Leonid Vardomsky: "The main thing for Ukraine is to achieve political stability"

Leonid Vardomsky, head of the Center for Post-Soviet Studies of the Department of International Economic and Political Studies of the Institute of Economics, spoke about how the political crisis affects the hryvna and the economic situation in Ukraine in general. With all those meetings and demonstrations that transformed into the seizures of several ministries and administrative buildings in the capital, as well as in some western and central districts of the country, none of the opposition members pay attention to the fact that Ukraine, which was on the brink of bankruptcy even before the protests, is slipping into a deeper economic crisis. Due to the political turmoil, the country has already lost $3 billion, and with every day the losses will grow. The long-term and short-term sovereign credit ratings of Ukraine are estimated as negative. The economic outlook for 2014 is becoming increasingly unfavorable: the hryvna is depreciating, inflation and public debt keep growing, and the administrative capacity of the government is inevitably reducing. With the negative economic environment, almost all Ukrainian regions are experiencing problems: industrial production declines, mining reduces, unemployment increases. At the same time the center will have fewer opportunities to provide financial assistance to the subsidized regions. The only external source of financing to keep Ukraine afloat somehow and allow it to pay the bills of the IMF, is the $15 billion that Russia promised them, 3 billion of which have already been obtained.