What will happen to Ukraine’s imploding economy?

Anti-government protestors sweep Independence Square on February 24, 2014 in Kiev, Ukraine.
Anti-government protesters sweep away debris in Independence Square on Feb. 24 in Kiev, Ukraine.
Credit: Getty Images

With President Viktor Yanukovych wanted by the authorities and no agreement on the country’s future, Ukraine faces a potential split between pro-Russian and pro-European factions.

But, explains Lilit Gevorgyan, a senior analyst at IHS Jane’s Insight, it’s Ukraine’s imploding economy, not a political split, that’s the real danger.

Will Ukraine split in two now?

Whilst there are fears of Ukraine splitting into two parts and even Russia’s military intervention on behalf of Yanukovych, it appears that events have progressed much quicker and the power has slipped away from the former president. Yanukovych still has pockets of support amongst the population, but his comeback would require much more than this.

What will happen next?

In the absence of Russian aid, Ukraine’s immediate external financing needs are acute. The country’s National Bank has foreign currency reserves that can cover less than two months of import. The currency is facing steep devaluation, and the immediate debt repayment is looming, including the outstanding payment for the Russian natural gas that Ukraine has been chronically falling behind.

The country’s economy has already been battered by crisis before the political unrest. In fact, its poor state was one of the key reasons behind President Yanukovych’s decision to choose integration with Russia over the EU. Russia offered more tangible support.

How will Russia react?

It may scrap its $15 billion bond-buying scheme with Ukraine, and Gazprom may cancel its 30 percent gas price discount, which went into effect earlier this year. From a Russian perspective, what has happened in Ukraine is not necessarily the best solution for it. They are aware of the extent of Ukraine’s economic troubles and could simply adopt a wait-and-see position while making sure that Ukraine will not enjoy any privileges, such as gas price cut or credit line.


Apple says its systems not to blame for…

By Edwin Chan and Christina FarrSAN FRANCISCO (Reuters) - The week before a crucial launch of its new iPhone, Apple Inc said intimate photos of…


Tallest residential building planned for lower Manhattan

A residential tower planned for lower Manhattan will soar 1,356 feet in the air -- just 12 feet shy of 1 World Trade Center. When…


Bronx man commits suicide by decapitation

A Bronx man committed suicide Monday morning in the Hunts Point area of the Bronx by decapitating himself. According to the NYPD, the 51-year-old man…


Top cops enroll in Twitter course at John…

NYPD officers are reportedly getting a lesson on the best way to use 140 characters or less. The New York Post reported Tuesday top officers…


Pop culture and prostitutes: New Toulouse-Lautrec exhibit at…

Henri Toulouse-Lautrec documented the cult of celebrity and the rise of pop entertainment in his prints, posters and lithographs — now on display at MoMA.


PHOTO: Extreme artist Eskil Ronningsbakken balances unicycle on…

Extreme artist’ Eskil Ronningsbakken balances on the edge of a cliff face at 4,600 feet – on a unicycle. The Norwegian travels across the globe, balancing over vertiginous ravines, tall…


Hear two previously unreleased Adele songs

Missing some Adele in your life? Two previously unreleased songs from the singer have appeared online.


Lincoln Center just made 'Lord of the Rings'…

Middle Earth already has sweeping vistas, a hero's journey and technology-revolutionizing special effects. But next April, the Lincoln Center will add another dimension to Peter Jackson's…


10 storylines to watch for the Giants this…

The Giants rebounded from an embarrassing 0-6 start last season, but not well enough to make the playoffs.


Michael Vick set to be weekly guest with…

Mike Francesa may need to backtrack from his harsh commentary of Michael Vick now that the Jets backup quarterback will be a weekly guest on his show.


Jets expect to make playoffs after sitting on…

The same pundits who predicted the Jets would be woeful a season ago are now eying the playoffs for this revamped team.


Antonio Allen returns to practice after concussion

Antonio Allen was cleared to practice again following his concussion two weeks ago.


In defense of making a mess during playtime

"Recipes for Play" authors Rachel Sumner and Ruth Mitchener think playtime should involve the five senses and making a mess is part of the fun.


Jason Hope helps push anti-aging efforts forward

Reporter was commissioned to write this in-depth article When it comes to age-related illness, the direction of modern medicine seems more reactive than proactive. In…


Today's Doomsday preppers: a closer look at survivalist…

Reporter was commissioned to write this in-depth article. The term “Doomsday prepper” is often associated with the paranoid, anti-government stereotype of the 1990s. The truth…


These college students think breakfast is the most…

  It should be no surprise that the city that never sleeps is also home to the most students who like to order food in…