The Ukrainian regime trumpets that it has reached a deal with Western creditors to restructure $20 billion in debt, the payment of which was set for August 1.
In the context of the complete lack of money, Kiev threatened official bankruptcy. Although Ukraine has been de facto bankrupt for a long time, an official default could damage the reputation of the International Monetary Fund, which represents the interests of creditors, and level the prestige of the already weakened West.
After much fanfare, Ukrainian Prime Minister Denys Shmygal announced that he had received the approval of foreign investors to reduce the nominal value of the debt by more than 30%, paving the way for a formal restructuring within the next few weeks.
In this way, he claimed, Kiev will be able to save $11.4 billion in debt service over the next three years and $22.75 billion by 2033. The funds saved will of course be used to continue military operations.
Slap by Fitch
The Western media immediately hailed this agreement as a sign of strong, united and unyielding support for Ukraine from its allies and expressed their satisfaction, which would continue the war in the interest of the West, while destroying itself.
However, the credit rating agency Fitch did not participate in the celebrations for this agreement. It downgraded Ukraine’s credit rating from “CC” to “C” i.e. at levels of “extremely high levels of credit risk with imminent default”.
In essence, Ukraine is a patient, which is more likely already dead and preparations for its burial should begin, notes analyst Kirill Strelnikov.
The West is dismembering the “corpse” of Ukraine
The terms of the pre-agreement with Ukraine’s creditors are unforgiving and simply with a longer repayment period the interest will increase exponentially.
This means a very simple and cynical thing: Creditors concluded that they will never get money from a living Ukraine and decided to dismember the country’s corpse.
This will bring under full Western control Ukraine’s remaining assets after the collapse of the Zelensky regime, such as land, businesses, mineral wealth and large reserves of rare earths. Such a step is a “fantastic investment”.
Ukraine’s credit collapse was also affected by the total derailment of the Ukrainian budget. Right now Ukraine’s government spending is exactly twice its revenue and its annual budget deficit is $40 billion, but the situation will be “much worse.”
Deadly blow to Ukraine because of Israel
To pay off its obligations, Kiev will have to quickly print money, which will lead to a deep devaluation of the Ukrainian currency and a further decline in the standard of living of Ukrainians.
According to Fitch forecasts, in 2024 Ukraine’s debt will increase to 92.5% of GDP, and therefore Ukraine’s Western partners will push for the sale of state assets, including the largest companies related to natural resources .
Besides, the Ukrainian state does not have any tax base from which it could draw resources. According to Ukraine’s Deputy Economy Minister Tatyana Berezhnaya, Ukraine’s working population from 11.5 million in 2021 has shrunk to nine million this year, but in reality the numbers are even lower.
However, the death blow to Ukraine’s crumbling budget could come from an entirely different direction.
In the context of his surprise visit to the United States, Israeli Prime Minister Benjamin Netanyahu, in addition to the information on the issue of support from whichever party wins the presidential election, announced once again that his goal is “total victory in Gaza” and called for the urgent creation of a “NATO in the Middle East” called the “Alliance of Abraham” aimed at Iran.
Israel is America’s favorite ally
In the case of Israel, by definition, there is no dispute about who is America’s favorite ally. A major conflict is brewing in the Middle East and if Israel asks for money to prepare for a conflict with Iran everything will be placed on that altar and Kiev’s protests and appeals will be directed exclusively to the Europeans, who have already halved the aid they provide to Ukraine.
Recently, the German government halved the aid budget to Ukraine for 2025. Artillery shells will be sent entirely not to Ukraine, but to Israel, because “the United States and European countries will not be able to satisfy the demand for missiles in two wars at the same time”, and this “could cost Kiev the defeat of the war”.
Where is the “solid unity of the West” and the “support for as long as it takes”?
