News / Economy

Ukraine Calls for Urgent Western Aid After Yanukovich Ousted

Ukrainian opposition leader Oleg Tjagnibok, left, and Ukrainian lawmaker and chairman of the Ukrainian opposition party Udar (Punch), former WBC heavyweight boxing champion Vitali Klitschko, second left, during their talks with EU foreign policy chief Cat
Ukrainian opposition leader Oleg Tjagnibok, left, and Ukrainian lawmaker and chairman of the Ukrainian opposition party Udar (Punch), former WBC heavyweight boxing champion Vitali Klitschko, second left, during their talks with EU foreign policy chief Cat
Reuters
Ukraine appealed for urgent international aid on Monday after the fall of Russian-backed president Viktor Yanukovich cast doubt on a bailout deal with Moscow, saying it needed $35 billion over the next two years.
 
With acting President Oleksander Turchinov warning that Ukraine was close to default and “heading into the abyss”, the United States and European Union said they were looking at how to help Kyiv.
 
Both, however, indicated that any comprehensive package was likely to take shape only after elections in May and in coordination with the International Monetary Fund, which is likely to demand painful economic reforms.
 
Ukraine has been caught in a geopolitical tug-of-war between Russia and the EU. With Yanukovich now a fugitive, its chances of receiving the remaining $12 billion of a $15-billion bailout package agreed with Moscow in December, after Kyiv spurned an EU trade deal, seem to have receded.
 
Turchinov, appointed after Yanukovich was stripped of his powers by parliament on Saturday, sounded the alarm about the economy in an address to the nation on Sunday evening.
 
“Against the background of global economic recovery, the Ukrainian economy is heading into the abyss and is in a pre-default state,” he said.
 
Financial analysts said, however, that the economy was not about to collapse. Prices of its government bonds rallied and the cost of insuring its debt fell, in a sign of investors' confidence that it could avoid default.
 
The European Commission confirmed a variety of options were being discussed. “The EU has been working on an international economic support package for Ukraine - short, medium and long-term support to address the challenges of the Ukrainian economy,” said Commission spokesman Olivier Bailly.
 
EU officials said it was highly unlikely Europe, the United States or anyone else would put the kind of sums mentioned by Kyiv on the table right away. However, smaller bilateral loans, possibly coordinated by the EU, could be used to give short-term help, they added.
 
Discussions have already taken place with Japan, China, Canada, Turkey and the United States on possible help, a senior European Commission official said, and efforts are being made to keep Russia engaged in the process as well.
 
Elections scheduled for May 25 to elect Yanukovich's successor were crucial.
 
“Many of the proposals we're working on require an IMF deal to be in place, which means an operational government in Ukraine, so it can't happen until after the elections,” said a separate official involved in efforts to help Ukraine.
 
The IMF agreed a $15.5 billion loan for Ukraine in 2010, but suspended the deal last year after Kyiv failed to implement the required reforms, which included removing gas price subsidies and freely floating the currency.
 
Complementing the IMF
 
Washington offered help on Monday but linked it to reforms and a new IMF deal.
 
“The United States, working with partners around the world, stands ready to provide support for Ukraine as it takes the reforms it needs to, to get back to economic stability,” said White House spokesman Jay Carney, adding that “this support can complement an IMF program by helping to make reforms easier”.
 
Separately, Treasury Secretary Jack Lew and IMF Managing Director Christine Lagarde agreed that Ukraine would need both bilateral and multilateral support for any reforms, the U.S. Treasury said.
 
Three months ago, Brussels was hoping to sign Ukraine up to the far-reaching free trade and association agreement that would have brought the country of 46 million more closely into the EU's political and economic sphere of influence.
 
Yanukovich rejected that deal at the last minute, deciding instead to accept the aid and cheaper gas from Russia. That led to weeks of popular protests culminating in his fall.
 
Russian economy minister Alexei Ulyukayev said the next $2 billion installment of its bailout for Ukraine was “ready to go” but repeated Moscow's stand that it first wanted to see who would be running the country.
 
“Our position is, we are going to continue with that. But we would like to know, who are our partners?” Ulyukayev said during an event at the U.S. Chamber of Commerce in Washington.
 
Moscow has also said any extension of the deal cutting the price of Russian gas must be negotiated with Ukrainian companies and the government.
 
EU foreign affairs chief Catherine Ashton was meeting officials in Kyiv to discuss the economy.
 
Ukraine has around $6.5 billion in foreign debt payments to make before the end of 2014 and needs a further $6.5 billion to cover its current account deficit, while it is also $1 billion in arrears to Russia for gas supplies, according to estimates from Commerzbank.
 
Estimates vary but Goldman Sachs reckons that the central bank's currency reserves are down to $12-$14 billion, a sum which its obligations could wipe out.
 
Kiev must repay a $1 billion eurobond in early June and the government has also guaranteed a $1.6 billion eurobond issued by state energy company Naftogaz, which falls due in September.
 
Ukrainian bondholders remain nervous, despite Monday's market rally.
 
“As investors we need to see there is a source of funds to repay debt. There was a sure source of funds which was Russia and that's not there any more,” said Angus Halkett, a portfolio manager at Stone Harbor Partners, which owns Ukrainian debt.

You May Like

Tired of Waiting, South Africans Demand Change ‘Now’

With chronic poverty and lack of basic services largely fueling recent xenophobic attacks, many in Rainbow Nation say it’s time for government to act More

Challenges Ahead for China's Development Plans in Pakistan

Planned $46 billion in energy and infrastructure investments in Pakistan are aimed at transforming the country into a regional hub for trade and investment More

Audio 'Forbidden City' Revisits Little Known Era of Asian-American Entertainment

Little-known chapter of entertainment history captured in 80s documentary is revisited in new digitally remastered format and book More

This forum has been closed.
Comment Sorting
Comments
     
by: Taichi Robinhood
February 25, 2014 7:16 PM
So the Ukrainians will have to suffer for their unrest, in which only the opposition leaders will benefit. Is the price too high that the ordinary Ukrainians are paying?

by: Igor from: Russia
February 25, 2014 3:44 AM
It is time for some opposition supporters such as the USA and the EU to show their kindness and generosity to save Ukraine's economy. I think 15 billion us dollars is a small amount of money within their ability.

by: Rumpoy from: EU
February 24, 2014 11:24 PM
yeah sure... how much...? what a preposterous idea. Look Ukraine, you don't seem to be very intelligent people... you need to go ahead legislate transparency accountability and responsibility... than maybe, just maybe... you will see some aid... not cash... but aid... Europe is not going to repeat the Arab Palestinian experience in which we essentially subsidized the extravagant lives of some really squalid Arab terrorist reprobates. We are broke..!! Europe is BROKE!!! and we are not going to finance some degenerate fascist regime in the Ukraine.

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Study: Insecticide Damaging Wild Bee Populationsi
X
April 24, 2015 10:13 PM
A popular but controversial type of insecticide is damaging important wild bee populations, according to a new study. VOA’s Steve Baragona has more.
Video

Video Study: Insecticide Damaging Wild Bee Populations

A popular but controversial type of insecticide is damaging important wild bee populations, according to a new study. VOA’s Steve Baragona has more.
Video

Video Data Servers Could Heat Private Homes

As every computer owner knows, when their machines run a complex program they get pretty hot. In fact, cooling the processors can be expensive, especially when you're dealing with huge banks of computer servers. But what if that energy could heat private homes? VOA’s George Putic reports that a Dutch energy firm aims to do just that.
Video

Video Cinema That Crosses Borders Showcased at Tribeca Film Festival

Among the nearly 100 feature length films being shown at this year’s Tribeca Film Festival in New York City are more than 20 documentaries and features with international appeal, from a film about a Congolese businessman in China, to documentaries shot in Pakistan and diaspora communities in the U.S., to a poetic look at disaffected South African youth. VOA’s Carolyn Weaver has more.
Video

Video UN Confronts Threat of Young Radicals

The radicalization and recruitment of young people into Islamist extremist groups has become a growing challenge for governments worldwide. On Thursday, the U.N. Security Council heard from experts on the issue, which has become a potent threat to international peace and security. VOA’s Margaret Besheer reports.
Video

Video Growing Numbers of Turks Discover Armenian Ancestry

In a climate of improved tolerance, growing numbers of people in Turkey are discovering their grandmothers were Armenian. Hundreds of thousands of Armenians escaped the mass deportations and slaughter of the early 1900's by forced conversion to Islam. Or, Armenian children were taken in by Turkish families and assimilated. Now their stories are increasingly being heard. Dorian Jones reports from Istanbul that the revelations are viewed as an important step.
Video

Video Migrants Trek Through Western Balkans to Reach EU

Migrants from Africa and other places are finding different routes into the European Union in search of a better life. The Associated Press followed one clandestine group to document their trek through the western Balkans to Hungary. Zlatica Hoke reports that the migrants started using that route about four years ago. Since then, it has become the second-most popular path into Western Europe, after the option of sailing from North Africa to Italy.
Video

Video TIME Magazine Honors Activists, Pioneers Seen as Influential

TIME Magazine has released its list of celebrities, leaders and activists, whom it deems the world’s “most influential” in 2015. VOA's Ramon Taylor reports from New York.
Video

Video US Businesses See Cuba as New Frontier

The Obama administration's opening toward Cuba is giving U.S. companies hope they'll be able to do business in Cuba despite the continuation of the U.S. economic embargo against the communist nation. Some American companies have been able to export some products to Cuba, but the recent lifting of Cuba's terrorism designation could relax other restrictions. As VOA's Daniela Schrier reports, corporate heavy hitters are lining up to head across the Florida Straits - though experts urge caution.
Video

Video Kenya Launches Police Recruitment Drive After Terror Attacks

Kenya launched a major police recruitment drive this week as part of a large-scale effort to boost security following a recent spate of terror attacks. VOA’s Gabe Joselow reports that allegations of corruption in the process are raising old concerns about the integrity of Kenya’s security forces.
Video

Video Japan, China in Race for Asia High-Speed Rail Projects

A lucrative competition is underway in Asia for billions of dollars in high-speed rail projects. Cambodia, India, Indonesia, Malaysia Thailand and Vietnam are among the countries planning to move onto the fast track. They are negotiating with Japan and the upstart Chinese who are locked in a duel to revolutionize transportation across Asia. VOA Correspondent Steve Herman in Bangkok has details.
Video

Video Scientists: Mosquitoes Attracted By Our Genes

Some people always seem to get bitten by mosquitoes more than others. Now, scientists have proved that is really the case - and they say it’s all because of genes. It’s hoped the research might lead to new preventative treatments for diseases like malaria, as Henry Ridgwell reports from London.
Video

Video Bible Museum Coming to Washington DC

Washington is the center of American political power and also home to some of the nation’s most visited museums. A new one that will showcase the Bible has skeptics questioning the motives of its conservative Christian funders. VOA religion correspondent Jerome Socolovsky reports.
Video

Video Armenia and Politics of Word 'Genocide'

A century ago this April, hundreds of thousands of Armenians of the Turkish Ottoman empire were deported and massacred, and their culture erased from their traditional lands. While broadly accepted by the U.N. and at least 20 countries as “genocide”, the United States and Turkey have resisted using that word to describe the atrocities that stretched from 1915 to 1923. But Armenians have never forgotten.
Video

Video Afghan First Lady Pledges No Roll Back on Women's Rights

Afghan First Lady Rula Ghani, named one of Time's 100 Most Influential, says women should take part in talks with Taliban. VOA's Rokhsar Azamee has more from Kabul.
Video

Video New Brain Mapping Techniques Could Ease Chronic Pain

From Boulder, Colorado, Shelley Schlender reports that new methods for mapping pain in the brain are providing validation for chronic pain and might someday guide better treatment.

VOA Blogs

World Currencies

EUR
USD
0.9238
JPY
USD
119.51
GBP
USD
0.6614
CAD
USD
1.2119
INR
USD
63.562

Rates may not be current.