In order to help Ukraine, George Soros asserts that the allies of the country should combine sanctions against Russia. This way, no propaganda could prevail over the fact that President Putin’s policies are to blame for Russia’s political and economic problems. Soros argues that Russia has managed to gain temporary tactical merit over Ukraine because President Putin is determined to risk full-scale war and the use nuclear weapons. On the other hand, the allies of Ukraine are working on averting direct military clash with Russia. It is for this reason that Putin has managed to engage in hybrid war and peace according to his will.
In a large-scale war, Ukraine will not be able to prevail over Russia. This is because Russia has the ability to mobilize better armed forces. George Soros Ukraine believes that the U.S. and Europe have the power to outbid Russia financially. The inaction by the U.S. and Europe to provide Ukraine with financial assistance was hampered by the Greek crisis. The Greek crisis was caused by the euro crisis, thus the European Union could not follow the same route in assisting Ukraine. On the other hand, the Minsk agreement encouraged the European Union to keep Ukraine on a tight financial position.
Ukraine Deserves Debt Relief
Soros noted that the euro crisis resulted in acute shortage of funds for purposes of budgeting. The EU had a budget of € 145 billion, which was around 1% of member state’s GDP. In addition, Europe was not growing, thus its member states were clamoring to shrink their contributions to the budget of the EU. Soros contends that the European authorities mandated to resolve the Greek crisis mishandled the situation. These authorities started by providing Greece with emergency loans at punitive rates of interest. In addition, they imposed their own reform programs on Ukraine and engaged in micromanaging the country. They did not allow Greece to own or take control of the reforms. According to Soros, the biggest impediment has been treating Ukraine in a similar manner to how Greece was treated by the European authorities.
The government of Ukraine has been fighting for the structural reforms highlighted on the Brady Plan of 1989. These plans are fighting corruption, reviewing and reforming the judicial system, enhancing agricultural functions, cleaning the banking system, securing the country from Russian gas and incorporating the economy into the EU among many other plans. One impediment against the country getting debt relief has been Chapter 11. This chapter assumed that coercing a country under heavy debts to pay these debts in full would not be good for business. It goes on to assert that making debt relief easier is good for business.
The efforts made by Ukrainian academicians and policy makers to have a sovereign debt restructuring mechanism have failed to take off just like in the past. This situation is not good for a nation like Ukraine because the narrative that default meddles with a country’s reputation goes against the U.S. bankruptcy code. Soros argues that Ukraine should get debt relief in order to rebuild itself as the new Ukraine.
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