On July 4, an international conference for the restoration of Ukraine started in Lugano, Switzerland. Among the main decisions taken on the first day of the conference, one can single out the approval of a plan to provide Ukraine with macro-financial assistance in the amount of $750 billion. Of this total, from 150 to 250 billion is expected to be directed to the restoration of infrastructure and housing damaged as a result of hostilities.
At the same time, the mechanisms for the practical implementation of this project remain unclear in the context of the ongoing war and the need to adapt legislation to it and establish partnerships between the state and private companies. Portal Open4business turned to Igor Stakovychenko, an expert in the field of construction and real estate, for a comment.
In his opinion, the practical implementation of the project should be started now at all levels, since delaying the process can lead to negative consequences in the autumn-winter period.
“Mechanisms for allocating funds from the confiscated assets of the Russian Federation and its large businesses are already being implemented by individual countries. We, in turn, need to implement the conversion of these financial assets into specific infrastructure and construction projects by creating representative offices in donor countries and coordination centers in Ukraine,” said Ihor Stakovychenko.
The expert also stressed that the regional principle of recovery, now promoted by the country’s leadership, when a separate partner state is engaged in projects in a separate Ukrainian region, is the most effective at this stage.
In addition, Igor Stakovychenko suggested creating a system of decentralized funding for the implementation of individual projects at the local level.
“But we must not forget about our responsibility to our partners. It is necessary not only to minimize, but to completely exclude the possibility of misuse of foreign aid by local officials. To do this, it is necessary to create a separate trust fund for each individual restoration project, the activities of which will be as transparent and controlled as possible by both the Ukrainian anti-corruption authorities and the donor country,” Ihor Stakovychenko emphasized.
According to the expert, the basis for the creation of such funds should be existing budget programs, as well as amendments to the main financial document.
“In fact, now we can receive funds both in the form of direct assistance and in the form of investments from partners. Here it is important to successfully implement and present the first major restoration projects, which will help increase investment attractiveness even in the current conditions,” added Igor Stakovychenko.
CONSTRUCTION, EXPERT, FINANCE, MARKETS, REAL ESTATE, RESTORATION_OF_UKRAINE, TECHNOLOGY, ІГОР_СТАКОВИЧЕНКО, СТАКОВИЧЕНКО
Yesterday, Bitcoin once again came close to the critical level of $20,000 per 1 BTC. Even the record-breaking increase in the interest rate of the Fed did not save the main cryptocurrency from falling. However, it could not save, since cryptocurrencies are a fairly young investment asset, which has not yet been affected by transition periods and changing phases of economic growth.
The crypto market continues to develop according to its own rules, remaining a speculative product, the high volatility of which attracts a large number of traders who are ready to take risks for the sake of quick earnings. Most often, such traders massively buy cryptocurrency during the growth phase and start to get rid of it just as massively when the market falls, which stimulates a further collapse.
But this time the situation is somewhat different. Many analysts are talking about the beginning of the “darkest time for crypto” in its entire history. The traditional opponents of bitcoin have also revived. Thus, the famous financier Warren Buffett recently stated:
“If I were now offered to buy bitcoins at $25, I would not take them. What should I do with them then? I would have to sell them back to you later. This is a dead end.”
And he added that he doesn’t know if bitcoin will rise or fall next year, in five or ten years, but he knows for sure that he does not produce anything.
The Open4business publication turned to Igor Stakovichenko, an expert in economics and finance, with a request to comment on the situation in the cryptocurrency market. According to the economist, the problem of the lack of a real resource and production base for digital assets has become especially acute in recent months. This is due to the fact that Russian aggression in Ukraine disrupted supply chains and led to higher prices for real sector products in the global economy.
“The fall in the capitalization of the largest companies and the crisis in the stock market naturally led to the collapse of the cryptocurrency market, as many investors considered this asset too risky,” the financier notes.
Stakovichenko stressed that in the current situation, the fall of the bitcoin market below 22,000 launched a new, even deeper “bearish phase” of the cycle, as it greatly shook the position of long-term holders of the asset. The long-term holders, who had held their positions during the last drops, could not stand it and started dumping the cue ball at the lowest prices.
“This shook the whole structure, and both technical and macroeconomic indicators today indicate a possible fall of the main cryptocurrency to 16,000 or even lower,” the expert said.
However, according to Stakovichenko, it is still too early to bury bitcoin, as “whales” (investors owning more than 10,000 BTC) still continue to accumulate this digital currency, which may indicate the possibility of growth in the medium and long term.
BITCOIN, CRYPTOCURRENCY, CRYPTOCURRENCY_MARKET, EXPERT, FINANCE, STAKOVICHENKO, ИГОРЬ_СТАКОВИЧЕНКО
The Ministry of Finance of Ukraine in March raised the forecast for payments on public debt in 2022 by UAH 4.93 billion compared to the March forecast – up to UAH 572.26 billion, according to the forecast for April on the agency’s website.
According to him, the largest amount of payments falls on April-June of this year – UAH 167 billion, while in August-September it is projected at the level of UAH 145.32 billion, in October-December – UAH 124.63 billion.
The Ministry of Finance estimates payments on domestic debt in 2022 at UAH 440.95 billion, and on external debt at UAH 131.32 billion.
According to the Ministry of Finance, on a monthly basis, the largest amount of payments fell on February – UAH 75.78 billion, and May – UAH 69.59 billion.
At the same time, the ministry increased the forecast of payments on public debt in 2023 by UAH 25.71 billion to UAH 400.91 billion.
In 2024, the ministry expects a payment in the amount of UAH 348.74 billion.
President of Ukraine Volodymyr Zelensky discussed with President of World Bank Group David Malpass an increase in the World Bank role in the stability of Ukraine’s financial sector and thanked for the provision of $350 million in financial assistance.
“Discussed with David Malpass the increasing role of the World Bank in the stability of Ukraine’s financial sector. The World Bank President noted economic stabilization, land reform and infrastructure projects in Ukraine. We are grateful for $350 million in financial support,” Zelensky wrote on Twitter on Saturday while in Munich.
The Council of the European Union approved on Friday the decision of the European Commission to provide additional macro-financial assistance worth EUR 1.2 billion to Ukraine.
“The current geopolitical tensions are having a severe economic impact on Ukraine. Member states are ready to provide EUR 1.2 billion macro-financial assistance. We decided to support the Commission’s proposal today, so that the financial help can reach Ukraine without delay,” President of the EU Council, French Minister for Economic Affairs, Finance and Recovery Bruno Le Maire said.
The decision will come into force after approval by the European Parliament, which should happen in the near future. The emergency macro-financial assistance is set to have a duration of 12 months and it would consist of two disbursements. The disbursement of the second tranche would be linked to the continuous satisfactory implementation of both an IMF programme and the policy measures agreed in the Memorandum of Understanding.
“Persistent security threats have triggered a substantial outflow of capital. Against the backdrop of the loss of access to international capital markets due to the heightened geopolitical uncertainty and its impact on the economic situation in Ukraine,” the EU Council press service said, justifying the urgency of providing additional assistance.
The EU-Ukraine Association Agreement, which entered into force on September 1, 2017, brings the Ukraine and the EU closer together. In addition to promoting deeper political ties, stronger economic links and the respect for common values, the agreement has provided a framework for pursuing an ambitious reform agenda, focused on the fight against corruption, an independent judicial system, the rule of law, and a better business climate.
Among other support instruments, between 2014 and 2021 the EU supported Ukraine through five consecutive Macro-Financial Assistance (MFA) operations that totalled EUR 5 billion of loans.
On February 1, 2022, the Commission submitted a proposal for an additional 1.2 billion macro-financial assistance to Ukraine in the form of loans to strengthen stability.
The same amount of assistance, but from France, was announced by President Emmanuel Macron during a recent visit to Kyiv. He called it “state guarantees for financing Ukrainian projects of French companies” within the agreement reached back in May.
EU macro-financial assistance in the amount of EUR 1.2 billion, in providing which France has taken an active part, will be used to stabilize the Ukrainian economy, President of Ukraine Volodymyr Zelensky has said following a meeting with French President Emmanuel Macron.
“Economic support is very important, and we really appreciate such a step of solidarity with other states, a powerful step on the part of Emmanuel, on the part of France – the allocation of EUR 1.2 billion in macro-financial assistance to Ukraine. This will really help us stabilize our economy. We are already doing well, but this is a powerful step for the economic sustainability of Ukraine,” Zelensky said at a joint press conference with Macron on Tuesday in Kyiv.
