Fears for the economic legacy in Ukraine

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Fears for the economic legacy in Ukraine

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Is time running out for the people of Kyiv – the clock ticking not for the political future but for the economy?

Financial experts have warned Ukraine is on the brink of default with some saying currency reserves are enough for only two months. Russia has provided the first three billion dollar tranche of a loan. With the political stand off the rest has been frozen.

Mykhaylo Pohrebinsky a political analyst and advisor to President Viktor Yanukovych pointed out: “It is necessary to form a government that won’t irritate Europeans and Americans. At the same time this has to be a government that can go to Russia and get money – that second tranche from Russia.”

It is not the immediate which concerns some analysts but building an economy which will grow after implementing reforms. To do that, they argue there is only one way to go.

“Definitely for the market and for the Ukrainian economy overall it would be much better if we got the IMF’s support because IMF help will mean the government, the authorities will make some reform which will put the Ukrainian economy on a sustainable footing.Russian support will mean that we get the money and spend them to repay the gas imported from Russia,” opined Olena Bilan, Chief Economist to Dragon Capital – Ukraine’s leading investment bank.

There has been a decline in the value of exports and the public purse is paying out to a growing number of pensions. Many fear for the economic legacy.

“If it is a loan on good condition then if doesn’t matter from where but the loan has to be given back and this is disastrous for us for our children, grandchildren and great grandchildren,” said one man questioned in Kyiv.