In the midst of the Covid-19 pandemic, Ukraine is directly facing default, due to the possibility of its failure to reach an agreement with the International Monetary Fund (IMF). At the same time, Ukraine is experiencing a sharp drop in manufacturing, and may become another victim of the oil price, and very important markets for Ukraine crops and metals may significantly decrease in value shortly after. The problem of credit for the Ukrainian economy is as equally dangerous as the risks of the Covid-19 pandemic.
Meanwhile, one threat for Kyiv-USA negotiations is the oligarch Ihor Kolomoiskyi. Kolomoiskyi has a disproportionally heavy influence on political power in Ukraine due to his relationship with Volodymyr Zelenskyi. He desires to retrieve his most prominent asset, PrivatBank, which is required for closing the cases against him abroad, in which most of his assets were frozen. The IMF made a condition of lending its funds to Ukraine – to pass a law that includes the regulation against asset recovery if the owners are compromised, i.e. making it practically impossible for the bank to return to the hands of the oligarch.
Coincidently, Ihor Kolomoiskyi made a significant effort to discredit the previous government of Ukraine (and its cabinet of ministers) that cooperated with the IMF. Under pressure built up by the people and media resources of Kolomoiskyi, Honcharuk’s administration was sacked. In general, this was seen as a hostile act towards the IMF, as, according to Ukrainian law, the government’s draft bill on not returning banks to former owners, colloquially called as “the anti-Kolomoiskyi law”, should have been withdrawn from the agenda.
For most political analysts and journalists, the resignation of the government that followed meant triumph for Kolomoiskyi. However, the magnitude of the Covid-19 pandemic, panic among the actors of the world market, and Ukraine’s budgetary gap means the newly elected government needs funding that can only be gained from the IMF.
This situation looks threatening for Ihor Kolomoiskyi for a reason: he lost his last opportunity to retrieve a large part of his assets that were transferred out of Ukraine after his arrest. Therefore, it is obvious that he might make yet more moves in an attempt to break up negotiations between Ukraine and the IMF.
The situation is exacerbated by the direct unconditional influence of Kolomoiskyi on the political foundations of Volodymyr Zelenskyi’s support, which was largely created by Kolomoiskyi’s 1+1 TV channel. This potential tension in the government might easily cause the collapse of the Ukrainian economy and hypothetically drive Ukraine into further instability.
One important trick up Kolomoiskyi’s sleeve remains his contact with close associates of the President of the United States. Specifically, the remarkable meetings between the so-called “herald of Kolomoiskyi”, Ukrainian MP Dubinskyi and Rudolph Giuliani. Giuliani was seen multiple times collecting damaging information against the opponents of Donald Trump, especially the relationship of his Presidential election rival Joe Biden and Biden’s son to the Burisma natural gas production company. This was exactly the kind of information that Ihor Kolomoiskyi was trying to provide Giuliani with in exchange for some favours. Hypothetically speaking, it is not impossible that this will mean suspending the investigations against Kolomoiskyi in the USA, and unfreezing his assets. Coincidentally, there are reasons to see Moscow’s interest in such manoeuvres because the Kremlin appears really interested in hitting Biden and keeping Trump as President.
At the same time, a Ukrainian member of parliament and blogger Oleksandr Dubinskyi uses messages with anti-Western rhetoric, including some aimed against cooperation with the IMF. It is also not coincidental that the pro-Moscow politician and KGB graduate Andriy Derkach appeared around him. Derkach was a head of a cross-party alliance called “To Europe Together With Russia” in the Ukrainian parliament. Namely, Derkach and Dubinskyi gave press conferences in the autumn of 2019, in which they made public compromising information against the Bidens.
The main problem that makes cooperation with Kolomoisky toxic is his interaction with pro-Russian forces. Even though the oligarch quite seriously invested in pro-Ukrainian efforts in the fight against Russia in 2014, his political vector has now changed significantly due to lawsuits against him in the United States, where he is accused of money laundering.
Cooperation with Russian lobbyists has become particularly noticeable in the context of fake news spread by Kolomoisky’s 1+1 TV channel about US military biolabs in Ukraine that allegedly produce biological weapons. The primary source was the leader of the pro-Russian party “Opposition Platform for Life” Viktor Medvedchuk. The publicity was so loud that a US State Department employee, personally made a statement about the distribution of fake news by Medvedchuk and 1+1.
Now, considering the influence that Kolomoisky has on Ukraine’s ruling team, there is a considerable risk of halting all measures for European and Euro-Atlantic integration. Only Russia can win thanks to such actions.
Ukraine is in rather complicated situation now, as Moscow’s activity within European and American political circles and the unprecedented decay of pro-Euroatlantic sentiments coincides with burgeoning oligarchic power. The joint West is almost excluded from those processes and is tied up with domestic problems. Unfortunately, the possibility of Ukraine becoming a safe buffer zone for Russia, like Belarus, is perfectly possible.