The politics behind the gas disruption

摘要

As steel and fertilizers, both gas intensive industries, account for over 40% of Ukraine's export currency inflows and 20% of tax collections alone, the stakes are high for the former soviet country. From Ukraine's perspective, the gas prices being proposed by Gazprom would cripple an already struggling economy. GDP has contracted and the hryvnia has fallen in value. The $4.5bn loan from the IMF in December 2008 came on the condition of a current account surplus in 2009 and strict foreign reserve requirements. With elections due in the next 12 months, Ukrainian politicians are keen to get the best deal from Gazprom.