So far, the Euro Maidan or Euro Revolution has largely been about politics and foreign policy, but it must not be forgotten that this government has run the Ukrainian public finances into the ground through top-level corruption. The time has come to think creatively about how to sort out the rampant Ukrainian financial crisis.
Ukraine’s well-known problems of corruption lie behind Ukraine’s last-minute demand for payment in return for association with the European Union. A headline in Yevropeiskaya Pravda on December 7 said it all: “[First Deputy Prime Minister Serhiy] Arbuzov: Ukraine needs 10 billion [US dollars], but Europe Proposed only 610 million [euro].” This is of course better than President Viktor Yanukovych’s absurd demand of €160 billion from the European Union in grants until 2017, but Arbuzov’s insistence was logical if fantastic. His government needs such a large amount because of its financial mismanagement.
The Ukrainian government’s budget deficit of 6 percent of GDP or $11 billion is driven by what is commonly called the “Yanukovych family” siphoning big money from the state budget. Because everyone knows about this corruption, the International Monetary Fund (IMF) and the European Union have refused to aid the Ukrainian government.