The rapid succession of events in recent days places the country in front of a delicate political and economic transition. A government of national unity will be appointed to govern this phase, while new presidential elections have been announced for May 25th. It remains to evaluate the speed and effectiveness with which the country will be able to normalize the level of political confrontation.
The European Commissioner for Economic Affairs Olli Rehn announced the preparation of a aid plan to be implemented jointly with the IMF. According to the statements of the Minister of Finance of Ukraine Interim, the country will need aid of 35 billion dollars in 2014-2015. In the absence of corrective measures and a rapid agreement on the EU-IMF aid programme, the country risks a serious liquidity crisis, also in view of the foreign debt repayment plan expiring in 2014 (Ukraine will have to face payments of around 19 billion dollars) against the scarce availability of hard currency (in February 2014 international reserves amounted to 17 billion dollars) and the possible freezing of the agreement with Russia.
The deteriorating political and economic situation in the country has pushed the main agencies to a downgradeof the rating sovereign (S&P, Moody's and Fitch CCC with negative outlook) and a rapid worsening of market sentiment towards the country. There is a distinct possibility of default in the short term if Ukraine does not have rapid access to an aid plan.
For further information, attached the Focus On complete.
