World View: US, IMF, EU Facing Bailout Requests from Ukraine, Greece

This morning's key headlines from

  • Russia says Ukraine chaos is a 'real threat' to its interests
  • Ukraine says that it needs a $35 billion bailout
  • Bitter dispute with troika over Greece's bailout needs

Russia says Ukraine chaos is a 'real threat' to its interests

Government has essentially disappeared in Kiev, the capital of Ukraine, with such functions as are available being performed by activists who participated in the overthrow of president Viktor Yanukovych, with the support of the parliament. These activists mostly represent ethnic Ukrainians and are mostly pro-European and often bitterly anti-Russian, blaming Russia and Ukraine's ethnic Russians for Yanukovych's brutal violence that killed dozens of young activists. The activists have issued an arrest warrant for Yanukovych, accusing him of "mass killings" of civilians. 

There are reports that the parliament is considering a law that would remove Russian as one of Ukraine's official languages, and some even want to go so far as to remove citizenship status from ethnic Russians in Ukraine. This has sparked anti-Ukraine nationalism in Russia, where there are discussions of granting citizenship to ethnic Russians from Ukraine.

On Monday, Russia's prime minister, Dmitry Medvedev, said that what is going on is a "real threat" to Russia:

We do not understand what is going on there, there is a real threat to our interests and to the lives and health of our citizens. 
Strictly speaking, today there is no one there to communicate with. The legitimacy of a number of power bodies is in huge doubt. If you consider people in black masks strolling through Kiev with Kalashnikov rifles a government, then it will be difficult for us to work with such a government. 
Some our foreign, western partners hold the opposite opinion, they think these people to be legitimate power bodies. I do not know what constitution and what laws they have been reading, but I hold that it is some sort of conscience aberration when you call something legitimate while in reality it is a result of an armed uprising.

Yanukovych has disappeared, and his whereabouts are unknown. According to some reports, he was last spotted in Balaclava, a town near Russia's Sevastopol naval base in Crimea on the Black Sea. According to the reports, he drove off with a 3-car convoy late on Saturday night and hasn't been seen since. Ria Novosti and Russia Today and Reuters

Ukraine says that it needs a $35 billion bailout

Ukraine is on the brink of default, following years of massive government corruption and government overspending. In December, Russia promised a bailout loan of $15 billion, but that was before president Viktor Yanukovych was overthrown. 

There are some reports that Russia is considering sending troops into Kiev, but almost everyone considers that highly unlikely as Russia can make Ukraine suffer financially without risking armed conflict. Ukraine's economy depends heavily on natural gas from Russia's Gazprom. Ukraine owes Gazprom $3 billion, and Russia could cut off all gas transmissions at any time. Russia could also cut off Ukrainian exports to Russia. 

Ukraine says that it's going to need a $35 billion bailout for 2014 and 2015. It seems likely that the U.S., the IMF, and the European Union are going to be asked to provide that bailout. Bloomberg

Bitter dispute with troika over Greece's bailout needs

History is repeating itself as the "Troika" of organizations bailing out Greece -- the European Commission (EC), the European Central Bank (ECB), and the International Monetary Fund (IMF) -- are in a bitter dispute with Greece's government over the amount of bailout money needed by Greece. Greece claims that it needs only 5.5 billion euros, while the Troika has done an analysis and comes up with a figure close to 20 billion euros. 

One reason that Greece needs more money than anticipated is because one of its austerity measures -- the reduction of lump sum pension payments to civil servants -- has been declared unconstitutional by a Greek court. The Troika will demand that Greece take other measures to reduce its debts. The disagreement between Greece and the Troika is mostly internal right now, but if it's not resolved quickly, it will become a very big, public fight. Greek Reporter and Kathimerini

KEYS: Generational Dynamics, Ukraine, Kiev, Viktor Yanukovych, Russia, Dmitry Medvedev, Balaclava, Crimea, Sevastopol, Troika, European Commission, European Central Bank, International Monetary Fund, Greece 

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