As Ukraine’s economy spins towards default, investors and bankers worry the financial turmoil will spill over into global markets, a scenario “nobody wants to deal with,” Arnaud Leclercq, Head of New Markets at Lombard Odier Darier Hentsch & Cie, told RT.
The situation in the country is already in turmoil, very imbalanced and if you add to that a default, it would probably be a road to a much worse case scenario, that obviously nobody wants,” Leclercq said.
A Ukraine default will happen when the government announces it can no longer meet its debt obligations.
Nobody would want to deal with that, because it will trigger a number of other consequences for the country itself.   A ‘domino effect’ and a social effect,” Leclercq said.

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Street vendors wait for customers in the small Ukrainian town Pustomyty, near the western city Lviv (Reuters/Gleb Garanich)

Street vendors wait for customers in the small Ukrainian town Pustomyty, near the western city Lviv (Reuters/Gleb Garanich)

Arnaud Leclercq is an expert in Russia and CIS markets, and has traveled to, and worked in Moscow since the age of 25, when he set up a real-estate consulting firm in the 90s. He experienced at first hand the 1998 default and the cash crisis, when the value of the ruble plummeted as the Central Bank could no longer prop up the currency with interventions.

Ukraine’s Central Bank halted currency interventions in February. As a result, the hryvnia has slid 20 percent against the dollar this year. However, continuing to prop up its overvalued currency is no longer an option for Ukraine, as its treasury is nearly empty, with foreign currency reserves close to $15 billion.

If Ukraine defaults and the hryvnia collapses like the ruble did in 1998, inflation is expected to soar and many banks across the country will close, and ordinary people could lose their life savings overnight.

The economic situation in Kiev is dire and an uncertainty hangs over the political direction of the country.

“We believe is that if any solution is to be found it needs to be found jointly. For historical reasons and for financial reasons as well,” said Leclercq.

Ukraine’s IMF burden

The EU, together with the IMF, has put forward an 11 billion euro ($15 billion) aid package for Ukraine, which may save it from default, but will also come at a high cost to the country.

“Let’s not forget that the Greek crisis has cost the European economy more than 300 billion euro, not peanuts, by any means,” Leclercq said.

The eurozone crisis forced 5 countries to seek bailout help from the IMF and European lenders. Irelandand Spain have exited their bailout programs, but other countries, especially Greece, are paying the price for taking the money.

A Harvard Business School alumni and former banker at Credit Suisse, Leclercq is not sure Europe alone can handle the economic weight of Ukraine, a nation of 45 million people with a gross domestic product of $176 billion.

“Could Europe sustain Ukraine today alone?” Leclercq pondered. “Many European countries still have their own economic woes to deal with.”


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  1. What very wrong with this picture shown???????????????? if that poverty in the Ukraine there livin pretty high. I seen 10 to 20 times worse in the usa. No America isn’t bailing out another country

    • No food stamps for 1/6 of the population in Ukraine. Think about that for a moment.
      These people are living like homeless people in the US, but get to work to have a life. In part, because people don’t still food around as much. Food is a huge part of the income

    • I took that picture to be of the beginning of a black market in Ukraine… people selling items on the street, in alleys, or in a bazaar for higher prices than the stores have but at least food, and perhaps other items as well, can be found there.  Not sure how the stores are doing in Ukraine.  Have not seen any reports or comments on that but it is possible that they are not getting their usual deliveries these days due to the violence and confusion that exists there now.  Hopefully, this will soon calm down and some semblance of normality will occur.

  2. As I already said before guys, Ukraine is Greece #2. The idea is to give this country as much paper loans as possible, and when they fail to pay, get Crimea from them as they ask Greece to dispose off 600 islands. Now, just yesterday I dug out a lot more on the Crimea situation. Things began in 1922 when Bolshevik had already totally controlled Russia with their attempt to build the NWO. Why did they begin from Russia. If I am not mistaken  Eustace Mullins dug out some info that back in 1847 (or so) the European elite and royalties meat some place in Austria to discuss how they going to bring about the New World Order. The Russian Czar also attended and refused to participate in this. That is why this gangsters decided to sink Russia first as Punishment. Fast forward to 1922. Lenin as a head of Bolshevik government ships gold and Hermitage treasury to US as collateral for loans that Bolshevik’s government needed. When they run out of gold they offered the Rothschilds to sell Crimes for next in turn loan. The Rothschilds who were not willing to risk, as they usually do, issued shares for this loan and sold it to European and American elite. What for? The idea was to organize Israel in Crimea and all territory going down to Sochi. Of course Lenin signed all the papers and Crimea became a loan guarantee. As you all remember the West did not hurry to begin its military assistance to Soviet Union against Hitler almost up until 1944. Why? They pressed Stalin to agree to the Crimea deal, who inherited this problem from the Lenin government. He partially agreed. But he knew he dealt with a bunch of gangsters so he had some ideas going forward. As a part of agreement, he started populating this area with Jews and also had to move out Crimean Tatars (who lived there originally with Russians but were against Jews moving to their land) out of the area as a proof that he honors the agreement. The help in WW2 came right after these actions. In 1953 Stalin was poisoned and Khrushchev took over. He used Stalin’s idea and gifted this territory to Ukraine to remove it from the jurisdiction of Russian Federation. Oh, one other thing. This is why Stalin actively assisted Jews in creating their homeland in Palestine and hoped that this question would go away, as Jews begin to move to Israel. And the problem went away, for a while, till now. Now you know why these gangsters are trashing Ukraine. They want a payback with Crimea. Information is taken from open KGB and State archives in the mid 90-s. I listened to an interview with the guy who was in charge of examining these archives.

    • If Greece wanted to make a s***load of money, they would sell some of those islands as TAX HAVENS, meaning that there would be no taxes on them, ever.  One can only imagine the billionaires of the world falling all over themselves to buy such islands and set them up as their corporate HQs.  It would be an instant banking and investment haven as well.  Something like that would make TPTB cringe for sure.  lol

    • @Ed_B
      This is theoretically possible if Greece breaks away from EU, but this is against globalization plans of the banksters. They should not have joined the EU to begin with. But, this is where the corrupt politicians come handy, while the rest of thepopulation is watching football or some or some other gladiator fights on TV.

    • @PrometeyBezkrilov
      I understand that the global banksters would not like this very much but was looking at it from the Greek point of view.  It would be a way for them to generate a substantial amount of revenue, which they desperately need.
      Greece should never have been allowed to join the EU.  Yes, they could have had some trade agreements and such but Greece had more debt than the EU entrance requirements allow.  The Greek government hired Goldman Sachs to guide their application through the process.  Clearly, GS KNEW that Greece did not qualify for admittance into the EU but they were paid a lot of money to ensure that Greece got in… which they did.  I suspect that bribery was used to get them in.  At some point, Greece will leave the EU.  It is not at all clear whether they will do so on their own or whether they will be thrown out.  One of these two will occur, probably in the next year or so.

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