The biggest problem for the new Ukrainian government isn’t die-hard Yanukovych supporters or the threat of Russian involvement, but the fact that it is running out of money:
In Kiev, the political focus turned to formation of a government capable of dealing with what acting president Oleksandr Turchynov called “catastrophic” economic challenges.“Yanukovich’s regime brought the economy to catastrophe. State coffers are empty,” he said, calling for a national unity government to be formed by Tuesday.
Like the Yanukovych government before it, the new Ukranian government is likely looking for an aid package from outside the country. This is even more complicated than it looks. Ukraine is an extremely corrupt country, and the opposition’s reputation is no better than that of the former government. Neither the United States nor the EU will be eager to toss money down this rat hole. Why give aid that the oligarchs will immediately steal and send to Switzerland?It’s going to be very hard to get Ukraine to sign up and enforce the conditions under which big new aid packages would make sense. Putin hoped that the offer of unconditional bailouts would buy a critical mass of oligarchs, but they fear getting eaten up by even bigger Russian oligarchs (backed by the Kremlin) as much as they fear having a bunch of Western accountants and lawyers landing in Kiev and slowly throttling all the fun out of stealing public money.The best thing that could happen would be a serious aid package from the United States and the EU, including the kind of trade relief and support that would underwrite the painful shift to a Western-focused economy in the east of the country, and a serious deal where the oligarchs agree to go straight in the future in return for letting them keep what they already have. Combine this with a serious reform effort, and something could happen.But the West doesn’t really want to make this kind of investment, and the oligarchs don’t really want to give up control, so we shouldn’t expect any tidy and quick solutions to this mess.