Thursday, October 02, 2014

Will Ukraine Commit Economic Suicide?


Ukraine is on the brink of committing economic suicide after imposing a crippling 55 percent tax on private gas producers, while parliament prepares to vote on next year’s budget, which aims for a continuation of the same.

The Oct. 14 budget vote—which is already a month late—is a major condition for Ukraine’s next credit tranche from the European Union, but if the 2015 budget goes through as proposed, it will decimate independent gas production, remove any potential for Ukrainian energy independence and deal a further blow to the already struggling economy.

“Kiev’s attempt at fiscal discipline to fund the war effort in the east and stave off an economic crisis is not working, and the end result is going to be economic suicide,” Robert Bensh, majority shareholder of Cub Energy, Ukraine’s fourth-largest independent gas producer, told Oilprice.com from Kiev .... http://oilprice.com