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.


Sprint and T-Mobile offer further price discounts

Sprint unveiled a plan on Thursday that gives subscribers access to unlimited data for $60 a month, the industry's cheapest unlimited data offering.


Hundreds pay it forward at Florida Starbucks in…

The spontaneous chain of kindness continued for about 11 hours, totaling 457 transactions by the time it ended.


Weather system east of Caribbean could turn into…

An area of low pressure located east of the Caribbean Sea has a 50 percent chance of becoming a tropical depression or storm in the next 48 hours, U.S. forecasters…


U.S. hospital to discharge doctor treated with experimental…

An American doctor who contracted Ebola treating victims of the deadly virus in Liberia has recovered and will be discharged on Thursday by the Atlanta hospital that treated him with…




Review: 'When the Game Stands Tall' is both…

The high school football saga "When the Game Stands Tall" fumbles around for a focus while Jim Caviezel offers the most low-key coach in history.


Girlfriend in a coma: Chloe Grace Moretz

Chloe Grace Moretz is the best cheerleader "If I Stay" could ask for. As the star of the film adaptation of the successful YA novel…

The Word

The Word: Summer lovin' for Zac Efron and…

Ah, the summer romance. So intense, so fleeting. With Labor Day fast approaching, it should come as little surprise that the incredibly surprising romance between…


Fantasy football draft guide: How to draft your…

Many are wondering if we’re entering a new age in fantasy football drafting — one where running backs take a backseat.


Jets vs. Giants: 3 Giants storylines to watch

The Giants have plenty to work on as they reach the dress rehearsal preseason game Friday night against the rival Jets.


Jets vs. Giants: 3 Jets storylines to watch

Metro looks at three Jets storylines to watch as they play the Giants Friday.


Giants expected to work Corey Washington into first-team…

The day of reckoning for the Giants' fringe players will fall upon them Friday night against the Jets.


Big weddings may lead to long-term happiness

Dreaming of a big wedding? A new study indicates that the longer your guest list, the happier you’ll be in the long run. l A…


Online dating for every generation

Frank Jackson and his mother Maggie are like lots of modern families: They have dinner together regularly, keep each other updated on their lives —…


Going green could be the key to getting…

If we could just pursue the things that would actually make us happy, we could help the environment too, according to a New York researcher.…


Siren: A new dating app that puts women…

Online dating can be brutal, especially for single women. Noting that many women hate wading through inappropriate messages and photos, two tech entrepreneurs decided to…