Havrysh's gloomy prognosis

Several days ago seasoned Ukrainian politician Stepan Havrysh was interviewed on 'Radio Svoboda'.

Until last month he was Deputy Secretary of the Ukrainian National Security and Defence Council, which was all but neutralised by Yanukovych after he was elected president.

Havrych has been around the top politicos for many years, and although he is now out of favour with Yanuk, he opinions are nevertheless worth listening to.

Here is one portion of his interview:

R.S. How realistic will it be for the authorities to keep the socio-economic situation under control until the next elections, taking account of the second wave of the [global] crisis and problems connected to the price of Russian gas?

S.H. - There are dry and not very encouraging statistics. Our current external debt (public and private) is about $135 billion, our budget deficit - more than $30 billion. External debt - which we need to return next year, is almost $ 7 billion. Clearly, in these conditions, without external borrowing, which we are unable to do [we have a problem]. And [as] the IMF has ceased cooperating with Ukraine, this is obvious. The World Bank under these circumstances will not give any money - [and] will not help.

In 2008 there were 17 Western banks which had 40% of the banking system assets working in Ukraine. Today, most of them have left Ukraine, and capital repatriation by foreign investors continues. Notice that Euro 2012 has not attracted major European or American or Chinese investors to Ukraine. Privatization on which we rely takes place between a handful of groups who [deliberately] devalue these assets.. -

R.S. What could be way out of this situation? A change of government? Or a handover of the gas transportation system?

S.H. We stand between the surrender of key assets, and technical default. - One solution really could be selling off of the gas transport system, ie, key assets. And this solution I think, is being actively discussed by the government. The resignation of the government will give only temporary political respite, for 2-3 months, not more. The new government can do nothing without external borrowing, without significant reforms which do not exist ... We stand between surrender of key assets and the technical default of the state.