Thread by @mattia_n

Some more sober thoughts on the short and medium economic repercussions on the decisions to remove #Rjaboshapka and drastically change the Ukrainian cabinet.

A thread. #Ukraine.

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the short-term: @LIGAnet, Ukrainian business outlet, reported that @MorganStanley recommended selling Ukrainian government bonds. “We recommend selling Ukraine-2030 Eurobonds and buying Egypt-2031 bonds,” the report stated. So traders are spooked.
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finance.liga.net/ekonomika/novo…

As @tashecon, one of the sharpest econ analysts, argues in his op-ed for @KyivPost the 🇺🇦 macroeconomic setting was the best in 30 years. That seems in peril.
Look especially at the IMF-Ukraine relations, how negotiations continue & whether they succeed /3
kyivpost.com/article/opinio…

Both Prime Minister #Smyhal & Finance Minister #Umansky vowed to continue cooperation with IMF & to continue structural reforms. But confidence isn't high. So, look very carefully at how that (positive) rhetoric translates into actual policy. /4

President #Zelenskyy in his speech at one point struck a dangerous tone to exploit anti-Western sentiments, criticizing foreigners serving on supervisory boards for earning too much. Is that the new tone when dealing with foreign partners? /5

https://twitter.com/mattia_n/status/1235581140557344771

Another fear is that sluggish growth leads the Shmyhal government to use budget deficits & public debt to pump up the economy. There is nothing against a sensible stimulus package but #Ukraine's room for that is very limited. So, look at how the gov. revises the '20 budget /6

A good domestic stimulus alone won't do the magic alone. Ukraine will have to continue to try to get more investments, from companies at home & abroad. That's where large dangers lay, in my humbled opinion. /7

FDI since #Russia's aggression fell sharply, bounced back a bit and since 2017 continued to fall below $3 billion. In the first six months of 2019, the figure reached a disappointing $1.2 billion. /8
eurasianet.org/fdi-woes-still…

So, WHY isn't Germany investing more in 🇺🇦? For months, this has been one of the main themes of countless conversations we had with several Sluha supporters & MPs, most of whom sincerely want to improve the country by making it more attractive to (foreign) investment. /9

As of now, there are about 2000 🇩🇪 companies active in #Ukraine but the actual level of new investment by the German companies is low. Reasons are manifold & range from corruption to red-tape. BUT the 2 most important reasons I heard: political insecurity & JUDICIARY /10

No investment nanny, fancy roadshows & shiny brochures will change that. The verdict is still out but my first reading & conversations with the main German business associations is that the shakeup & firing of #Rjaboshapka have hurt the confidence & reputation a LOT... /11