Assassination attempt at the hryvnia

When The Day wrote about the trade blockade of products made in Ukraine by Customs of the Russian Federation, we noticed that it is not, in fact, a trade war. And its purpose is not confined to the forcing of the Ukrainian business to lobby the change of the integration course, as it was interpreted by almost all the Ukrainian media. The game that the Kremlin started against the official Kyiv, namely against the pro-European Yanukovych, is more sophisticated. More arguments appear that prove this because demarche of Russian customs officers is only the first step of a multimove game aimed at pushing Ukraine into the abyss of economic and, thus, social problems. The stake is made at the presidential election of 2015. Russia understands that it is loosing the game called “November – Signing Agreement between Ukraine and EU.” That’s why they launch an attack ahead of the curve. This means a blow on Ukrainian economy at the time, when it is most vulnerable – during the implementation of the Agreement on Free Trade Area with the EU. Turbulence that will seize the Ukrainian economy due to the introduction of the rules and mechanisms unusual for us, reinforced by unfriendly actions of our neighbor, might cost rating for a pro-European candidate for presidency in 2015 and will play into hands of those, who will praise the “brotherly union.” We need to get ready.

In our opinion, the chain will unfold as follows. The first phase (has been, in fact, implemented already) is to stop (even at cost of loses for Russia) Ukrainian production. Knowing, how diligently the tax authorities in Ukraine are filling the state budget today, it is not difficult to predict what consequences a shortfall in planned business profit for at least a week might lead to. Ukrainian business has bravely held, and there are still those companies that continue to hold, the front. However, this courage will most certainly result in negative figures in the financial statements, therefore, in the emptiness of the pockets of their respective owners. In order to close the hole in the budget, the government will have to ask the business to bite the bullet and pay the planned tax. This will definitely cost them loses in rating.

The second phase has been described by Yevhen Shpytko, director of “Real Economy” project, on his page on the website “Ukrainska Pravda.” The expert wrote about hryvnia shortage, which will be stirred up by Russian banks. Unfortunatelly, The Day does not not yet have any information that would confirm or refute this hypothesis. However, we view this as an option worth considering in the light of the “communication” tradition of the relations between business and the government in the Russian Federation. Besides, the European media, as well as the Ukrainian ones, “hunters for the money” (bloggers’ community is actively reporting about “censorship instructions” from the Kremlin, or from Arbuzov, nobody has any doubt that the increased number of publications about Ukraine’s financial problems has been ordered) actively report information about “financial” default of Ukraine, thumbing the topic of debt and reduction of gold reserve. It is not hard to guess how people and business respond to this – by making “reserves.” Which means that the hryvnia that can’t boast about a large turnover, will have even less of it. While the economy will be experiencing shortage, because it will feed on extremely expensive nourishment. In the situation of the hryvnia shortage, the rates on loans will go up.

In the article “Time to Look for compromise” from August 29, 2013 The Day’s issue No. 49 we have briefly outlined the third phase that we will face – it describes the “brotherly assistance” that might be provided by our neighbor during economic and financial turmoil in Ukraine, which would have been caused by it.

It is not hard to predict what rating pro-European Yanukovych will have in the light of this during the presidential election campaign in 2015. As well as the rhetoric of a pro-Russian candidate in the election.

But why does the National Bank of Ukraine say nothing to this? What is the SBU doing? And, what, after all, is our counterintelligence doing?

The Day has addressed the National Bank of Ukraine with a request to provide a professional comment of refutation or confirmation of each thesis suggested in Shpytko’s blog, actively quoted by a number of Ukrainian media. We are expecting a response. And in the meantime, economist Andrii NOVAK told The Day about how Ukrainian government should have reacted and what it should have opposed to the game imposed onto Ukraine by Russia.

“In order to mitigate the negative media attacks, we need an information counter attack. This calls for appropriate government policy, which we don’t have in Ukraine, not only at the level of economy, but also at the level of the humanitarian sphere. Perhaps, this situation will draw the attention of the authorities to this issue and such policy will be introduced. After all, there is a great number of external provocations, even the case with the English soccer fans, and everyone understand what it is and what it is for, but nobody does anything to provide a professional assessment of this. This can be explained by extremely loyal attitude towards our Eastern partners, caused by fear of tougher crackdown in customs offices. After signing of the Association Agreement with the EU, Ukraine will communicate with the Russian Federation from an entirely different economic and political disposition. After that, any trade complaints to us will be treated as a claim to the EU. Even now, when we have not signed anything yet, the response of the EU states in the most recent trade dispute with Russia was clearly on the side of Ukraine. Since November our relations with Russia will be similar to those that it used to have with the Baltic states when they announced their intention for European integration. Back then Russia applied even stronger attacks to them, but all the conflicts ceased once they became a part of the EU.”