The Privatbank scandal is finally finishing off the Ukrainian economy
The suspension of payments by legal entities through the Privatbank system undermines confidence in the state’s ability to act adequately in the current situation and could lead to the destruction of the Ukrainian banking system.
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Taras Zagorodny, managing partner of the National Anti-Crisis Group, made this warning at a press conference in Kyiv.
“There was a clear statement that payments would go through. There was talk that there would be some restrictions, but this did not happen. In such a critical situation, if the state does not act and does not inspire confidence, this will continue in the future. And I understand that they basically don’t care. They will say that now the hole is not 140, but 160 billion, and this debt will continue to be repaid at our expense. In such cases, when it comes to a systemic bank, the state must act very carefully, first of all. According to economic theory, a state cannot be bankrupt because it produces money. It can print them in any quantity and increase debt, which is constantly being restructured,” the expert emphasized.
“Of course, what will happen to Privatbank depends on how the state acts, how quickly it reacts to what is happening, how quickly it restores the bank’s full functionality. And the main thing is that it does not use the data of people who have now come to it for persecution and further assessment of tax penalties. This is very important, because many non-cash payments were made through Privatbank, both from individuals and legal entities. If the state does this, then this will be the end of the banking system, the end of this government and this power. The economy cannot withstand a greater blow; it will be the destruction of the middle class,” Zagorodny believes.
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