In the battle for Ukraine’s political soul, the economy could end up caught in the middle of a tug-of-war.
Acting President Oleksander Turchinov has appealed for urgent international help to stop the economy, “heading into the abyss”.
He said Ukraine needs 35 billion dollars over the next two years.
The Russian Economic Development Minister Alexei Ulyukaev is reported as saying the next two billion dollars of an agreed bailout package is “ready to go” he is waiting to get clarity on who is Ukraine’s partner.
In 2010 the International Monetary Fund and Kyiv agreed a 15.5 billion dollar loan but it was suspended last year. There were hints the loan from the IMF could be back on the table after discussions by the Visegrad Four group in Budapest.
“Ukraine has an agreement with the Russian Federation on the purchase of government bonds and could materially help in stabilising the situation in Ukraine which I believe is also in Russia’s interest, but Poland just like all of the participants of today’s meeting is a shareholder in the IMF and the IMF will on our behalf energetically negotiate on the conditions for its second tranche of huge macroeconomic assistance,” said Radoslaw Sikorski, Polish Minister of Foreign Affairs
Financial analysts said the country’s economy was not about to collapse pointing to the fact that prices of government bonds rallied reflecting investors confidence.
Officials in Brussels said the EU was discussing a range of short and longer term financial help which could only take shape after elections in May and in coordination with the IMF.