Yves here. To invoke a favorite Michael Hudson observation, “Debts that can’t be paid, won’t be paid.” The IMF seems be operating from the fantasy that Ukraine households that are already behind on energy payments can somehow have more money wrung from them. Perhaps the IMF can be excused for its stupidity. Year ago, it committed itself to a “No more Argentinas.” It now has 10.5 billion in SDRs of loans outstanding to Ukraine, which is roughly $14.2 billion.
Lending to Ukraine was in clear violation of IMF policies. It has a “No more Argentinas” rule which it abandons when arm-twisted hard, as in the 2015 Greek bailout crisis
At least in the Greek affair, some IMF staffers pushed back and then leaked. From a 2019 post:
During the Greek bailout negotiations, even some members of the program staff were clearly opposed to what was going on via leaking internal documents that contended that the planned round of funding to Greece violated the IMF’s “No more Argentinas” commitment, as in no more lending to borrowers who clearly could not make the payments. Even though the IMF waffled for a bit as if it really were trying to get out of ongoing involvement in the fiscal torture of Greece, it went along just as it was supposed to.
Even though the IMF does not have a policy against lending to countries at war, Ukraine was already had dreadful demographics and was fabulously corrupt even before the conflict with Russia made it dependent on money and weapons transfusions from the Collective West. So as with the Greek bailout the IMF bent, or rather revised, its rules to extent more credit to Ukraine. From Reuters in 2023 in IMF approves rule change that would allow new Ukraine loan program:
The International Monetary Fund said its executive board on Friday approved rule changes that would allow the IMF to approve new loan programs for countries facing “exceptionally high uncertainty” – a move expected to pave the way for a new Ukraine loan program.
The changes to the IMF’s financing assurances policy would apply to countries experiencing “exogenous shocks that are beyond the control of country authorities and the reach of their economic policies,” the IMF said in a statement.
Ukraine, which has been battling a Russian invasion for more than a year, is seeking an IMF financing package of around $15 billion. But the Fund’s rules designed to deal with country economic crises did not allow for non-emergency loans to countries facing such massive uncertainties, such as from major wars or multi-year natural disasters induced by climate change.
The IMF said the rule revisions would address key barriers to such loans by allowing official bilateral creditors and donors to provide upfront assurances about repayment to the IMF and delivering debt relief to the borrowing country.
By Michael Hudson, a research professor of Economics at University of Missouri, Kansas City, and a research associate at the Levy Economics Institute of Bard College. His latest book is The Destiny of Civilization<./a> Originally published at his website
From today’s Johnson’s Russia List
JRL, November 10, 2026, # #12
www.rt.com, November 8, 2026
Ukraine’s mission IMF-possible: Who will pay the bills?
The International Monetary Fund wants to raise the utility bills of household consumers, but can they afford them?
https://rt-english.com/business/648574-imf-ukraine-household-gas-tariffs/
Ukraine faces a difficult choice as the International Monetary Fund (IMF) pushes for higher household tariffs on gas, electricity and heating from 2027.
With utility arrears already reaching 113.4 billion hryvnia ($2.5 billion) and millions of households struggling to pay their existing bills, the proposed increases raise a fundamental question: if Ukrainians cannot afford current tariffs, who will pay the higher ones – and will the policy actually generate more revenue, or simply deepen household debt?
Households Are Already Struggling
As of the beginning of 2026, outstanding utilities arrears amounted to 113.4 billion hryvnia ($2.5 billion), having increased by 12.5% in the fourth quarter of 2025, according to the State Statistics Service of Ukraine. The figures for heating and hot water are particularly revealing: payments covered only 59% of the amounts billed during that quarter.
Enforcement proceedings against delinquent households have soared, however, a large proportion of them end without debt recovery. Though no reason is offered, it can be assumed that many people simply cannot pay.
But that raises a question that the IMF doesn’t seem to address. If people cannot pay their existing bills, what makes anybody think that increasing the amount they owe will increase the amount of money collected?
The IMF’s tariff calculations are principally concerned with the relationship between the amount billed and the cost of supplying the service. But raising prices does not necessarily raise revenue proportionately.
What if People Don’t Pay?
Meanwhile, the huge sum of unpaid utility bills tells us something that standard economic statistics do not. It shows that households are continuing to consume an essential service without paying its full cost.
The utility company supplies the energy and sends the bill, but some of that bill goes unpaid. The household gets to use the money it would otherwise have spent on the utility bill, while the utility company is left waiting for payment. In effect, the company is extending credit to the household, whether it intends to or not.
There is an interesting economic implication here: some household consumption is being sustained not by income, but by the accumulation of unpaid bills.
Does This Mean the IMF Is Favoring Creditors Over the Population?
The IMF is not a national economic planning ministry. It has a very particular mandate, which is to help countries address balance-of-payments problems and make financing available under certain safeguards – and of course promote economic stability.
For a country such as Ukraine, which is heavily dependent on external financial support, these objectives make a certain amount of sense. So does the IMF’s concern about the hidden degradation of Ukraine’s debt sustainability. A country’s ability to pay back creditors – including the IMF itself – is of no small concern to the fund.
But the IMF’s notion of “economic stability” usually has a way of becoming indistinguishable from “financial stability” and, once so interpreted, becomes defined in such a way that the interests of creditors are protected. Also, “financial stability” and “household economic stability” are not the same thing.
Nevertheless, the IMF is clearly correct that Ukraine has an unsustainable fiscal structure and that something has to give.
In September, Rada Energy Committee member Sergey Nagorniak said Ukraine would soon face tough decisions: “Sooner or later, our partners will back us into a corner and force us to make highly unpopular decisions – to end subsidies for natural gas, heating, and electricity tariffs for households,” the MP said.
Therefore, the age-old question of who will bear the burden of the adjustment cannot be avoided. Ultimately, this is a decision for the Ukrainian government. Insofar as it has any autonomy, it will have to decide what its priorities are.
What is clear enough is that the incentives seem to align so that the IMF, Ukraine’s creditors, and foreign donors are interested in maintaining a very specific type of stability, in which the wellbeing of Ukrainian households is far from the main concern.
Hudson added in comments:
Here’s the question I want to ask about this article: When the war is settled, is there ANY way that the IMF actually can get paid? Ukraine is broke. It has no money to pay. And it obviously is not credit-worthy. It is another “Argentina’ — as in “No more Argentinas,” an earlier IMF directive. All its loans are against every principle of lending. The debt to the IMF can’t be paid. So what’s up? I think the answer must a plan by the US within the IMF to insist that Ukraine “pays” by selling off whatever mineral rights and monopolies have a market value for the Trump-Kushner corporation to profit from (as in a Ukrainian gas pipeline to Europe that they can use as a choke point). What are your suggestions, humorous or serious?
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