Ukraine: where to get money for war?
The National Bank of Ukraine stated a deficit of the country's consolidated balance of payments in January-May 2014 of the year in 3,5 billion dollars against a surplus of 3,3 billion dollars in the same period a year earlier. By the end of the year, Kiev plans to attract 13 billion dollars from the IMF, the World Bank, the European Union, the USA, Japan and Canada.
The report of the Ukrainian National Bank allows you to get an idea of the sources of ensuring the balance of payments of the country, which are currently at the disposal of Kiev. According to data for May of this year, again the crucial role here is played by loans from the World Bank, the IMF and the EU. Without them, the deficit of the consolidated balance of payments would have been even greater, exceeding 4,5 billion dollars. For comparison: in the 2013 year, despite the political upheavals that began at the end of the year, the consolidated balance of payments of Ukraine was reduced with a surplus of 2,02 billion dollars.
Ukrainian National Bank describes the above source of information ends meet extremely diplomatically: "external financing of the government." However, financing from external sources is associated, as is known, with the promotion of well-defined political conditions.
Another source available to the government to replenish the treasury is government loans. However, the trends here are not bright. According to the State Treasury of Ukraine, in the first six months of 2014, this line managed to attract about 8,7 billion dollars. This is 21,4% less than what was planned by the state budget law.
The financial services of Ukraine recognize that this structure of replenishment of the treasury will continue in the coming years. In early May, the International Monetary Fund has already transferred to Ukraine the first tranche of a loan worth 3,19 billion. This allowed the government to make payments to repay existing debt.
The Ukrainian authorities hope that the recently signed Association and Free Trade Agreement with the EU will be a new source for ensuring the financial stability of Ukraine. However, its implementation will entail the emergence of new problems related to the specifics of the export orientation of individual regions of the country. After all, the economy of the eastern and south-eastern regions of Ukraine is focused on Russia, moreover, it is at risk of destruction during the punitive operation against Donbass. In the western regions, however, there is no developed industrial production capable of producing for export to the EU.
Moscow has already promised that if Ukraine ratifies the Association Agreement with the EU, then Russia will be forced to take “protective measures” in trade with it. Recalling that such an agreement has already been ratified by Moldova, the Russian Prime Minister said: “Naturally, if a set of measures develop along the same path both in Ukraine and Georgia, it will be close, similar, but, of course, taking into account the volume of trade and economic relations and the consequences for the Russian market ... Ratification can last for years or occur very quickly. But since they ratified the document, it means that they should understand that they create a completely different legal basis for relations with the Customs Union and with the Russian Federation. ”
Given the financial prospects of Ukraine, one more important circumstance should be taken into account. This is the accumulated fatigue of European society from dubious political and economic projects. The London newspaper The Guardian, in a recent editorial on the European Parliament elections, described this trend as follows: "The European elections showed that the inhabitants of the continent are generally dissatisfied with their fate." The British publication, in particular, recalled the success of the left-radical coalition SYRIZA in Greece and notes that this coalition "may become the future for Greece itself, and for Europe." 
In the circumstances prevailing in Europe, convincing European taxpayers of the need to take over the provision of the balance of payments of Ukraine is almost hopeless. In Europe, “there is a tendency to vote not only against European integration, but also against migration and impoverishment of the population,” writes well-known British historian Professor of the University of Wisconsin in Barcelona, Henry Kamen, on the pages of the Spanish newspaper El Mundo. 
But migration and the aggravation of other socio-economic problems are exactly what the Ukrainian crisis brings to Europe, aggravated by the civil war.
Ukrainian authorities have prepared and reserve option to cover the costs of the treasury. We are talking about the plans of the National Bank to hold auctions for the placement of government bonds (government bonds) "Military bonds" to finance the needs of the army. According to a source in the Ministry of Finance of the country who wished to remain anonymous, "these auctions should be held as applications are received." "Now there is a process of receiving and processing applications," - he explained. According to the available information, we are talking about bonds in “uncertificated form” for up to 1 billion hryvnia (about 85 million dollars) with a maturity of 2 of the year and an interest rate of 7% per annum.
There is reason to assume that Kiev plans to direct the funds obtained through a home loan to patch holes in other budget items. This partly explains the intensification of the “military phase of the antiterrorist operation” ... As calculated in Kiev offices, having adjusted the issue and placement of military bonds, it will be possible to use the funds received as a general-purpose financial reserve. Such is the cynical logic of the war in monetary terms.
Subscribe and stay up to date with the latest news and the most important events of the day.