Thursday, December 11, 2014

Economic Winter in Ukraine:Western Allies Distracted and Silent

Politicians are the same the world over.  Dealing with real issues in a principled and economically rational way just leads to attacks from noisy, vested minority interests, or 'activists.'  Their self-interest lies only in their narrow agendas: the pols get instant support and the majority either doesn't know or doesn't care.  What could be better or safer?

So, Europe is worried about climate goals and ECB pronouncements, while in the U.S. we are also worried about climate pacts and yet another government funding impasse. Russian President Putin continues turning the screws in Ukraine, maintaining his currency with his nationalist supporters.

With signs of a better business climate in the U.S., a favorable Ukrainian exchange rate, an idled Ukrainian export capacity in sectors like agriculture and heavy machinery, and an avowed desire to open European markets to exports, this should be a time of optimism for Ukraine.

Instead, we still have the self-proclaimed Donetsk People's Republic in place.  Gas has flowed to Ukraine, the first shipments since June, but these have been prepaid, further draining currency reserves which must be dangerously low.

As an exportable machinery manufacturer in Ukraine tells the Journal: why worry about exporting machinery when I don't know how to find a customs official?

Germany, which seems to have become even more inward looking than the U.S., should be taking the lead, but after reported talks with President Putin weeks ago, Chancellor Merkel is probably off to holiday parties.

Ukraine deserves better from the U.S. and the European Union.

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