast near Vyborg with Germany’s Baltic Sea coast in the vicinity of Greifswald. The pipeline is 1,224 kilometers long.

    Based on long-term comprehensive analysis of technical, environmental and economic aspects and factors of the European energy security, the offshore route was considered the optimal solution for the new pipeline carrying gas to Europe.

    kind regards from my little island Bornholm in Denmark.

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