Michael Hudson: Ukraine’s “Operation Vulture” and Labor Protests


Naked Capitalism has the article Michael Hudson: Ukraine’s “Operation Vulture” and Labor Protests.

Emptying out Ukrainian business bank accounts will leave empty shells. With Ukraine’s economy broken, the only buyers with serious money are European and American. Selling to foreigners is thus the only way for managers and owners to get a meaningful return – paid in foreign currency safely in offshore accounts, outside of future Ukrainian clawback fines. Privatization and capital flight go together.

So does short-changing labor. The new buyers will reorganize the assets they buy, declare the old firms bankrupt and erase their wage arrears, along with anyother bills that are owed. The restructured companies will claim that bankruptcy has wiped out whatever the former firms (or public enterprises) owed to workers. It is much like what corporate raiders do in the United States to wipe out pension obligations and other debts. They will claim to have to “saved” Ukrainian economy and “made it competitive.”

Who could have predicted this would be the result of the Ukraine taking the West’s deal instead of the deal Putin offered? Well, just about everyone whom I quote on this blog, and they did predict exactly this. But seriously, who could have predicted this?

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