It was already understandable in the spring this year that Ukraine was in for a boiling autumn. The aspiration of the Ukrainian leadership to sign the Association Agreement in November this year at the Vilnius Summit meets with the ever harsher reaction on the part of Russia. And its explicit pressure on Ukraine in the commercial aspect is, obviously, only a beginning. Attempts to destabilize the economic and political situation in Ukraine should be anticipated. I do not exclude also the attempts to discredit President Viktor Yanukovych with an event which would make the Agreement signature impossible.
It becomes more obvious that one of the mechanisms of such a destabilization of the economic situation in Ukraine is an endeavor to provoke panic at Ukraine’s foreign exchange market. The extreme increase in the number of articles in the Ukrainian mass media which prognosticate an unavoidable devaluation of the hryvnia looks like a thoroughly premeditated propaganda campaign. And although the situation in the Ukrainian economy does not look very optimistic but there are not any objective reasons for the collapse of the national currency exchange rate. The balance of payments remains positive, citizens’ deposits in banks increased by 52.9 billion hryvnias, including 50 billion in the national currency.
But the main argument in favor of the forecast about the depreciation of the hryvnia is the decrease in the gold and foreign exchange reserves. Indeed, as of September 1 they amount to only 21.7 billion US dollars and decreased in the current year by 2.8 billion US dollars. But this decrease was mainly caused by the repayment of Ukraine’s sovereign external debts. That means that there is basically no capital decumulation of the reserves taking place. And the ratio of the sovereign debt to GDP is less than 40%. That is, Ukraine is far from the default condition.
So now Ukraine needs a clear message on the part of the EU countries that they will not tolerate the economic pressure on Ukraine and will be ready to facilitate obtaining loans from the IMF and the ECB, which will nullify Russia’s attempts through the propaganda campaign to destabilize the foreign exchange market along with the whole economy of Ukraine.
Such facilitation may not be necessary at all. However, if Europe takes a firm stand on the issue, any grounds for panic will disappear both on the part of investors and creditors and on the part of Ukrainian citizens as well.
The determination of the European countries in being eager to give Ukraine a hand has to show everyone both in Ukraine and in Europe that the main player in Europe is the EU. And the level of the EU cooperation with Ukraine will be defined by these two parties and not the third one.