Alberta Approves Memorial Day For Ukrainian Genocide

EDMONTON, Canada -- Premier Ed Stelmach's voice cracked as he spoke about an Act introduced and passed unanimously Thursday that makes every fourth Saturday in November an official memorial day in Alberta for the Ukrainian famine and genocide, or Holodomor.

Premier Ed Stelmach
"I do this with a great range of personal emotion," said Stelmach, whose grandparents immigrated to Alberta from Ukraine a century ago.

In a speech heavily peppered with Ukrainian phrases and words, Stelmach called the famine forced upon Ukrainians in the early 20th century "one of the most heinous atrocities of modern history." He outlined how millions of people from his ancestral home were starved to death by Soviet policies that stripped grains from Europe's traditional "bread basket."

"My grandfather and grandmother were amongst those early pioneers who came to Alberta in the late 1890s," Stelmach said. "Marie and I still maintain the original farm that they settled on, till the same soil that they did and . . . "

The premier took a long pause before continuing, "And we also give thanks for the abundant crops that soil yielded."

Sadly, he said, the dark black soil of the Ukraine his own ancestors treasured could not offer the same happy yields through the early 1930s.

The Act was introduced by Aboriginal Affairs Minister Gene Zwozdesky - who is also of Ukrainian descent.

Source: Calgary Herald

Ukraine Cbank To Continue With Unlimited FX Action

KIEV, Ukraine -- Ukraine's central bank will continue to intervene in currency markets by buying and selling unlimited amounts of dollars, First Deputy Chairman Anatoly Shapovalov told Reuters on Friday.

Ukraine Central Bank
The central bank has been intervening every day for the past two weeks to try to prop up the hryvnia, which slipped on Wednesday to a historic low of 7.2 to the dollar. It has since bounced bank and was quoted 5.86-5.95 on Friday.

Shapovalov said a requirement for banks to sell the dollar at the rate they bought from the central bank would remain in force for several days. It offered to sell dollars at 5.95 hryvnias on Friday and at 6.05 on Thursday.

The bank is trying to bring interbank rates for the hryvnia back in line with the rates at which it intervenes, after market rates reached 7 to the dollar earlier this week when the bank was selling limited amounts of dollars at 5.7.

"We intervened yesterday, selling $500 million dollars. We therefore demand that if they bought from central bank reserves, they then meet client orders at that rate and their profit is the commission," he said.

"Today, we will send a letter saying that dollars bought today at 5.95 hryvnias have to be sold at 5.95 ... This is meant to calm the market. At the very least, this will happen today, tomorrow, and then we will see."

He said he expected the bank to sell fewer dollars on Friday than the $500 million on Thursday.

The office of President Viktor Yushchenko on Thursday criticised the bank's failure to stabilise the hryvnia despite selling $5 billion in the past three weeks.

Central bank reserves stood at $37.5 billion as of end-September. Officials have since then have said the reserves stood at $33-34 billion.

Source: Guardian UK

Germany To Co-Host Euro 2012?

WARSAW, Poland -- Germany could co-host Euro 2012 with Poland should original co-organisers Ukraine prove unable, new Poland football federation president Grzegorz Lato said on Thursday.

Poland football federation president Grzegorz Lato.
Poland's legendary player Lato, the top scorer at the 1974 World Cup, has become his country's top official overseeing the run-up to Poland's first ever hosting of the European championships.

'Germany could join it (the plan to organise Euro 2012),' Lato told Polish television when asked him what could happen should Ukraine be unable to honour their original commitment.

Earlier on Thursday, Ukraine Euro 2012 tournament organiser Evgeny Villinsky said financial problems had meant Ukraine's preparations to host the tournament hade come to a halt.

Mr Villinsky added, according to the Interfax-Ukraine news agency, that the world-wide financial crisis and ill-advised management were the reasons for the stopping of work to prepare for the tournament.

Lato added however that Poland would be able to organise it by themselves though expressed his hope that 'Ukraine would be able to finish the preparations in time.'

Source: AFP

Ukraine Currency Strengthens On Hopes Of IMF Loan

KIEV, Ukraine -- Ukraine's battered currency rose Thursday, partly on hopes the country could secure a hefty International Monetary Fund loan to overcome a severe financial crisis.


The market responded to Parliament's approval Wednesday of a series of stabilization bills, required by the IMF to receive the $16.5 billion loan.

Parliament must still approve the bills in a final reading Friday, after which the IMF would have to approve the aid package.

The Ukrainian economy, which grew strongly over the past four years, has been one of hardest-hit by the global crisis among emerging markets, and experts predict a recession next year.

The global credit crunch, coupled with problems at a key bank prompted a run on banks that cleared the system of $3.4 billion this month.

The hryvna closed at 6.15-6.25 to the U.S. dollar on the foreign currency exchange, according to the Inter Business Consulting agency, after reaching a record low of 7.2 to the dollar the day before. The currency has lost about a quarter of its value since the beginning of the year.

Currency traders also reacted to the National Bank's offer to sell dollars to all players at close to the market rate. That, combined with a more transparent policy on the foreign currency market, had been a key demand of the IMF.

"This is a very positive dynamic," said Iryna Piontkivska, an analyst with Troika Dialog Ukraine. "The market has to believe that the National Bank is really doing this."

Source: AP

From Ukraine With Baggage

LONDON, England -- With all the seriousness that it can muster, the Commmunist Party of St Petersburg has accused the new Bond girl of treachery.

Daniel Craig and Olga Kurylenko in new James Bond saga.
Its argument rests on two claims: that Bond films are Western propaganda, and that Olga Kurylenko - for that is her real name - was raised and educated free of charge by the Soviet Union, which she now implicitly attacks by appearing alongside a British spy so influential that his real-world status as the embodiment of a thousand escapist fantasies is immaterial.

Kurylenko is 28 and from Ukraine.

This means that the Soviet Union actually relinquished her to free markets and democracy at the age of 11, having thoroughly oppressed, irradiated and impoverished her country first.

Still, the St Petersburg Communists have a point.

How would we feel if Daniel Craig defected to Moscow to star in the new wave of patriotic Russian films that the Prime Minister Vladimir Putin has promised to fund?

Or if John Cleese, nurtured and lionised by British audiences from the era of Monty Python to his accession to the mythic role of Q, signed on to the payroll of resurgent Russian nationalism and gloried in their gadgets?

Outraged, that's how. But the St Petersburgers' argument does have one serious catch. The Bond film franchise has never, in any of its forms, been anti-Russian.

Even in the depths of the Cold War its chief villains were freelancers. When Smersh fielded an assassin to take out 007 once and for all, he was an Irishman.

In another caper the KGB turned its top operative loose on him, but to little effect. Remember Agent XXX? Bond does. She was the spy who loved him.

Source: Times Online

Ukraine President's Office Slams Cbank On FX Policy

KIEV, Ukraine -- An aide to Ukraine's president attacked the central bank on Thursday, accusing it of failing to stabilise the hryvnia currency despite selling almost $5 billion in three weeks of financial crisis.

Ukraine's Central Bank Chairman Volodymyr Stelmakh.
The criticism by Oleksander Shlapak, President Viktor Yushchenko's top economic aide, followed a similar call to action by Prime Minister Yulia Tymoshenko on Wednesday urging the central bank to spend its reserves to stabilise the hryvnia.

Shlapak said the bank must introduce a transparent mechanism for intervention, amid bickering between the two political camps that again on Thursday put off debate on legislation needed to secure a $16.5 billion bailout deal with the IMF.

'Over three weeks (the central bank) has spent nearly $5 billion dollars of the country's reserves, but the market has felt no positive effect of this colossal intervention,' Shlapak said in a statement on the presidential Web site.

The currency has been falling against the dollar for several weeks and lost almost 15 percent of its value on Wednesday, hitting a historic low of 7.2 to the dollar. On Thursday, it bound back to trade at 5.9-6.07/$.

Ukraine has signed a preliminary deal with the International Monetary Fund for the loan, some of which could be used to prop up the central bank's reserves.

The central bank has been intervening every day for two weeks to try to halt the hryvnia's descent. It offered buy and sell rates of 5.95/6.05 hryvnias to the dollar for the first time on Thursday.

'Clearly, the central bank has been spending the money in a far from optimal way,' Shlapak said.

'Moreover, the criteria for distributing these considerable resources are incomprehensible not just to the public but to the market players themselves. This gives rise to justified suspicions of corrupt actions in the central bank's activities,' he said in the statement on the website.

Asked to comment on this part of Shlapak's statement, the central bank said: 'The very basis of that statement is not true.'

BLAME GAME

Some analysts saw the criticism as the start of a campaign to oust Central Bank Chairman Volodymyr Stelmakh. Under the constitution, only the president can sack and appoint the central bank head, subject to a vote in parliament.

A leader of Tymoshenko's bloc, Andriy Kozhemyakin, said Stelmakh should resign and that the party would vote for this in parliament. But the opposition Regions Party, led by former Prime Minister Viktor Yanukovich, disagreed.

Analysts said it might be convenient for Tymoshenko and Yushchenko to blame Stelmakh for Ukraine's financial woes as their parties face a snap parliamentary election.

'Stelmakh could be made into a scapegoat,' said Volodymyr Fesenko, director of the Penta think tank. He added that at 69, Stelmakh was at a pensionable age, an additional factor against him.

'The comments by the premier and the president's secretariat show they want to distance themselves from Stelmakh and the central bank. Neither Tymoshenko nor Yushchenko want to take responsibility for the problems, which can only worsen.'

Others disagreed.

'At the moment, when large financial groups are interested in receiving IMF money, I don't think it's possible to have a shake-up and Stelmakh will stay after all,' said Andriy Yermolayev of the Sofia think tank.

'People within the central bank are using the bank as an instrument to save specific financial groups. The talk should be not about changing the head, but changing all the managers of the bank.'

Stelmakh is a veteran of the central bank. Last year, many analysts and politicians believed he would quit after putting himself forward as a candidate in a parliamentary election and winning a seat.

He declined to take the seat and remained in his job.

Source: Forbes

Early Election Still In Doubt As Parliament Fights

KIEV, Ukraine -- The nation still wonders when, or if, an early poll will happen. The parliamentary election date remains unclear since President Victor Yushchenko suspended his decree on Oct. 20 dissolving parliament so that the lawmakers could vote for emergency measures to combat the economic crisis.

Can Ukraine afford another snap election?
What is clear is that the date Yushchenko insists on, Dec. 14, is unrealistically early.

“Elections won’t be held until Jan. 21, if they are held at all,” said Oleksandr Chernenko, analyst of Committee of Voters of Ukraine, a non-governmental organization.

A date during the prolonged Christmas and New Year holidays would be risky because the turnout could be much less than 50 percent, invalidating the vote.

The election will cost Hr 417 million, but Prime Minister Yulia Tymoshenko’s allies have blocked the vote.

The latest attempt to allocate cash on Oct. 29 ended up just four votes short of the 226-vote majority.

Some experts say Yushchenko will cancel elections because of dwindling support for his bloc.

Our Ukraine would get from 3 to 6 percent, according to recent polls, while its main competitors, Tymoshenko’s bloc and the Party of Regions – would get more than 25 percent, according to a recent Kyiv International Institute of Sociology poll.

Source: Kyiv Post

Victor Yushchenko Attacked With His Own Weapon

KIEV, Ukraine -- The scandal over Ukrainian arms sales to Georgia continues unabated in Kiev. Head of the Rada ad hoc investigation commission Valery Konovalyuk from the Party of Regions accused Ukraine’s Government of “pressurizing” his colleagues and him, but despite this fact, he promised to complete the investigation he started and ask President Yushchenko unpleasant questions.

Valery Konovalyuk
In addition, Russian President Dmitry Medvedev promised “not to forget” those who had armed the Mikhail Saakashvili regime. However, according to the information of Kommersant, Moscow doesn’t know yet how to punish Kiev for supporting Tbilisi.
Investigation mania

After a short period of lull, a scandal over Ukraine’s arms supplies to Georgia broke out anew, with Head of the Rada ad hoc investigation commission Valery Konovalyuk from the Party of Regions being the key newsmaker.

Yesterday Mr Konovalyuk held a press conference in Kiev, where he told reporters about the progress in investigating the country’s high-ranking officials’ power abuse. According to the MP, during its work, the commission managed to collect so much proof that it will be enough for making Ukraine’s top politicians answer. “We have enough evidence to raise the question of bureaucrats’ responsibility,” the head of the commission stated.

Saying that he doesn’t mean impeaching Mr Yushchenko yet, Mr Konovalyuk added that his investigation bodes ill for the President. “We are preparing a report to be delivered in the Parliament. We have coordinated it with several parties that, regardless of the political crisis in the country, we will present the report in the Rada.”

However, before making the collected data public, Valery Konovalyuk and his colleagues plan to tour Georgia and South Ossetia to collect extra information. “It will allow us to make preliminary conclusions, which will prompt the Ukrainian Prosecutor General’s Office and other law enforcement bodies to react to the irregularities the commission has found,” the MP said complaining that he has to work under the Government’s pressure. “The Government pressurizes us. We warned that various provocations will be carried out to impede the commission’s work, but we are determined to take the investigation to the end.”

Those Persecuted

Mr Konovalyuk’s commission was set up on September 2. By the way, this date is considered the outset of the current political crisis in Ukraine. On that day the “orange” coalition, formed by the Yuliya Tymoshenko Bloc (BYuT) and the pro-presidential bloc “Our Ukraine – People’s Self-defense”.

The democratic alliance collapsed after the BYuT and the Party of Regions, despite Our Ukraine’s resistance, took through the Parliament laws that significantly cut the head’s of state powers.

Victor Yushchenko was denied the right to participate in the Government’s meetings and legalized the impeachment procedure – it now requires 226 MPs’ signatures (there are 450 members of the Rada in total).

The Party of Regions intended to adopt a resolution to recognize Abkhazia and South Ossetia, but this idea was not endorsed by the majority, and it all ended with setting up a commission to investigate arms supplies to Georgia.

Within two months the commission made no revealing documents public, which would point to the Government’s power abuse when exporting Ukrainian weaponry. Nevertheless, the commission’s members often drop hints that it was President Yushchenko who sanctioned violating the law.

Valery Konovalyuk stated on several occasions that his commission has found facts of illegal arms supplies to Georgia, which was controlled by the President. Much speculation was caused by the commission head’s statement that the Ukrainian Government supplied a Buk-M1 missile system, which guarded Ukraine’s border.

Last time Mr Konovalyuk “agitated” the public on October 8, when he stated that the commission got information from the treasury that the lion’s share of the funds, raised from arms sales, was directed neither to the Ukrainian federal budget nor the Defense Ministry.

According to the MP, Ukraine has sold weaponry worth $2 billion since 2005, whereas the budget received only $160,000 of it. It need be said that no documents were then demonstrated to the public.

A crime Without Elements

Victor Yushchenko’s administration denies violating any international legal norms as far as military and technical cooperation with Georgia is concerned. Yesterday head of the Military Security Department of Ukraine’s Security Council Sergei Khimchenko stated that Kiev “cooperates with Tbilisi in accordance with its national interests and international law”.

According to him, the UN Security Council, the OSCE, the EU or any other IOs have never imposed any sanctions or embargoes on Georgia. Mr Khimchenko made no secret of the fact that Ukraine increased its military export volume to Georgia by third in 2007-2008, adding that the two countries cooperate according to an agreement of July 4, 1997. “Approximately to 40%,” he said when asked to what extent arms supplies grew.

Moreover, Mr Khimchenko stated that Ukraine will keep on supplying weaponry to Georgia in accordance with concluded agreements. “We are not supplying arms there now, but the agreements we signed before, are valid,” the official told Kommersant.

At the same time he denied accusations of supplying arms to Georgia during the military conflict and Ukrainian soldiers’ participation in hostilities. According to him, the latest arms delivery was according to a contract signed a year ago.

Mr Khimchenko’s statement was a response to Russian officials’ accusations of illegally arming Georgia. Early this month Russia’s Prime Minister Vladimir Putin called Ukraine’s arms supplies to Georgia a “crime” when receiving is Ukrainian counterpart Yuliya Tymoshenko in Moscow.

“I believe that there can be no worse crime than arms supplies to a conflict zone. Missile systems were used to kill soldiers, which can’t but worry us,” Mr Putin said after talks with Ms Tymoshenko. Speaking about Ukrainian military specialists’ participation in the August five-day war, the Russian Prime Minister cut it short, “It was a crime.”

Yesterday Russia’s officials once again brought up this issue. During a meeting of a commission on military and technical cooperation President Dmitry Medvedev stated that, in its foreign policy, Russia will consider the actions of the countries that supplied arms to the Mikhail Saakashvili regime.

Although Medvedev did not mention Ukraine, his statement implies that Moscow views Kiev as the main culprit. “We are aware that several states supplied arms to the Mikhail Saakashvili regime, which encouraged it to launch aggression, and now they are reloading the regime with extra weaponry,” Mr Medvedev said. “Unfortunately, several states that are friendly to Russia, took part in it. We won’t forget it. We will consider it in our foreign policy.”

Yesterday Russian Deputy Foreign Minister Sergei Ryabkov explained the essence of Moscow’s claims. According to the official, there are a lot of international documents regulating arms trade, which were signed by Ukraine’s officials.

“These include the OSCE document of 1993 about conventional weapons and small arms. But in Ukraine’s case heavy assault arms were delivered. Kiev doesn’t even deny that it supplied it to Georgia shortly before the military conflict,” Mr Ryabkov told Kommersant.

“We are going to raise this issue in all international formats, and we regret that the Ukrainian party is no even ashamed of its actions.” The diplomat complained that it is impossible to punish Ukraine with international sanctions, “Sanctions are the UN Security Council’s prerogative. All our attempts to impose embargo on arms supplies to Georgia were blocked by the countries conniving at the aggressor.”

Interestingly, Moscow has no own proof of the Ukrainian Government’s illegal arms trafficking. “I have no information that Russia is investigating the matter,” Igor Lyalkin-Frolov from the Russian Foreign Ministry Information and Press Department told Kommersant. “We’ll see what results Ukraine’s parliamentary commission reports.”

It is not ruled out that Russia will respond with concrete actions at the final stage of Ukraine’s electoral campaign – voting has been postponed.

Source: Kommersant

Conditions Still Poor, Unhealthy In Ukraine's Prisons

KIEV, Ukraine -- Ukraine’s draconian prisons breed disease, are overcrowded and inmates are treated inhumanely. Prisons, by design, aren’t supposed to be pleasant places. But they’re also not supposed to be deadly places, as they are all too often in Ukraine – a consequence of under-funding, overcrowding, brutality and poor medical care.

Nina Karpacheva, Ukraine’s human rights ombudsman.
“Those taken into custody and placed in SIZO [pretrial detention centers] should not be sent to the morgue afterwards,” said Nina Karpacheva, Ukraine’s human rights ombudsman.

But too many of them are.

The Ukrainian penal system consists of 183 institutions with 150,000 inmates. The mortality rate in prisons rose by 33 percent in the first seven months of the year, to 1.2 cases per 1,000 inmates, compared to the same period a year ago. The situation was worse in pre-trial detention facilities, according to the State Penitentiary Department. Mortality increased 47 percent, to 2.8 deaths per 1,000 inmates in the first seven months of 2008, compared to the same period a year ago.

Karpacheva has been investigating the situation and is calling for improvements.

“Unfortunately, the problem with Ukrainian prisons is principally one of a systematic and well-established nature, which can not be changed immediately. And only essential legislative and judicial reforms can solve the major problems of Ukrainian penitentiaries,” Karpacheva said.

Among her ideas are simply sending fewer people to prison or detention centers by setting higher standards for police who, she contends, are still making too many dubious arrests. Judges should also make more use of non-prison alternatives for punishment, especially for juveniles.

The lack of financing, certainly, is an issue. Karpacheva said that less than Hr 3 was spent in 2007 daily for the treatment of those ill with tuberculosis and notes that prison employees are still poorly paid.

Most deaths in confinement, she said, are a consequence of poor medical care, with people dying of untreated or undiagnosed illnesses. “Efficient diagnostic methods in Ukrainian penitentiary establishments should be the first step to solving tuberculosis, AIDS/HIV and high mortality rate problems,” Karpacheva said.

Among the deadliest places, Kyiv’s pre-trial detention center No. 13 stands out with 24 recorded unnatural deaths among 2,800 inmates in a four-month period in 2007 alone. Of the 24 deaths, two were classified as murders, while three were suicides.

The rest, Karpacheva said, “were the result of illnesses and the incapability of medical personnel to save a human life. An analysis of the illnesses that caused death showed that, among 17 inmates, only 6 could have been infected after arriving at the facility. The rest were when they were already ill, but their diseases were not diagnosed in time.”

And some cases are just tragic mysteries, such as the death in 2007 of Serhiy Karashchenko. According to Karpacheva, the 34-year-old Karashchenko was transferred on July 13, 2007, despite obvious symptoms of illness, from the temporary police jail in Bila Tserkva to a pre-trial detention center in Kyiv.

When he arrived, Karashchenko was diagnosed with an advanced stage of pulmonary tuberculosis and placed in quarantine. Within 34 days, he was dead.

Less than two months earlier, on May 24, 2007, a hospital in Bila Tserkva provided a medical certificate declaring Karashchenko to be in good physical shape – even though he weighed only 47 kilograms despite being 180 centimeters tall.

Untreated physical illnesses are not the only problem. Undiagnosed psychological problems can have deadly consequences, too. Such was the case involving an inmate who strangled a cellmate.

Court medical experts recognized the inmate, Serhiy Kulishev, a prisoner of Kyiv pre-trial detention facility No. 13, as mentally and emotionally unstable. He should have been sent to solitary confinement and been kept under constant observation by a psychiatrist. Instead, he was placed in a prison medical center with two men, one of whom he strangled.

Lack of proper psychological care is one of the major problems in penitentiaries, Vasyl Koshynets, head of State Penitentiary Department, told Channel 5 TV. He told the news program that there are 600 inmates for every psychologist, who work “for nothing.”

Self-inflicted injuries and other types of violence happen frequently.

According to the United States State Department, which gives annual human rights ratings, such incidents are often “a result of harsh treatment of prisoners by facility staff, who beat prisoners and destroyed their food during the year the media reported several incidents of prisoner-on-prisoner violence in pretrial detention facilities with fatalities.”

Indeed, human rights groups have been expressing their concerns. On March 27, for example, 40 inmates in a Kharkiv Oblast prison hurt themselves to protest the “horrible conditions and inhumane treatment from personnel,” according to the Helsinki Human Rights group, citing a Vinnytsya human rights group.

However, in Holos Ukrainy newspaper, Ukrainian General Prosecutor Oleksandr Medvedko denied many claims of abuse and abusive conditions. He said the accusations are “constantly supplemented by vivid and emotional, though, generally unproven description of pictures of mass torture, supposedly widely used against prisoners by the administration of [pre-trial detention centers] and penal institutions.”

Overall, the U.S. State Department – in its annual human rights assessment – still considers Ukrainian prisons and detention centers as not meeting international standards. Karpacheva said the worst place in Ukraine might be the Sevastopol temporary police holding facility.

“Stench, unsanitary conditions, lack of fresh air and daylight, concrete floors … Every second cell doesn’t have individual sleeping places — inmates (including women) are forced to take turns sleeping on a bed,” Karpacheva said. “Despite the established limit of 82 people, the facility hosts 112 people every day on average.” She also said 10 percent of inmates in a survey had been detained for more than 10 days, beyond the limits set by Ukrainian law for pre-detention confinement.

Despite the government's permission for visits by independent human rights monitors, Oleksandr Bukalov, leader of Donetsk Memorial, a rights group, said the public has little oversight over prisons. “The state penitentiary department demonstrates a strong unwillingness to promote public control in its establishments. Its administration is satisfied with the situation where declarations about public control are proclaimed, but in reality, do not exist,” Bukalov said.

Overall, conditions are improving slowly, according to the U.S. State Department. Even Karpacheva said that “conditions in many prisons and pre-trial facilities were essentially improved and now meet international standards.” But she also said most of the changes are “small improvements.”

Source: Kyiv Post

Faina Crew Still Waits For Rescue

KIEV, Ukraine -- The fate of the ship’s crew still unknown despite efforts on many fronts. “Tell them, I am alive.” That is the message that Yevgeniy Grigoriev, a Latvian hostage on the pirate-captured vessel MV Faina, wanted to pass on to his worried relatives. Grigoriev was speaking by telephone with Nina Karpacheva, Ukraine’s human rights ombudsman, who recently returned from a trip to Kenya.

A 20-man crew is being held hostage aboard the MV Faina.
At a press conference on Oct. 27 in Kyiv, Karpacheva gave an update on the state of negotiations to free the 20-member crew of mostly Ukrainians. The crew and their arms-laden vessel were taken hostage on Sept. 25 by Somalian pirates who are still demanding a multi-million-dollar ransom.

On Oct. 21, Karpacheva was able to speak from Kenya by telephone with other members of the crew, including Grigoriev. “The negotiation process to liberate the Faina crew is coming to a decisive stage,” Karpacheva told journalists.

At last word, 17 Ukrainians, 2 Russians and 1 Latvian were alive on board – a fact Karpacheva was able to confirm during her telephone conversation. Tragedy, however, struck soon after the seizure, when the Russian crew captain died of natural causes.

Karpacheva said she is hopeful the standoff will have a happy ending. Relatives of the crew, meanwhile, have reportedly been trying to raise money to free their loved ones.

In other meetings on her trip, Karpacheva said that Mohamed Ali Nur, Somalia’s ambassador to Kenya, assured her that “pirates never kill the crew.”

The ombudsman said negotiations, not force, should be used to end the stalemate. “Everything possible has to be done so that power is not applied under any circumstances,” she said.

She joined the rising chorus of international voices calling for stronger action against piracy at sea, including stronger patrols. She also said that she gained an understanding of the extent to which Somalia, which is caught up in an Islamic insurgency, has become a failed and lawless nation.

“The last two generations of Somalians were brought up without a school education,” Karpacheva said. “These youngsters know nothing but how to hold a gun and follow the orders of those who stand behind them. These are the type of people who captured the vessel. The youngest of them is only 14. It’s essential to find out who is really manipulating these boys and runs this black market if we want to fight the piracy.”

Karpacheva also called on the owner of the ship, Vadim Alperin, to pay compensation to the kidnapped crew. “I truly hope he will be guided by moral values as well,” Karpacheva said.

The ship contains a cargo of 33 battle tanks and heavy weaponry. Its seizure has focused international attention on the pirate menace off the Horn of Africa. Ships of the U.S. Navy’s 5th Fleet have surrounded the Faina for more than a month to be sure the cargo does not get into the hands of insurgent groups linked to al-Qaida.

According to the Associated Press, the pirates’ spokesman, Sugule Ali, said they received a fax on Oct. 17 from Viktor Murenko, head of ship operator Tomex Team, saying Kenya had declined to pay any ransom for the cargo it claims.

Source: Kyiv Post

A High-Ranking Smoker Keeps Cigarette Prices Low In Nation

KIEV, Ukraine -- Ukrainian Finance Minister Victor Pynzenyk can touch the clouds without opening the windows on the eighth floor of his government office.

Ukrainian Finance Minister Victor Pynzenyk.
He sits in his own cloud of dense cigarette smoke while drafting anti-crisis plans for the nation.

One of the best economists in Ukraine, he is also one of the most notorious chain smokers.

“During the five minutes that I was there, he had five cigarettes,” said parliamentarian Oleh Lyashko from Yulia Tymoshenko’s party, describing the minister’s vice.

Public health advocates blame Pynzenyk for some of the cheapest cigarettes and, consequently, one of the highest smoking rates in the world by resisting meaningful tax hikes on the deadly products.

About 40 percent of the nation’s adults light up regularly, while many popular brands still sell for $1 or less a pack. In Western nations that have cut smoking rates, cigarette taxes have pushed retail prices to $5 or more per pack.

“Enough cringing before tobacco giants,” said Hanna Hopko from the Washington, D.C.-based non-profit organization, Campaign for Tobacco-Free Kids.

Together with some 20 other anti-smoking activists, she picketed the Cabinet of Ministers earlier this week.

“The government has decided to raise taxes on virtually everything - alcohol, cars, gas and land in the face of a financial crisis. But cigarettes seem to be omitted on purpose,” said Hopko, referring to the latest economic plan drafted by Pynzenyk.

Based on World Health Organization (WHO) research, higher cigarette prices are the most effective way to get adults to quit smoking and to prevent children from starting.

The finance minister, however, is against the hike. “Raising excise taxes will result in smuggling from Russia, Belarus and Moldova,” Pynzenyk said. “Money from cigarette sales will go to these countries.”

Driven by budget needs for flood relief in western Ukraine this summer, Prime Minister Yulia Tymoshenko managed to push a 10 percent per pack tax hike through parliament. She wanted taxes on cigarettes increased much more.

But her ally Pynzenyk, together with President Victor Yushchenko opposed such an abrupt increase, echoing tobacco industry arguments that predict the black market would surge, raising even less for state coffers.

They failed, however, to suggest an alternative on how to reduce smoking today.

Tobacco ads still prevail over social campaigns in outdoor and print media and also find their way onto late-night television and radio.

A stricter, but still not complete, nationwide ban on advertising will only come into effect next year, when billboard ads will be removed.

The Kyiv City Council took a bold step and partially restricted smoking in public places like bus stops, schools and subways.

But a single trip through the underground passageway at Independence Square shows that people ignore the rule continuing to smoke even next to the “no smoking” signs.

Lawmakers went further and banned cigarettes from workplaces and government buildings altogether.

But many, including Pynzenyk, continue to smoke inside.

Parliament and other government toilets stink of tobacco fumes.

The fact that Ukraine is a smoker’s paradise is written even in travel guides. “You can expect a lot of second-hand smoke in just about any restaurant or bar, although under law they must offer no-smoking sections,” reads the latest edition of the Thomas Cook travel guide.

According to the WHO, more than 100,000 Ukrainians die of diseases caused by smoking annually.

Nevertheless, certain politicians insist that raising taxes will contribute to smuggling from the neighboring countries.

“Smuggling is a corruption problem. Stop telling us tales,” said Hopko of Tobacco-Free Kids. “Let’s fire customs officials or give them fair wages to avoid illicit trade, otherwise we’ll all go up in smoke.”

Health advocates agree that smuggling may become an issue if prices rise drastically above those in Russia or Moldova. A pack of Marlboro cigarettes in Ukraine, however, is still cheaper by a third compared to a Russian pack. So there is room for improvement.

“Moldova won’t feed Ukraine because Romania is closer and more profitable,” said Hopko, slamming Pynzenyk’s reasons for freezing excise taxes.

The finance minister, however, remains at odds not only with anti-smoking activists.

“Ukraine has the lowest taxes on cigarettes in the world, three to four times less than other countries,” Tymoshenko said in advocating for even higher duties. The first hike enforced in September generated an additional $200 million for Ukraine’s budget.

A further increase of Hr 1.50 per pack could bring another billion dollars to the budget, specifies a new bill registered in the parliament.

Why the measure failed to make it into Pynzenyk’s anti-crisis proposal is open for discussion. The finance minister, drawing up rescue plans for the nation, was too busy to comment.

Oleh Lyashko from Tymoshenko’s party suggested that Pynzenyk did not want to pay more for the cigarettes he smokes in large quantities.

“It’s impossible to stay long in his office, and he has really bad breath,” said Lyashko, who smoked for 15 years and quit recently.

“He told me that they raised taxes two months ago and did not want to do it so soon again,” he added, denying a link between the minister and the tobacco industry.

Source: Kyiv Post

Ukraine Factions Unite To Secure IMF Loan

KIEV, Ukraine -- Ukraine’s Parliament put aside weeks of political infighting on Wednesday to pass legislation aimed at securing an emergency loan from the International Monetary Fund as the country feels the effects of the global financial crisis.

Ukraine's Prime Minister Yulia Tymoshenko applauds as she attends a parliament session during a debate on anti-crisis measures in Kiev October 29, 2008. Ukraine will not receive billions of dollars in aid from the International Monetary Fund to stabilise its economy unless parliament acts quickly to approve enabling legislation, parliament's chairman said on Wednesday.
The party of the prime minister, Yulia V. Tymoshenko, had put forward its own legislation. But it said it was burying its differences with the president, Viktor A. Yushchenko, and would vote for his proposals in order to secure the funds, which are needed to prop up the country’s ailing markets and relieve pressure on the public finances.

“Now we have put our political ambitions off to the side,” said Nataliya Korolevskaya, a member of Ms. Tymoshenko’s party. “The health of the economy is now more important.”

Together, the two parties have 227 votes, enough to secure the passage of the legislation in the 450 seat Parliament.

Ukraine’s economy has been struggling, especially because of falling steel prices. The IMF is offering Ukraine a loan of as much as $15 billion to shore up the country’s finances as foreign investors flee, but requires a series of belt-tightening measures and spending cuts.

In recent weeks, a delegation from the fund has been meeting with representatives of Ukraine’s prime minister and president, seeking assurances that next year’s budget will be balanced,

However, the political differences between Mr. Yushchenko and Ms. Tymoshenko had threatened to derail agreement.

The two have alternately collaborated and competed since they rallied crowds together on Independence Square in Kiev during the protests known as the Orange Revolution in 2004. Most recently, Mr. Yushchenko’s Our Ukraine bloc was in a coalition with Ms. Tymoshenko’s party, an arrangement that gave her the prime minister’s post.

But the two split after the Russian invasion of Georgia in August. Mr. Yushchenko accused Ms. Tymoshenko of muting her criticism of the Russian military action to please the Kremlin. He has also been more vocal in his support of Ukrainian membership of NATO.

The political turmoil has coincided with a steep economic decline. The international agency Fitch Ratings downgraded Ukraine’s sovereign debt rating and issued a negative outlook for the country.

A Ukrainian shipping company, Industrial Carriers, has gone bankrupt. The government has frozen rail tariffs for steel companies, and as foreign investment dries up, speculators are betting on a decline in the national currency.

In response, Ukraine plans to nationalize some commercial banks, which have liquidity problems, a member of Parliament told the IMF delegation on Friday.

Source: The New York Times

Russia Accuses Kiev Of Using Holodomor To Divert Attention

UNTIED NATIONS, NY -- Ukraine is using the issue of the 1932-33 famine to divert the nation's attention from the ongoing political and economic crisis, Russia's envoy to the UN said on Tuesday.

Russian Ambassador to the UN, Vitaly Churkin.
Ukraine has been seeking international recognition for the Stalin-era famine, known as the Holodomor, as an act of genocide by the Soviet authorities following a similar move by Ukraine's Supreme Rada in late 2006.

The United Nations General Committee refused last Thursday to include the famine on its agenda, supporting Russia's recommendation to exclude the Holodomor from the UN session.

Said Vitaly Churkin: "The Ukrainian leadership is using this historical humanitarian tragedy for its own political ends, as well as to spread ethnic animosity... and divert the attention of its own people from the ongoing political and economic crisis in Ukraine."

He said the issue was being politicized, as was evident from, among other things, Ukraine's attempt to include the issue in the UN agenda.

A senior Ukrainian MP said on Friday that the UN's recognition of the Holodomor would give Kiev legal grounds to claim moral and financial damages from Russia.

The European Parliament adopted a resolution on Thursday declaring the famine of 1932-1933, that caused the deaths of millions of Ukrainians, a crime against humanity.

The European Parliament stopped short of using the word "genocide." Its resolution "recognizes the Holodomor (the artificial famine of 1932-1933 in Ukraine) as an appalling crime against the Ukrainian people, and against humanity."

According to the resolution, the Holodomor "was cynically and cruelly planned by [Soviet leader Joseph] Stalin's regime in order to force through the Soviet Union's policy of collectivization of agriculture against the will of the rural population in Ukraine."

Estimates vary widely as to the number of deaths in Ukraine in the early 1930s caused by the forced collectivization, along with the devastating purges of the Ukrainian intelligentsia, religious leaders and politicians under Stalin. Some sources cite figures of over 7 million.

The EU parliament also urged "the countries which emerged following the break-up of the Soviet Union to open up their archives on the Holodomor in Ukraine of 1932-1933 to comprehensive scrutiny so that all the causes and consequences can be revealed and fully investigated."

Russia has consistently rejected Ukraine's interpretation of the tragic events.

In July 2008, the Parliamentary Assembly of the Organization for Security and Cooperation in Europe adopted a resolution that condemned the famine but stopped short of recognizing it as an act of genocide

Source: RIA Novosti

Yatsenyuk: Parliament Will Adopt Unpopular Conditions In Exchange For IMF Aid

KIEV, Ukraine -- The International Monetary Fund won agreement Monday from the speaker of Ukraine's parliament to enact potentially unpopular conditions for a crucial $16.5 billion loan, as it grew clearer the IMF may have to help other emerging markets in Europe in the grip of the global financial crisis.

Uktaine's Nikopol's Ferroalloy Plant may have to shut down on Nov. 1 due to slumping export prices.
The IMF, which is also talking to Hungary and Belarus, is requiring that Ukraine adopt strict and likely unpopular measures in what could become a new dose of austerity for emerging economies in a region that had shown strong growth in recent years but now are suffering as investors and money flee.

Under the IMF's expected proposals, the fund will provide regular disbursements of dollars to Ukraine in return for tough domestic measures such as lowering inflation, reducing budget deficits and government spending.

The hope is that the availability of instant dollars will help Ukraine save its banking systems, support its faltering currency and avoid defaulting on its debt. The IMF hasn't made the conditions public, but provisions in draft legislation indicate they might include reducing government wages and pensions and subsidies for household utilities, as well as increasing taxes on gasoline, alcohol, tobacco and car imports, say experts.

It won't be an easy ride in Ukraine's crisis-hit parliament though. Prime Minister Yulia Tymoshenko is fighting an order by President Viktor Yushchenko to hold

early parliamentary elections in December. Each main parliamentary faction has put forward its own anti-crisis laws, some of which coincide with the IMF requirements and speaker Arseniy Yatsenyuk said he will try to work out a single package that all can agree on.

"Parliament will meet until the moment when the necessary package of economic legislation has been passed," Yatsenyuk told reporters Monday. "We have no choice. It is not a political issue, it is an issue of the country's vital activity."

Analysts say Ukraine is in for a painful economic downturn. Output in the steel industry, which accounts for 6 percent of the GDP and 40 percent of the country's exports, is down by 30 percent. Meanwhile the hryvna currency plunged to a historic low of 6.01 to the dollar last week as a run on banks stripped the banking sector of $3.4 billion.

Hungary has also faced currency difficulties, which also prompted its government to approach the IMF for emergency loans.

Though details of the Hungarian package will not emerge for a few days, the IMF said the European Union, individual governments and other institutions will be involved. On Oct. 16, the European Central Bank said it was ready to lend Hungary up to 5 billion euros ($6.2 billion) to support liquidity on its foreign exchange market.

The IMF said a "broad agreement" for a "substantial financing package" has been agreed with the Hungarian authorities.

The Hungarian and Ukrainian deal is unlikely to be the last. Belarus is expected to meet with an IMF delegation this week. The IMF has already agreed to loan Iceland $2.1 billion.

"The inescapable bottom line is that the IMF's work in emerging Europe has only just begun," said Neil Shearing, emerging Europe economist at Capital Economics.

Shearing says those countries with larger needs for foreign-currency financing than both Hungary and Uktraine may also have to go to the IMF for emergency assistance. He cites Turkey, which needs nearly $190 billion in foreign financing in 2008, as a likely candidate.

"A recent visit to Istanbul has convinced us that Turkey is much closer to calling on the Fund for financial assistance than many in the markets believe," said Shearing.

Shearing says other countries touted as possible IMF recipients include Romania, Estonia, Latvia and Bulgaria, especially if they continue to use up their foreign exchange reserves paying for imports, supporting their currencies and rolling over debts.

Neil Mellor, currency strategist at Bank of New York Mellon, thinks the Baltic countries and Bulgaria are particularly exposed to the turmoil in the global financial markets.

He said Latvia, Estonia and Lithuania have heavy foreign currency needs for things like funding trade deficits and debt repayments of 60 percent, 52 percent and 35 percent of gross domestic product, a factor that can weigh heavily on a country's currency. Bulgaria needs 55 percent of economic output.

"Moreover, these countries also have large gross external liabilities (short and long term debt), led by Latvia with 120 opercent of GDP, and followed by Estonia with 100 percent and Bulgaria with 97 percent," said Mellor.

Though the IMF only has around $200 billion to distribute, it is thought that Western governments may supplement the available pool. There was even speculation last week that the IMF was planning a $1 trillion injection into emerging markets to stave off defaults.

Analysts said the Ukraine and Hungary announcements suggest there's little or no chance that the IMF will sponsor a more lenient comprehensive approach to help countries seriously affected by the global financial crisis.

"This illustrates how the IMF isn't stepping away from its conditionality approach and therefore leave us rather doubtful about an IMF-led effort for emerging markets this week," said BNP Paribas currency strategist Elisabeth Gruie.

Source: AP

Ukraine: Concern About Russia

PARIS, France -- Foreign Minister Bernard Kouchner of France said Tuesday that Moscow had been issuing Russian passports in Crimea, a region in southern Ukraine where Russia’s Black Sea fleet is based.

French Foreign Minister Bernard Kouchner
“We all know that they are handing out Russian passports over there,” Mr. Kouchner said in an interview with Kommersant, a Russian online newspaper.

The government of Ukraine has said it wants the fleet to leave the Crimean base in Sevastopol when its lease runs out in 2017. But the Russian naval authorities have indicated that they want to retain the base.

Mr. Kouchner said Russia might try to make advances in Crimea after the success of its military operations in Georgia in August.

Source: The New York Times

Ukraine Political Crisis Blocks IMF Loan

KIEV, Ukraine -- Ukraine's efforts to receive an emergency loan from the International Monetary Fund were stalled Tuesday as a political standoff among ruling politicians blocked legislation to accept the rescue.

Members of Ukraine's Prime Minister Yulia Tymoshenko's bloc swarm around Speaker of the Ukrainian Parliament Arseniy Yatsenyuk (no jacket) as they try to disrupt debate on anti-crisis measures in Kiev October 28, 2008.
Ukraine is hoping the $16.5 billion loan will help it overcome a severe financial crisis, as it battles a drastic fall in exports, a weakened national currency and a shaken banking sector.

But a standoff between President Viktor Yushchenko and Prime Minister Yulia Tymoshenko over a planned election is threatening to stall the deal. Tymoshenko is fighting Yushchenko's order to hold early parliamentary elections, in which she risks losing her job.

Parliament was to consider Tuesday a series of competing bills aimed at overcoming the financial crisis, but the pro-Tymoshenko lawmakers blocked Parliament's presidium in protest, stalling a vote on the IMF plan.

The IMF hasn't made its conditions public, but provisions in draft legislation indicate they might include reducing social spending and raising taxes to adopt a balanced budget and stem 16-percent inflation.

Ukraine is one of hardest-hit by the financial crisis among emerging markets. Output in the steel industry, which accounts for 6 percent of the GDP and 40 percent of the country's exports, is down by 30 percent on a fall of global demand.

That has widened the trade deficit to $12.5 billion so far this year. In the absence of foreign currency flowing into the country, the hryvna plunged to a historic low of $6.01 last week as a run on banks stripped the banking sector of $3.4 billion.

Lawmakers were to resume deliberations in the afternoon and there was hope they would muster the necessary votes. A Tymoshenko ally said his faction was ready to approve a bill submitted by the president.

Source: AP

Ukraine's IMF Loan Endangered By Feud

MOSCOW, Russia -- Ukraine's feuding president and prime minister welcomed a proposed emergency bailout by the International Monetary Fund on Monday, but a fresh round of finger-pointing by their aides left it unclear whether the two could agree on legislation needed to win the $16.5 billion loan.

Ukraine's 'odd couple' must set aside their differences, for the sake of their country.
As Ukraine's currency fell to a historic low and its critical steel industry urged global action to stop a devastating slide in prices, Prime Minister Yulia Tymoshenko scheduled a vote on the legislation for Tuesday and called on the nation's fractured political leadership to unite in the face of "global financial Armageddon."

Her former ally, President Viktor Yushchenko, also endorsed quick action on a legislative package that officials say includes unpopular spending cuts and other measures intended to strengthen Ukraine's wobbly banking sector.

But the outcome of the vote was uncertain Monday night, as each camp accused the other of trying to use the economic crisis to get its way in an extended political standoff over whether the country should hold early parliamentary elections.

Yushchenko and Tymoshenko were allies in the 2004 street protests known as the Orange Revolution, which brought Yushchenko to the presidency. He dissolved parliament this month after the collapse of his coalition with Tymoshenko and has called for elections in December that could oust her as prime minister. Tymoshenko opposes the elections and has blocked legislation needed to finance them.

In a statement Monday, Andriy Goncharuk, deputy chief of the president's secretariat, accused Tymoshenko of trying to use the economic crisis to "pursue an alternative foreign policy" and the IMF legislation to thwart the elections.

"Unfortunately, the position of the prime minister's office reduces the chances for the country to receive" the IMF loan, he said, adding that "mass unemployment" could result. He argued that elections were necessary to resolve the political stalemate in Kiev, which has increased investors' anxiety over the economy.

But Hryhoriy Nemyria, deputy prime minister for European integration, said it was Yushchenko who was putting the IMF bailout in jeopardy, accusing the president's allies of demanding a vote on funding for elections before they will consider the financial package.

"We cannot accept that," he said by telephone from Kiev. "It's a matter of priorities, and what can be a higher priority than dealing with the economic crisis?"

Nemyria added that it would be irresponsible for the government to spend $80 million on early elections during the crisis, especially given that Ukraine has had parliamentary elections in each of the past two years and that a presidential vote is scheduled for next year.

Elections would also make it more difficult for the government to implement the painful reforms requested by the IMF and needed to rescue the Ukrainian economy, he said. "There would be pressure on lawmakers to be populist, and they would criticize the government for agreeing with the IMF on policies that are very difficult and sensitive."

The largest party in the legislature, the opposition Party of Regions, has already come out against the IMF proposal, arguing that it is unnecessary and could further damage the economy. Its position makes it unlikely that the legislation would pass without some kind of truce between Yushchenko and Tymoshenko.

Ukraine's currency, the hryvna, has plunged more than 20 percent against the dollar, amid a run on banks that has drained more than $1 billion from deposits and a collapse in the price of steel, the nation's main export.

About 500,000 people are employed in Ukraine's steel industry, and layoffs of tens of thousands have already been announced. The government said Monday it was appealing to world metal producers to cut production and bolster prices.

Many analysts say the economy is fundamentally sound. But most of Ukraine's leaders agree that it makes sense to adopt the IMF legislation and get access to the loan in case it is needed, said Igor Borakovsky, director of the independent Institute for Economic Research and Policy Consulting. "The situation is not a full-fledged crisis, but everyone understands that externally and internally, the situation could radically worsen."

"In principle, the politicians are more or less very close in terms of the economics," he added. "But when it comes to the politics of the decision, it becomes very difficult. There is a very specific competition among them to take credit for the rescue, to be seen as the savior of the country, and right now, this competition is extremely detrimental."

Source: Washington Post

Hryvnia, Ukraine Stocks Fall Despite IMF Deal

KIEV, Ukraine -- News that the IMF and Ukraine had reached a preliminary deal on a $16.5 billion loan failed to lift spirits on the currency market on Monday, with the hryvnia hitting a new record low, dealers said.


They said a lack of dollars has pushed the currency to 6.2 for the dollar . Some suggested unresolved political disputes would prevent quick approval of measures needed to secure the loan.

Officials have said that they could use the loan to bolster central bank reserves, which have been depleted as it intervenes to prevent the hryvnia slipping further, and to prop up the banking sector.

"The market needs money, not announcements," said one dealer. "Even if they give the money, then it will be like before -- in tranches and every tranche will be debated for a long time."

The central bank sold dollars at 5.4 hryvnias, but dealers said not all demand was met.

Dealers and analysts said even the possible reintroduction of a rule requiring exporters to sell their dollars, as suggested by the central bank, would not help the hryvnia.

Steel exporters -- key force behind Ukraine's economy -- have cut output and sold little in recent months, analysts said.

"So far we're only falling, and a figure such as 7 (hryvnias to the dollar) is not so unrealistic as it seemed two weeks ago," the dealer said.

Credit default swaps -- an indication of risk that Ukraine could default on its debt -- rose further to 2,600 basis points from just 300 basis points in August, when sentiment for the region ebbed away after Russia's brief war with Georgia.

The tiny stock market .PFTSI <0#.pftsi> sank further. Since the start of the year, 80 percent of its value has been wiped out, 56 percent since early September. On Monday, it fell almost 4 percent.

The IMF loan is contingent on parliament passing measures to shore up the banking sector and balance the budget. But protesting members disrupted sittings last week and its chairman warned that Ukraine risked losing the credit if that continued.

Source: Telegraph UK

Over 80% Of Ukrainians Do Not Trust Yushchenko - Poll

KIEV, Ukraine -- - Ukrainians are rapidly losing trust in their president, Viktor Yushchenko, according to an opinion poll carried out by the Public Opinion-Ukraine foundation and published on Monday.

Ukrainian President Viktor Yushchenko is quickly losing the public trust.
A total of 81.7% of respondents said they do not trust their leader. In January, the figure was 55.6%. The number of those who trust the president has fallen to 10.4% from January's 34.8%.

The October poll showed that 67.6% of respondents did not approve of Yushchenko's recent decree to dismiss parliament and call early elections. The move was supported by 17% of those polled.

Yushchenko signed the decree on October 9 and called early elections for December 7. However, he later suspended his decree due to the worsening financial crisis.

When asked who they would vote for if presidential elections were to be held tomorrow, 23% of respondents said they would vote for the current prime minister, Yulia Tymoshenko. The opposition pro-Russian Party of Regions leader Viktor Yanukovych would gain 21.1%, and Yushchenko a mere 4.3%.

The nationwide survey was conducted from October 12-23. A total of 2,000 people were polled. The statistical margin of error is 2.

Source: RIA Novosti

What Kind Of Advice Would You Give the President?

KIEV, Ukraine -- What should a president do when he has 4.1% popularity and his political force, Our Ukraine, only 1.8? The Arseniy Yatseniuk and Leonid Chernovetsky blocs have only 2.3 and 0.2% respectively. These are the latest poll figures from the respected Kyiv International Institute for International Studies published in a weekly newspaper.

Yushchenko's rating and popularity are at an all-time low.
What advice would you give the president if you were a senior adviser or the head of the presidential secretariat?

Would you call upon him to resign and call early presidential elections because he had obviously lost the support of Ukrainians? Perhaps there is a need to revise the constitution so that if support for the president drops below 10% and remains there for more than one year that he should resign.

Would you advise the president to continue to press for early parliamentary elections believing that his allies will gain more seats in parliament than they currently have? Pro-Yushchenko forces will have fewer seats in a new parliament making the presidents support for early elections incomprehensible to everybody.

Why does the president believe that Vyacheslav Kyrylenko and Viktor Baloga, who head political projects (Our Ukraine and United Centre) that have 1.8 and 0.1% percent support, will save his presidency?

Would you advise the president to continue to not take the global financial crisis into account in his dealings with parliament, government and political forces? Would you advise the president that he can use his handling of the crisis through the National Security and Defence Council to improve his ratings in order to win a second term?

A senior US-based analyst and business consultant who works on Ukraine and has been a loyal Yushchenko supporter until recently told me, ‘Ukrainian voters have written him off and trying to revive one’s image at this late stage will not work as voters will ask ‘Where have you been in the last four years’’.

The consultant believed that, ‘there is nothing the president can do to be re-elected’ as at best he can only improve his ratings to 12-15%.

Would you advise the president to keep the same “manager” in place as the head of your secretariat whose strategy has reduced his support, undermined the orange coalition, produced Yushchenko fatigue in the West and destroyed his chances of being re-elected?

Would you advise the president that Viktor Baloga is undertaking a good or bad management of the secretariat over the last two years?

Would you congratulate the president on his success in pushing Ukraine closer to NATO membership?

Ukraine will not receive a Membership Action Plan (MAP) in December, because of pre-term elections, or in April 2009, as it will be unclear if a new government is in place by that time.

NATO membership will also not be raised by presidential candidates in the 2009 elections because it is unpopular among Ukrainians.

Would you have the courage to explain to the president that Ukraine’s progress towards NATO membership will therefore be dependent on that damned woman you seem to hate so much, Yulia Tymoshenko, and whether she achieves an election victory in January 2010.

If you have the courage to do so you should also inform the president that he has no possibility of being re-elected for a second term and that an election victory by Viktor Yanukovych would bury Ukraine’s NATO membership.

So, well done Mr. President! It will be your public enemy and the cause of so much of your sleepless nights - Tymoshenko - upon whom progress in Ukraine’s NATO membership will rest. Only she can win a second round election against Yanukovych.

At a recent government seminar on Ukraine that I attended Stephen Larrabee, chair in European Security at the RAND Corporation think tank, blamed, ‘Yushchenko for undermining Ukraine’s integration into the West’. Larrabee is a supporter of Ukraine’s NATO membership.

A former US Ambassador to Ukraine who did not ant to be quoted told the same seminar that, ‘Yushchenko made the Ukraine’s chance of achieving a NATO MAP in December zero on October 8’, that is the day he disbanded parliament.

A courageous and patriotic adviser needs to ask the president why he is determined to take Ukraine on a kamikaze flight over the edge and whether he has a moral right to play with the lives of 48 million Ukrainians?

What would you therefore advise him to do?

If I were a senior presidential adviser I would advise him that with only 4% support he should do the only honorable step a man can do; namely, resign.

Source: Taras Kuzio's Blog

Volodymyr Klitschko's Fight Called Off

OLDENBURG, Germany -- Volodymyr Klitschko's planned defense of the International Boxing Federation heavyweight title against Alexander Povetkin of Russia on Dec. 13 in Mannheim has fallen through because of an injury to the challenger.

Volodymyr Klitschko
Povetkin damaged ligaments in his left ankle in training and will not be able to resume until the end of November, according to Heiko Mallwitz, a spokesman for Sauerland Promotions.

Povetkin, who was undefeated in 16 fights with 12 knockouts, was the mandatory IBF challenger. Klitschko has a 51-3 record.

The Ukrainian also holds the World Boxing Organization and International Boxing Organization heavyweight titles.

His older brother, Vitali Klitschko, beat Samuel Peter this month to win the World Boxing Council heavyweight title.

Source: AP

IMF, Ukraine Reach Agreement On $16.5 Billion Loan

WASHINGTON, DC -- The International Monetary Fund reached agreement with Ukraine on a $16.5 billion loan to help support the nation's financial system as turmoil in global credit markets and recession concerns roil the eastern European country.

International Monetary Fund (IMF) Managing Director Dominique Strauss-Kahn.
The 24-month stand-by loan will be conditional on parliamentary approval of legislation to support the country's banks, the Washington-based lender said in an e-mailed statement today without elaborating.

Ukraine will also need to balance the budget and address the current-account deficit, the Kiev-based Ukrainian central bank said in a separate statement.

The loan may ensure financial stability and rebuild confidence among investors, who've shunned riskier emerging- market assets in a flight to safety.

Ukraine is the least creditworthy of Europe's transition economies measured by the cost of credit-default swaps, which protect bondholders against default.

"This program is focused on the essential upfront measures needed to maintain confidence and economic and financial stability," IMF Managing Director Dominique Strauss-Kahn said in the statement. "The strength of the program justifies the high level of access, equivalent to 800 percent of Ukraine's quota in the Fund."

Fitch Ratings on Oct. 17 cut Ukraine's credit rating to B+, four steps below investment grade, citing the currency's weakness, instability in the banking system and risks to economic growth.

International credit rating companies say the threat to Ukrainian banks has intensified because of the seizing-up of global credit markets, the high inflation rate, a widening current-account deficit and political instability.

The central bank pledged to support the banks and has injected more than 16.25 billion hryvnia ($3.13 billion) into the banking system this month, almost three times the figure it loaned in September.

It also took control of Prominvestbank in recent weeks and promised an injection of 5 billion hryvnia to help the lender "renew its financial stability" after a run by depositors.

Source: Bloomberg

Ukraine Suffers From The Economic Crisis Along With The Rest Of Eastern Europe

KIEV, Ukraine -- After years of easy credit and a property boom that had turned the Ukrainian capital, Kiev into a Asia-style boom town, Eastern Europe's biggest country abandoned the defence of its currency in the dying hours of last week's market trading.

Supporters of Ukraine's Prime Minister Yulia Tymoshenko block the parliament's tribune to try to disrupt a debate on anti-crisis measures in Kiev October 24, 2008. Ukraine's talks to secure credit from the International Monetary Fund could be imperilled unless parliament acts to pass measures to ease the effects of the global financial crisis, the chamber's chairman said on Friday.
This week it hopes to enter the equivalent of receivership, but only if it can meet the terms of a $14 billion International Monetary Fund (IMF) bail-out.

It is a big if. The markets were torrid last week but the country's parliament was a melee. Prime Minister Julia Timoshenko's supporters sought to prevent a December general election being called at any cost. With strips of tinfoil, coins and paper clips, followers of the charismatic former gas trader caused an electronic sytem breakdown of the chamber's voting system.

The immediate aim was to prevent a vote on demands for a general election by President Victor Yushchenko, Mrs Timoshenko's great rival and one time Orange Revolution ally. But the scenes called into question the country's ability to adopt reforms demanded by the IMF to provide the financial lifeline desperately need to stave-off a punishing financial meltdown.

The head of Ukraine's central bank was forced to plead with the country's politicans to stop bickering. "It's like slow death," said Volodymyr Stelmakh. "The more we delay, the more problems will multiply."

Ukraine's currency, the hryvnia, has lost a fifth of its value in the last eight days. It now leads a host of former Soviet-controlled states in Eastern Europe that, severely exposed by the new mood of fiscal rectitude on the financial markets, have turned to the IMF to stave off collapse.

The Eastern bloc states, Hungary and Belarus, have joined Ukraine in making formal applications for IMF bailouts but others, including the Baltic States, all members of the EU, have entered secret consultations for international help.

With a range of continuing disputes with the Kremlin during an intractable domestic political dispute, economic collapse has rendered Ukraine vulnerable to a resurgence of Russian influence. Last week a Russian consortium was seen as a leading contender to take over the failed Ukrainian bank, Prominvest.

Ukraine's pro-Moscow opposition has spent months warning that the government had steered disastrously away from Russia, a path that jeopardised its economy. Last week Serhyi Taruta, the country's leading steel magnate, compounded its crisis by warning of mass lay-offs in the vital industry.

"Elections are coming, and the steel industry employs 500,000 people," said leading analyst, Peter Vanhecke, head of investment banking for Renaissance Capital in Ukraine. "If no supportive measures are taken by the government, the steel industry will most likely have to reduce its headcount substantially. Output has gone down due to the global economic slowdown."

The fallout from the crisis goes beyond the realms of the economic. Ukraine's efforts to join Nato and set up a close alliance with the EU is in Moscow's cross-hairs. The Kremlin last week formally renewed its requestion for an extension of the lease on the Crimean port of Sevastopol, home its Black Sea fleet.

"There's broad consensus that the aspiration for Ukraine to join Nato in the near future is now highly unlikely," said Mr Vanhecke. "The last thing you want to do is to start haggling with your energy suppliers at a time of economic downturn. My sense is that Ukraine will move closer to a more neutral, non-provocative position towards Russia."

The stakes in the second round of Lithuania's general election today could not be higher. The expected winner, Andrius Kubilius of the right-wing Homeland Union last week warned that he would be forced to grapple with an economic collapse if he takes office. "I see a serious crisis," he said. "In Lithuania's case, we have a double crisis: one that we've built up ourselves due to economic overheating. On top of that, we are also experiencing the impact of the global financial crisis."

It amounts to a double-whammy that jeopardises many of the gains made by the ex-Soviet satellites since the collapse of the Soviet Union. Some in the Baltic states are now blaming the EU for their woes. "The main effect on Latvia has been a dramatic fall in economic growth, from 12 per cent when we joined the EU to 1 per cent now," said MEP Rihard Piks, who was the Latvian foreign minister when the country joined the EU in 2004.

The crisis has seen the region cracking into spheres of influence. Estonia, which like the other Baltic nations has been a target of Russia's increasingly hostile foreign policy, has pleaded with Swedish banks not to pull the plug on its heavily indebted economy.

With more than 10 per cent of its domestic lending denominated in Swiss francs, Hungary has been forced to hike interest rates to double digits and give guarantees to lenders to staunch a run on the florint.

Belarus, a dictatorship that is widely seen as the "last dictatorship in Europe", has already borrowed heavily froom Moscow. Now it is so fearful that a currency collapse would grant Russia complete control of its economy that its mercurial president, Alexander Lukashenko, appealed for an unprecedented gesture of support from the West, through the IMF. "He is trying to avoid total dependence on Russia," said Fyodor Lukyanov, editor of Russia in Global Affairs. "He prefers to hang on to two ropes rather than one. Belarus is a very vulnerable country."

Source: Telegraph UK

Bush Renews Support For Georgia, Ukraine NATO Entry

WASHINGTON, DC -- US President George W. Bush assured Georgia and Ukraine of US support for both former Soviet states to join the NATO alliance despite Russia's fierce opposition.

US President George W. Bush assured Georgia and Ukraine of US support for both former Soviet states to join the NATO alliance despite Russia's fierce opposition.
"Other nations seek a path to NATO membership, and they have the full support of the United States government," Bush said Friday as he signed NATO accession protocols for Albania and Croatia, bringing them one step closer to membership.

"Today I reiterate America's commitment to the NATO aspirations of Ukraine, Georgia, Bosnia-Hercegovina, and Montenegro," said the US president, who has made the alliance's eastward expansion a foreign policy priority.

Bush said the United States also looked forward to seeing all nations in the Balkans join NATO -- including Macedonia, whose admission into the alliance has stalled because of its name dispute with Greece.

"The great NATO alliance is holding a place for you at our table and we look forward to your admission as a full NATO member as soon as possible," the US president said to Macedonia's ambassador to the United States.

Bush said the Serbian people would be welcome into the alliance "should they choose that path."

Earlier, the White House said Bush still hopes that the North Atlantic Treaty Organization will launch the process of admitting Georgia and Ukraine as members when the alliance meets in December.

"We see no reason that they shouldn't get MAP status," spokeswoman Dana Perino said, referring to "membership action plan" that lays out conditions to be fulfilled for entry into NATO but does not guarantee a country full accession.

Perino said Washington had seen "growing support for Georgia and Ukraine given what happened this summer when Russia invaded Georgia" -- but France and Germany still oppose granting Tbilisi and Kiev MAP status in December.

Early next month, foreign ministers from the 26 NATO nations will meet to review whether to grant membership to the two former Soviet states.

NATO members are divided, however, because they see that while membership could stabilize Georgia and Ukraine, it may also raise tensions with Moscow, which considers the move a threat to its own security.

The United States is lobbying NATO to grant membership, but France and Germany are opposed, arguing that the early August conflict between Russia and Georgia shows how the move could exacerbate tensions in the Caucasus region.

Within Ukraine, the population itself remains divided on possible NATO membership, with public opinion split on the nation's allegiances.

NATO has already expanded to take in a number of eastern European countries that were once part of the Moscow-controlled Warsaw Pact, despite pledges in the early 1990s not to rush any approach toward Russian borders.

Source: AFP

Ukraine Says Russian Navy Must Get Ready To Leave Crimea

KIEV, Ukraine -- Russia should start preparing to withdraw its Black Sea Fleet from bases in the Crimea now, because the process could take up to six years, a Ukrainian diplomat said on Friday. (Russia's Black Sea Fleet - Image gallery)


Under bilateral agreements, Russia's Black Sea Fleet has the use of the Crimean Sevastopol base and other naval facilities until 2017. Ukrainian President Viktor Yushchenko announced in the summer that Ukraine would not extend the lease beyond that date.

"According to our estimates, the pullout and preparation of alternative facilities [for the Black Sea Fleet] may take a while. We expect this process to last five or six years," said Leonid Osavolyuk, director of the First Territorial Department at the Ukrainian Foreign Ministry.

"The Russian leadership must therefore start getting ready to withdraw its fleet as soon as possible," he told a news briefing at the ministry.

Although the agreement foresees a possible extension of the base lease, and Moscow has repeatedly said it wants negotiations on the issue, Ukraine reiterated its position on Thursday that it would not permit an extension of Russia's naval presence in the country after 2017.

Tensions between Russia and Ukraine heightened after several Black Sea Fleet warships dropped anchor off the Georgian coast during and after August's armed conflict with Tbilisi over breakaway South Ossetia.

President Yushchenko has called for the Russian Navy's early withdrawal from the Sevastopol base, as well as tougher deployment requirements and higher fees, demands that have not been backed by his former coalition ally, Prime Minister Yulia Tymoshenko.

Russia condemned Yushchenko's actions as a violation of the bilateral agreements on the presence of the Black Sea Fleet in Ukraine and said its fleet would continue carrying out its activities as usual.

Osavolyuk said on Friday that Russian combat ships frequently transport undeclared cargo and refuse to submit customs declarations while crossing Ukrainian territorial waters, in violation of a decree issued by the Ukrainian president.

Russia's naval base in the Crimea currently has 50 warships and patrol boats, along with around 80 aircraft, and employs coastal defense troops.

The next round of Russian-Ukrainian talks on the presence of the Black Sea Fleet in Ukraine has been tentatively scheduled for November.

Source: RIA Novosti

Ukraine To Raise Domestic Gas Prices By 35%

KIEV, Ukraine -- Ukraine's energy regulator announced on Saturday that gas prices for domestic consumers would go up by 35% from December 1.


The increase is part of steps to bring energy prices in the former Soviet republic up to European levels, in accordance with a presidential decree.

"Presidential decrees are not questioned, they are carried out," said Valery Kalchenko, the energy commission head.

He added that the 35% rise was approved because increasing prices to their economically realistic level would be very painful for most people in Ukraine.

Ukraine imports most of its gas from Russia and the two countries have agreed that wholesale prices will increase to European levels over the next three years.

Source: RIA Novosti

Ukrainian-Style Independence: What's Up Yushchenko's Sleeve?

MOSCOW, Ukraine -- After returning to Kiev last week from a business trip, I wrote an article about how today's Ukraine is surprisingly reminiscent of Georgia one year ago.

What is Viktor Yushchenko up to?
The rating of the president was quickly declining. He was infringing the Constitution and butting heads with the opposition. The only thing left in his power to do was to send the police onto the streets, and start spraying gas, like Saakashvili.

But the article was outdated before it even went to print. Ukraine did spray gas... but this time, the other way around. Last Saturday, Ukrainian nationalists marched through the center of Kiev to praise the Ukrainian insurgent army. The police took to the streets to control the masses, but the members of the march sprayed them with gas.

It's hard to get your head around this one without a few shots of vodka. Everything was so much simpler in Georgia. There was the president and the opposition. Everyone was screaming back and forth. Someone was calling Russia an aggressor, and the others said the Big Bear had loved the country and left...

But the political debate was far more harmonious than the cacophony streaming from Ukraine. In one ear, Kiev was screaming "Victory Day!" and in the other, "Glory to UPA!"

"Yushchenko, Ne Tak!"

And so, what do we really know about Ukraine today? We know Ukraine is Ukraine, and an independent state, which Russians seem to understand better than Ukrainians themselves. We know the country's president is Viktor Yushchenko, while the prime minister is Yuliya Timoshenko.

We also know another series of parliamentary elections are to be held on Dec. 14. It seems these elections are becoming an annual event in Ukraine, and they don't change the situation at all. Censuses in the media bear witness to this fact.

So whichever way you bend the stick, it looks like the general population thinks the next prime minister will again be Yuliya Timoshenko...

What else? We know that some Ukrainians want to join NATO. Other don't. Adverts and posters promoting the organization adorn street lanterns and building-sides in Kiev's residential district. We all thought President Yushchenko was Ukraine's biggest advocate of teaming up with NATO.

He seemed to want to anyway. But after causing the latest political crisis in Ukraine by once again dispersing parliament, he has inadvertently shut the door to NATO for Ukraine in the near future.

This seems like the most illogical step Yushchenko has taken since he came to office. It's hard to understand why he called for new elections if his rating has fallen from 67 percent in 2004 to around 5 percent in 2008.

Anyway that I looked at the situation, whether through the eyes of a cashier at Bessarabskiy Bazaar, or a taxi driver stationed off Kiev's main avenue, Khreshchatik, the state of the nation seemed as if it could easily be summed up as: "Yushchenko, Ne Tak!"

"Listen, your president isn't an idiot to call for new elections if he thinks he will lose," I told various people in Kiev — deputies, political scientists, and journalists.

In answer, they said in chorus: "What do you mean he's not an idiot?"

There are two options. The genuine state of affairs is being kept secret from Ukraine's president, and he doesn't actually know how people feel about him, or Yushchenko knows something that we all don't, and he's acting according to a plan developed by the U.S., where he has flown to twice over the last week.

Presidential Intrigue

In order to understand Yushchenko's actions, I turned to 6 experts from the country: one dissident, two politicians, and three political scientists. This is what I learned:

Andrey Ermolaev, Director of the Social Research Center, Sofiya:

"The president wound up in a very critical situation. His political course took several hits that were observed by both politicians and voters alike. What he's trying to do at the moment is make a quick and radical change of plans that will allow him to keep his post as president — or else he'll be left bankrupt, putting away pennies in the pension fund."

Oleg Tyagnibok, Head Ukrainian Nationalist and Leader of the Svoboda Party:

"He doesn't have any other choice. Otherwise, an impeachment process would begin in parliament. Maybe they would let him sit out his term, but he would be deprived of all his presidential authorities, and Yushchenko would be made an English queen. He'd only be able to attend banquets and hand out medals."

Mikhail Pogrebinskiy, Director of the Kiev Political and Conflict Research Center:

"Timoshenko is a bone stuck in his throat. He needs to get rid of her because her presidential rating is 25 percent and his is only 5 percent. For Yushchenko, the most important thing is to stay around a second term — not an invitation to join NATO. He explains this as follows: 'I'm the only one who can save Ukraine.' He thinks God elected him.

Vladimir Malinkovich, Dissident:

"He's not a dictator. He's worse. He's a beekeeper playing the messiah."

Aleksandr Golub, Chief Editor of Kommunist Newspaper:

"His actions can be explained by his personal idiosyncrasies. This man reacts radically to any negative information about himself. If people want to stay on his team, they have to kiss up to him. I'm sure he doesn't know what his real ratings are at the moment."

Vladimir Kornilov, Director of the Ukrainian Branch of the CIS Institute:

"Yushchenko is obviously planning something so he'll come out the savior of the nation. It's as if he needs to do something extraordinary to boost his ratings. For example, this could be provocation against the Black Sea Fleet. The local police in Sevastopol won't execute these kinds of commands, but he could always send in the police from Lvov."

Source: Komsommolskaya Pravda

IMF Talks In Danger Unless Ukraine Parliament Acts: Speaker

KIEV, Ukraine -- Ukraine's talks to secure credit from the International Monetary Fund could collapse unless parliament acts to pass measures to ease the effects of the global financial crisis, the chamber's chairman said on Friday.

Ukrainian Parliament Speaker Arseniy Yatsenyuk is one of the bright stars on the Ukrainian political scene.
A package proposed by the government calls for amendments to the 2008 budget, borrowing of $2 billion from unnamed international financial institutions, sovereign guarantees to firms seeking foreign credit and creating a stabilisation fund.

"It is very important for us to achieve results in a vote on the financial crisis," Arseniy Yatsenyuk told the chamber, which was deadlocked for the fourth day.

"Failure to get a result will have as a consequence the collapse of talks with international financial organisations."

An International Monetary Fund mission has been holding talks for more than a week in Kiev on extending credit that Ukrainian officials say could amount to up to $14 billion.

The Fund has offered no comment on the talks, but says the mission will remain in Kiev "as long as is required".

Yatsenyuk said no consensus could be reached on six draft laws to tackle the crisis, including the package proposed by Prime Minister Yulia Tymoshenko's government.

A working group was set up to draft a document able to command a majority. Debate would resume next Tuesday.

Tymoshenko, speaking later outside the chamber, said: "Getting assistance from international financial organisations in the next few days depends directly on passing this package of anti-crisis laws."

Credits, she said, "will not put Ukraine in difficulty. On the contrary, they allow us to invigorate the banking system."

GOVERNMENT PACKAGE

The crisis has put pressure on the hryvnia currency, which has lost 20 percent of its value in a week and was trading at record lows to the U.S. dollar. It has also placed in doubt the stability of banks to refinance debt.

The deputy head of the central bank, Anatoly Shapovalov, said the hryvnia had lost ground due to "panic" and saw no need for a devaluation. The bank, he said, could force exporters to sell dollars on the interbank market but only as a last resort.

Pressure grew to break deadlock over the package after a new downgrade of Ukraine's sovereign rating by agency Standard and Poor's.

The agency warned that new downgrades could be forthcoming "if there are significant delays in reaching agreement with the IMF or if the lack of an internal political consensus undermines the government's ability to implement an IMF programme".

Parliament has been thrown into disarray over proposals to combine debate on the crisis with measures to finance an early election called by President Viktor Yushchenko.

Tymoshenko, at odds for months with the president, opposes the election and members of her bloc have milled about the chairman's rostrum to curtail debate.

The president dissolved parliament this month and called a Dec. 7 election to the assembly after the collapse of a government team linked to the 2004 "Orange Revolution".

He lifted the dissolution order this week and said he was putting the election back for a week to Dec. 14. It remains unclear when the poll will take place.

A group of prominent Ukrainians, including scientists, politicians, soccer star Andriy Shevchenko and tennis player Andrei Medvedev, urged the president to call off the election.

The group urged politicians to "forget party allegiances and take on the consequences of the crisis rather than each other".

Source: Interactive Investor

Ukraine Regional Officials Trade Accusations On Stalled Stadium

KIEV, Ukraine -- The top two officials in a Ukrainian province listed to hold games at the Euro 2012 football championships on Friday blamed each other for a stalled stadium construction project.

Cities in Poland and Ukraine which may host Euro 2012.
Mykola Kmit, head of Ukraine's western Lviv province, said city officials had "failed utterly" even to begin the process of building a new football stadium needed for the competition.

Ukraine and Poland are co-hosts for Euro 2012. Ukraine is responsible for four game venues for the tournament, including a stadium to be built from the ground up in Lviv.

The Lviv city government has yet to appoint a general contractor for the stadium, and has not even decided where the structure would be built, Kmit charged, according to an Interfax news agency report.

UEFA president Michel Platini said during a recent visit to Ukraine that any planned host city stood to be sacked as a game venue, if its preparations for Euro failed to meet UEFA standards.

Andry Sadovy, Lviv city mayor, said in a statement to media that the accusations were "without grounds," and claimed his government was well along in negotiations so work on the new stadium could begin.

"In this week alone we have held talks with three serious companies able to build the stadium quickly," Sadovy said. "We expect an agreement soon."

A contract between the Lviv city government and the Austrian construction firm Alpine fell apart in early October after a dispute over construction costs.

The agreed-upon cost of the venue - 125 million dollars - was insufficient given rising energy and labour prices, and the global financial meltdown, according to an Alpine statement.

German Hochtief and Ukrainian Azointeks were among the possible replacement general contractors for the project, Sadovy said. He gave no precise deadline for when a stadium blueprint might be approved, or when a general contractor would be actually hired.

Two Ukrainian cities, Kkarkiv and Odessa, are waiting in the wings as a possible replacement venue should Lviv ultimately fail to build a modern stadium in time for Euro 2012.

A sacking of Lviv as a Euro 2012 game site would carry political repercussions in Kiev, as all the other Ukrainian host cities, including the two replacements, are located in the wealthier Russian-speaking half of the former Soviet republic.

Lviv is the centre of the poorer Ukrainian-speaking half of Ukraine.

Platini said in a statement that UEFA would readily shift the lion's share of the games either to Poland or Ukraine, if the other country proved unable to prepare for the football championship properly.

Poland and Ukraine currently are slated to hold games in eight cities, four in either country.

Source: DPA

EU Denounces 1930s Ukrainian Famine As Crime

KIEV, Ukraine -- The European Parliament on Thursday denounced the famine that killed millions of Ukrainians in the early 1930s as an appalling crime against humanity instigated by the regime of Soviet leader Josef Stalin.

Holodomor memorial in Sofiya Square, Kiev.
The EU assembly voted by a large majority to condemn the famine and demanded that former Soviet nations open up their archives so that the causes can be fully investigated.

However, the resolution avoided directly referring to the famine as a genocide, an issue which has divided Ukraine and Russia.

Russia contests Ukrainian assertions that the famine was a genocide, because other ethnic groups, such as Russians and Kazakhs, also suffered. As the Soviet Union's legal successor, Russia is also concerned about the possibility of legal action or having to pay reparations.

The death toll in the 1932-33 famine is contested. Some historians believe 3.5 million perished in what is known in Ukraine as "Holodomor," or "death by hunger," while the country's leaders say up to 10 million died.

In their resolution, the EU lawmakers called the famine, "an appalling crime against the Ukrainian people, and against humanity" that was "cynically and cruelly planned by Stalin's regime in order to force through the Soviet Union's policy of collectivization of agriculture."

The text makes reference to the U.N. convention on the prevention and punishment of genocide, but some conservative lawmakers complained that a more explicit reference to the famine as genocide was not included to ensure left-leading members voted in favor.

"Other political groups don't think the strict definition of that term should be applied to the Holodomor perhaps because of a fear of offending modern-day Russia," said British Conservative Charles Tannock. "But none of us wisр to belittle the unimaginable suffering inflicted upon Ukraine."

Soviet authorities masterminded the famine to force peasants across the Soviet Union to give up their private plots and join collective farms. The measure was particularly calamitous in Ukraine, the breadbasket of the Soviet state.

Historians in Ukraine and the West are divided on whether the famine was an act of genocide. Some say Ukrainians were targeted as an ethnic group. Others argue Soviet authorities set out to eradicate private landowners as a social class.

Ukrainian law enforcement agencies are gathering evidence for a court case in Ukraine to try to prove the famine was genocide.

Source: AP

Ukraine Liberalizes Currency Market

KIEV, Ukraine -- Ukraine's central bank will let the official exchange rate for its currency move closer to the market's exchange rate, fulfilling a key condition to receive an International Monetary Fund loan, officials said Friday.

Ukraine's Hryvnia
Serhiy Kruglyk, head of the foreign relations department at the central bank, told The Associated Press that the bank will next month begin to set the daily exchange rate based on the average rate at the foreign currency exchange recorded during the previous day of trading.

Currently, the central bank exchange rates differ significantly from market rates. The official rate is set based on the market rate and other economic factors. The central bank does not publicize the exact formula.

The central bank rate was 5.15 hryvnia to the dollar Friday, while the hryvnia traded much lower on currency markets, at over 6.0 hryvnia to the dollar, reaching a new all-time low since its 1996 introduction.

Experts hailed the move, saying the central bank was taking a further step toward liberalizing the currency market, after it earlier abandoned the practice of keeping the national currency within a tight corridor to the dollar. However, the planned measure still did not amount to a full free float of the hryvnia, as the central bank would continue to intervene on the market.

"This is movement in the right direction, the direction of market reforms," said Oleksandr Klymchuk, an analyst with Concorde Capital Investment bank.

The hryvnia has lost over 20 percent in the financial crisis that has hit Ukraine hard. The currency fell to its historic low Thursday, trading at 6.01 per US$1 on the foreign currency exchange. The fall was due to a shortage of foreign currency because of a 40 percent fall in exports and a run on banks that stripped the banking sector of US$3.4 billion this month.

The IMF loan of up to US$14 billion is expected to help stabilize the financial sector, but the deepening political crisis threatened to block the deal.

Allies of Prime Minister Yulia Tymoshenko broke parliament's electronic voting system Friday as they protested against President Viktor Yushchenko's order to hold early elections.

Parliament spokesman Andriy Zhigulin said that members of Tymoshenko's faction clogged lawmakers' voting machines with coins, paper clips and pieces of tinfoil.

The heroes of the 2004 Orange Revolution, Yushchenko and Tymoshenko have turned into fierce rivals ahead of the 2010 presidential election. Yushchenko ordered a new parliamentary vote in December, but Tymoshenko is fighting to avoid the vote and retain her job.

Source: International Herald Tribune

Ukraine Has No Chance To Join NATO Membership Plan In 2008

KIEV, Ukraine -- The declaration of early parliamentary elections in Ukraine has closed the subject of the country joining the NATO membership action plan in December 2008, a group of Ukrainian analysts told a news conference on Thursday.

Oleg Rybachuk
The conclusion follows the third phase of the project Public Support for the Membership Action Plan for Ukraine, held in Berlin.

The chairman of the observer council at The Public foundation, former chief of the presidential secretariat Oleg Rybachuk, told a news conference that “the internal political situation in Ukraine gives our European partners the full moral right to say that as a matter of fact there is nobody to be incorporated in the MAP.”

According to Rybachuk, German politicians were sincerely telling him that in Ukraine they have no partners with whom to establish long-term, lasting relations, including those concerning integration with NATO.

NATO’s foreign ministers will consider the question of inviting Ukraine into the MAP again when they meet in session in December.

Source: ITAR-TASS

Golf Coming To Kiev, Ukraine

KIEV, Ukraine -- The course architects at Golfplan-Fream, Dale & Ramsey will break ground in 2009 on the first golf course project, on Doboletsky Island, in Kiev Ukraine.

Kevin Ramsey on Doboletsky Island.
The 18-hole resort track is planned for the shores of Doboletsky Island, one of a series of islands in the Dnieper River some 150 feet below - but in plain sight of - the golden onion domes rising above Kiev's Old Town.

"It's quite a coup to find a viable golf course site this close to downtown in any city of 4.5 million people - that the city is Kiev makes it that much more remarkable," said Kevin Ramsey, the Golfplan partner directing the project.

"Few courses will have this degree of urban access; there is a mass transit station located right across from the foot bridge to Doboletsky Island.

"When you do cross over to the island, you find the sort of sandy terrain that recalls Pinehurst, in the American Piedmont region. The proximity of the property to center city Kiev and physical attributes of the property itself make the resort potential here quite extraordinary."

Dnipro Plaza is the local holding company developing the Doboletsky Island project, with Russian backing. Course construction begins in the spring of 2009, but that is but one portion of this ambitious development, which also includes a five-star hotel and spa, 30-40 villas, public recreational space, and sizeable retail components.

At Golfplan's behest, San Francisco-based land planners Horberger+Worstell have been retained, giving the project an integrative design capability equal to the task at hand.

"The land is zoned recreational; in fact, the southern half of the island - where the bridge provides access - is already home to beach volleyball courts and an outdoor weightlifting, sort of what you'd find on Venice Beach [near Los Angeles]," Ramsey explained.

"Accordingly, whatever was to be developed on Doboletsky had to include and enhance that recreational aspect while still serving as a gateway to the larger resort components. It's a complicated land planning exercise with mixed use and access. All of the existing amenities will be upgraded and expanded. Half of the golf course will be located on the southern portion. The northern half of the island will be more exclusive and home to the hotel, spa, villas and marina.

"It's ambitious, especially as a country's debut golf project. There's never been anything quite like it."

Ramsey should know. It's nothing he and his colleagues haven't seen before. Santa Rosa, Calif.-based Golfplan-Fream, Dale and Ramsey are golf's most cosmopolitan course designers, with projects now in some stage of development in 11 different countries.

Since its founding in 1973, the firm has built courses in some of golf's most exotic and remote locations: Pezula, on South African cliffs overlooking the Indian Ocean; Korea's feted Club at Nine Bridges, on Jeju Island, now on the world top-100 lists at both Golf Digest and Golf Magazine; Bali Handara and Jagorawi, in the tropical jungles of Indonesia; Shore Gate, in the sand hills just a few miles from the boardwalks of Atlantic City, N.J., in the United States; the 27 holes at Disneyland Paris; the mountainous resort course at Bonari Kogen GC in Japan; and the Serapong Course on the Island of Sentosa, host site of the Barclay's Singapore Open and recently named the top tournament course in Asia by Asian Golf Monthly magazine.

Golfplan has designed more than 150 original golf projects in 65 different countries. Indeed, the firm has introduced golf to a dozen different nations, including Tunisia, Nepal, Brunei and Poland, which share as border and a post-Soviet economy with the Ukraine.

"There are similarities between Doboletsky Island and the development of Krakow Valley [Golf & Country Club]," said Ramsey, referring to a Golfplan-designed course that opened in 2001 near Poland's second city. "These are both emerging markets and Eastern European cultures new to the game of golf. But the comparison and the moment in time, frankly, favor Kiev: Krakow Valley is quite a distance from downtown and was built to serve that metro area. The Doboletsky property is right in the city and Kiev commands a great deal of tourist travel.

"There is also a lot more money being spent in this region today, mainly Russian money due to oil and gas prices. There are four or five different projects being developed in Moscow and golf is a much more prominent social status symbol now. Our project could never have been envisioned during the 1990s. I must have seen a dozen luxury cruisers and speedboats on the Dnieper during my last site visit this summer."

The golf course Ramsey has designed takes full advantage of the Dnieper, with 11 of the 18 holes at water's edge. The architect opted for a low-profile design that maximizes the riverside setting while skirting the site's ancient, red-barked pines. "The pines are sort of sacred on the island, so we'll definitely be working around them," he said. "Besides, it wouldn't have that Pinehurst feel without the pines."

Source: International Golf News

Moscow Seeks More Excuses For Prolonging Naval Presence In Sevastopol

WASHINGTON, DC -- For the first time since the Soviet era, Russia’s Black Sea Fleet undertook an offensive operation in August of this year when it attacked Georgia, landing Russian ground forces in Abkhazia.

Sevastopol, Ukraine
The Russian Fleet, mainly based in Sevastopol, misused Ukraine’s territory and abused Ukraine’s neutrality in launching that operation. It did so with impunity, underscoring the deficit of usable power, political leadership, and international rule of law in the Black Sea region.

The Russian Fleet now plans to use the prized Ochamchire base on the Abkhaz coast, which is legally sovereign Georgian territory. The Turkish-Russian naval condominium, which exists de facto in the Black Sea, did not inhibit the Russian fleet from attacking Georgia.

In late September and the first half of October, ships of Russia’s Black Sea Fleet joined flag-showing exercises by the Russian Navy in the Mediterranean Sea and visits to Soviet-era base locations there.

While the fleet’s overall combat value is very low at present, Russia’s leaders think 10 years ahead in terms of ship-building plans, premised on oil and gas revenues, for uncontested naval supremacy over neighboring countries and a possible renewed presence in the Mediterranean.

The Black Sea Fleet, moreover, seems potentially usable in the Crimea much as the Russian ground troops proved usable in Abkhazia and Transnistria, where their presence helped carve out a zone of Russian control.

The Crimea has not become a “hot spot” (conflict zone), as Ukrainian officials such as State Security Service acting chairman Valentyn Nalyvaichenko correctly point out. But Moscow holds enough cards to hint at a potential conflict, for political leverage over Kyiv’s decisions on the Russian fleet and Kyiv-NATO relations.

In their cumulative effect, these recent developments have clearly enhanced the Black Sea Fleet’s value in the eyes of Russia’s leadership, lending an added impetus to plans for retention of the Sevastopol base in the future.

On October 22 Russian Minister of Foreign Affairs Sergei Lavrov announced that Russia would request Ukraine to prolong the stationing of Russia’s Black Sea Fleet in Sevastopol beyond 2017, when the basing agreement is due to expire.

Lavrov said that Russia would not make its proposal to Ukraine any time soon but “at some later stage, closer to 2017”.

Such timing, however, would leave almost no room for Russian compliance with the deadline, in the event that Ukraine turns down Moscow’s proposal. The Fleet’s physical relocation from Sevastopol to Russian territory would be a multi-year process and could be dragged out longer than necessary by Russia.

Starting the discussions with Ukraine “closer to 2017” would, therefore, ensure the prolongation of the Russian fleet’s presence in Ukraine beyond the deadline, de facto if not de jure.

The basing agreement, signed in 1997 and valid for a 20-year period, can be prolonged automatically unless either side terminates it with one-year advance notice. This procedure puts the onus on the Ukrainian authorities. Moscow probably hopes that a divided Ukrainian government and body politic may not be able to reach, sustain, and enforce a decision to terminate the basing agreement.

Moscow is already laying out the strategy for retaining its naval presence on Ukraine’s territory in the future. The strategy includes potentially coercive aspects as well as inducements.

On the coercive side, Russian officials including some at the top, are openly questioning Ukraine’s territorial integrity (also inspiring the Duma to do this), with particular reference to the Crimea and Sevastopol.

The possibility of Moscow using local groups to “raise the Russian flag” over Sevastopol and the Crimea, if Kyiv no longer accepts hosting the Russian fleet, lurks distinctly in the background to the continuing debates on the basing agreement.

On the inducement side, the Russian government proposes to: a) increase the rent it pays to Ukraine for leasing the Sevastopol base (a paltry $98 million per year under the 1997 agreements); b) invest Russian funds for the development of the civilian infrastructure in Sevastopol and the Crimea, in the local population’s interest (evidently an accompaniment to naval base upgrading, if Ukraine prolongs the basing agreement); c) place Russian state orders with Ukrainian military-industrial plants in the Crimea and elsewhere in Ukraine (including the now-idle Ukrainian shipyards along the seacoast, as well as certain favored plants on the Ukrainian mainland). Russian Defense Minister Anatoly Serdyukov has held out this package of incentives twice recently.

Serdyukov also supervises (alongside Deputy Prime Minister Sergei Ivanov) the naval base construction program. That program’s Black Sea dimension focuses on the expansion and modernization of the Novorossiysk base until 2020. It now seems likely to include re-commissioning and modernizing the ex-Soviet submarine base at Ochamchire.

The Black Sea Fleet also expects to be reinforced with new ships, some new and others transferred from other Russian fleets. If those reinforcements do materialize at Novorossiysk and Ochamchire, the Kremlin will undoubtedly argue that it has nowhere to move the Feet from Sevastopol ahead of 2017 and will use that additional excuse for prolonging its naval presence on Ukrainian territory.

Source: Eurasia Daily Monitor

Ukraine's Prominvest Hopes To Find Buyer Soon

KIEV, Ukraine -- Ukraine's Prominvestbank, which some Ukrainian officials have said could be nationalised, said on Thursday it hoped to find a buyer in the next few days.


Prominvestbank, Ukraine's sixth-largest bank, was placed in receivership earlier this month after a run on deposits.

Prime Minister Yulia Tymoshenko, whose government has drawn up a package of measures to limit the effects of the crisis, last week supported the idea of nationalising Prominvestbank. The presidential office also backed the idea.

But Prominvestbank's press secretary, referring to comments by the bank's receiver, deputy central bank chief Volodymyr Krotyuk, said efforts were being pursued to find a buyer.

'As of today, there is no specific buyer. But this issue could be settled in the days to come,' press secretary Svitlana Kushnir told Reuters.

The Kiev daily Kommersant Ukraina, quoting an unnamed source, said the co-owner of Ukrainian bank Delta, Mykola Lagun, planned to sign an agreement on buying the bank on Thursday on behalf of a consortium of investors.

Delta bank offered no comment on the report, which said other members of the consortium included Russia's Sberbank and Alfa-Group and the investment group Intelinks.

Investment company Dragon Capital last week said four or five groups had expressed interest in Prominvestbank.

Source: Forbes

Ukraine In For Tough Times Amid Global Crisis

KIEV, Ukraine -- Construction cranes have stopped swinging and thousands of steel workers face layoffs as Ukraine braces for a severe economic downturn.

The national currency, the hryvna, is plummeting, amid a run on banks and soaring demand for foreign exchange.
Lacking the large foreign currency reserves of China and Russia, more integrated into the world economy than some smaller countries, Ukraine is being hit harder than other former Soviet states by
the global financial crisis.

"Ukraine has been exposed as the most vulnerable," said Jan Randolph, an emerging markets analyst at Global Insight.

On Thursday, the Ukrainian currency plunged against the dollar to a historic low amid a run on banks and a frantic rush to convert savings into U.S. currency.

Ukraine's hryvna plummeted to 6.01 hryvna per U.S dollar in trading at Ukraine's currency exchange.

Jittery customers lined up to buy dollars at exchange offices across the capital, some of which ran out of cash. The country was already short on foreign currency, as demand for steel, its main export commodity plunged. The Ukrainian currency has lost over 20 percent since September.

Four years of robust economic growth left Kiev clogged with shiny imported automobiles and dotted with upscale fashion outlets. Real estate prices exceeded those of Rome for a time, and the stock market gained an astonishing 130 percent in 2007.

But today, experts agree, Ukraine is in for tough times.

Falling demand for steel has widening the external trade deficit to a hefty US$12.5 billion so far this year, compared to US$ 5.9 billion last year.

After excessive reliance on foreign credit to feed its vast consumer boom, which sent Ukrainians rushing to buy mobile phones, cars and apartments on credit, the economy was hit hard when panicked foreign investors abandoned emerging markets and European banks slashed lending, crippled by their own liquidity crunch. Inflation soared to 31 percent in May, year over year, and cooled to 16 percent in September.

The government spent US$2.9 billion buying hryvnas to support the currency this month alone, bringing its reserves down to US$34.2 billion, according to the central bank. One global rating agency after another has downgraded Ukraine's creditworthiness.

Today Ukraine is pinning its hopes on a loan of up to $14 billion from the International Monetary Fund. But unlike Hungary which has also turned to the IMF for money, Ukraine does not benefit from EU aid.

Plans to receive the much needed loan were threatened by a marathon political struggle between President Viktor Yushchenko and Prime Minister Yulia Tymoshenko, as the IMF negotiating team could not be certain if the next government would stick to the commitments of the current one.

A standoff over early elections, which Tymoshenko wants to avoid to retain her job, has further soured the investment climate as Ukrainian stocks lost over 70 percent of their value this year.

"This will hurt," said Olena Bilan, a microeconomic analyst with Dragon Capital investment bank. «It will be painful in any case.

The question (is) how painful it will be.

The effects of the financial crisis have been quick to trickle down into the real economy. Banks have hiked interest rates and slashed lending, for example, bringing the car boom to an abrupt end.

Output in the construction industry, which is highly depended on loans, was down 7.2 compared to last year's figures, according to Dragon Capital. The real estate market has seized up and many realtors have been forced to look for new jobs. Investment banks in Kiev have also slashed jobs.

Anna Kiptenko, whose firm services cash registers for retail traders, was promised a 500,000 hryvna ($100,000) loan for her business, but the bank froze the money. Now she can't afford to pay for her son's law studies in Kiev.

"The government is assuring us that there is no crisis, but I can see that it is already here," said Kiptenko, 42, as she emerged from an office of Pravex bank in downtown Kiev.

Experts say the expected IMF loan will save the country from all-out collapse. "They want to cool the economy in general to avoid a crash landing," said Randolph.

But a deep economic slowdown appears inevitable.

Ukraine exports steel and cast iron to the Middle East, Europe and former Soviet Union countries, where they are used in housing construction, machine and ship building. But production by the country's metal industry, which represents 6 percent of the GDP and accounts for 40 percent of the country's exports, was down by 30 percent.

Steel magnate Serhyi Taruta, chairman of the Industrial Union of Donbas, told the newspaper Kommerstant Ukraine that his company plans to lay off as many as 20,000 people.

Dragan Capital's Bilan predicted the economy, which grew at an average 7.4 percent over the past four years, will slow to 4.8 percent this year.

Tymoshenko urged Ukrainians to "tighten their belts" and proposed to raise taxes for the rich.

Yushchenko, meanwhile, called for the laying off of every fifth state bureaucrat, promising to start with some in his own office.

Ukraine faces further stress from a likely hike in the cost of its natural gas, almost all supplied by Russia. That could mean a drastic increase in utilities bills.

"There will be a lot of angry people," said independent financial analyst Geoffrey Smith.

Source: AP

Crisis: How Much Must One Nation Suffer?

KIEV, Ukraine -- As the aftershocks of the global financial crisis start reverberating throughout the nation, Ukraine’s leaders were, for a second week, holding talks with the International Monetary Fund on a multi-billion-dollar emergency loan.

An elderly woman checks a coin in front of a Kiev bakery.
The leadership also struggled to adopt measures to protect the country’s economy amid political chaos and sharply sliding exports of key commodities, such as steel.

The concerns for all Ukrainians, especially the poorest, could mount soon. The government will be forced to take belt-tightening measures in exchange for IMF help, increasing hardships for the poorest citizens. Meanwhile, an inflation rate that could hit an annual rate of 25 percent continues to erode everyone’s purchasing power.

Speaking on television early Oct. 22, Prime Minister Yulia Tymoshenko warned that the government might reduce the state bureaucracy by 20 percent and freeze social social benefits, such as pensions, which are now indexed for inflation. “Ukraine has to tame its social appetites … we have to cut spending that Ukraine cannot afford,” Tymoshenko said.

She insisted that nobody would experience cuts, but pensioners – many of whom make only $100 per month – will feel the most pain.

As the week wore on, a faint silver lining emerged: President Victor Yushchenko and Tymoshenko appeared to finally start coming to an agreement about what needs to be done to save the economy.

Tymoshenko earlier this month downplayed the world financial crisis’ affect on Ukraine. But in recent days, she has talked about emergency measures needed to minimize the expected big blow. The country’s export-oriented economy is sure to suffer.

Tymoshenko assured citizens that the IMF was ready to provide an emergency loan to stabilize the country’s sliding currency and shaky banks, but offered no clarity as to how much funding would be provided and under what conditions.

Reports suggest the IMF may provide a credit line of up to $15 billion.

Yushchenko on Oct. 22 revealed that the nation’s central bank had this month burned through nearly $3 billion in reserves, leaving it with $34.6 billion. And some experts, such as economist Anders Aslund, suggested Ukraine needed “some $20 billion.”

One day earlier, the president called for the creation of a rainy-day fund that could be used to bail out banks in times of need. He also said that measures should be taken to increase state insurance guarantees on bank deposits.

Yushchenko halted his decree calling for early Dec. 7 parliamentary elections so that the Verkhovna Rada could adopt emergency laws. According to the president, the aim is to “prevent a recession from turning into a depression.”

Yet the country’s lawmakers spent the first several days of the week feuding. It remained uncertain whether they would be able to come to a consensus on anti-crisis legislation and the divisive issue of when, or if, snap parliamentary elections would be held.

Tymoshenko said that her government submitted economy-related draft laws to parliament and expressed hope that lawmakers would adopt them in the coming days. “The first is about protecting [Ukraine] from the world financial crisis; the second is on changes to the 2008 state budget,” she said.

Changes in the budget are needed to finance early elections that Tymoshenko opposes as reckless in times of economic crisis. Experts said she also fears losing her job.

But Yushchenko has not backed down on his call for a snap election. In a televised address on Oct. 20, the president said the elections would be held Dec. 14. He later admitted that they could be delayed further. But lawmakers loyal to the president and one of his other rivals, Victor Yanukovych, could muster enough votes to fund an early poll.

“There are enough votes for that in the session hall anyway,” said Ivan Kyrylenko, faction leader for Tymoshenko’s bloc in parliament.

So, as the country’s currency was under pressure and sliding, politicians focused on blaming each other for the economic crisis in an attempt to curry favor with voters.

Experts said the hryvnia, which hit an all-time low of 5.9 against the dollar on Oct. 8, will inevitably depreciate further, as the value of foreign currency swelled due to a widening current account deficit.

Experts said an IMF loan will free up reserves, allowing the central bank to walk the fine line between keeping the currency stable and bringing inflation under control.

A recent IMF report predicted that Ukraine will continue having the highest inflation rate in Europe this year and next, 25 and 19 percent, respectively.

And inflation is what Ukrainians fear most. A majority of Ukrainians expect to see prices rise significantly as a result of the world financial crisis or think that the crisis will not affect them at all, according to a telephone poll commissioned by Korrespondent.net, a sister internet publication of the Kyiv Post.

According to the poll, nearly 50 percent expect a jump in inflation, 21 percent expect nothing, while 8 percent predict the complete collapse of Ukraine’s economy. Only 4 percent fear for their jobs, but the poll’s error margin is 5 percent because it only included 426 respondents.

The poll found that older respondents are more concerned with inflation than their younger counterparts.

Economist Ihor Burakovsky said the rate of inflation will depend on the extent of the domestic and world crises. But, he added, the cost for heavily-subsidized utilities will have to grow anyway, hitting the pocketbooks of the country’s pensioners.

“Depending on the trajectory of the recession, the government will have to keep a close eye on the pension fund. Measures like indexing pensions to inflation make sense, but if the situation is very dire, then other measures will take priority,” he said.

Economist Victor Lysytskyi, who has served at Ukraine’s central bank and in government, said the country can, if needed, offer support to the country’s most vulnerable households. “Ukraine currently has the opportunity to prevent the impoverishment of the most needy,” he said, without offering specifics.

Ultimately, however, snap parliamentary elections will complicate the efforts of politicians to adopt constructive measures, he warned. “We can avoid a crisis if we say ‘no’ to elections and ensure the parliament and government function normally,” Lysytskyi said.

Source: Kyiv Post

Mila Kunis Plays An Assassin In New Movie 'Max Payne'

LOS ANGELES, CA -- Shortly after appearing on-screen in the new movie "Max Payne," in theaters, Mila Kunis lapses into flawless Russian. But the 25-year-old beauty didn't spend hours slaving away with a dialogue coach to master the native tongue of her character, Slavic assassin Mona Sax.

In this image released by 20th Century Fox, Mark Wahlberg (L) stars as Max Payne, and Mila Kunis stars as Mona Sax in a scene from, 'Max Payne.'
Kunis can actually speak the language -- she spent the first seven years of her life in the Ukrainian city of Kiev before moving to Los Angeles in 1991.

"It was right at the fall [of the Soviet Union.] It was very communist, and my parents wanted my brother and me to have a future, and so they just dropped everything. They came with $250."

Kunis' father did odd jobs -- painting houses, installing toilets and delivering pizza -- while her mother worked in the back room of a Thrifty drugstore.

"Ultimately, I adjusted fairly quickly and fairly well," she says. "But it must have been hard, because I blocked out second grade completely. I have no recollection of it. I always talk to my mom and my grandma about it. It was because I cried every day. I didn't understand the culture. I didn't understand the people. I didn't understand the language. My first sentence of my essay to get into college was like, 'Imagine being blind and deaf at age seven.' And that's kind of what it felt like moving to the States. But I got over it pretty fast."

During a recent interview at the commissary on the Fox lot, Kunis proves that she's achieved more than mere assimilation.

The diminutive starlet can't even make her way to a table without being stopped by several colleagues and acquaintances.

Fixing them with her striking gray-green eyes, she converses with each for several minutes, proving that she's a pro at the art of the schmooze, even though she claims, "I have a sailor's mouth. I don't know what it's like to not speak my mind."

If Kunis is good at shaking hands, it's probably because she's been doing it professionally since shortly after her arrival in the States.

When she was only 9, she was spotted by her future manager in an acting class and landed a job in a Barbie doll commercial.

By the time she was 14 (she attended Fairfax High School in L.A.), she was starring in "That '70s Show" -- which aired from 1998 to 2006 -- alongside Ashton Kutcher and Topher Grace.

She also began voicing the character of Meg Griffin on "Family Guy."

But while her costars and contemporaries landed themselves in the tabloids, she quietly began a relationship with actor Macaulay Culkin (of "Home Alone" fame) seven years ago and briefly enrolled in Loyola Marymount University before deciding that college wasn't for her.

"I was left alone" by the press, she says. "I was never famous enough for people to care. I was never a bad kid. I will say I never did drugs. Like, I was a really good kid."

Sharp contrast to 'Sarah'

Kunis insists that to "not have the industry be the No. 1 important thing in life" is her key to staying grounded, but it has become a major demand on her time.

Earlier this year, Kunis made her big-screen breakout as the love interest in the comedy hit "Forgetting Sarah Marshall," which takes place in the Turtle Bay Resort on Oahu's North Shore.

"I'm not in the movie that much," she says. "So I would just be in a bikini laying out drinking piña coladas all day and eating burgers.

And in Hawaii, when there's 5 a.m. wake-up call, you're like, 'Great!' Because you wake up, the sun is rising, and it's breezy and beautiful. There are turtles everywhere, and you see whales. I cried when we left."

"Max Payne" provided a sharp contrast to this idyllic island shoot. "It was in Toronto during four blizzards, back to back," she says. "So it was cold and dark, and guns were involved."

Based on the third-person shooter video game, "Max Payne" centers on a cop (Mark Wahlberg) who goes on a revenge killing spree after his family's murder. Mona Sax joins forces with Payne after learning that the same killer might be behind her sister's death.

Kunis admits that the movie appealed to her inner nerd. "I played 'Max Payne' at 'That '70s Show' because we had a bunch of video games and game consoles. I [was bad] at it. I like 'World of Warcraft.' I played it for, like, three years. All my boyfriend [Culkin] and I did all day at home was go on these raids. I'd be on my computer, he'd be on his, and for four hours, not a word was said to one another. But 'Max Payne' is a little darker than a bunch of wizards, gnomes and elves running around."

High heels in the snow

Despite the film's darker themes, Kunis insists that the harsh weather affected the mood on the set more than anything else. "I didn't even know what people looked like, because we didn't move indoors for a month.

We only shot outside, so all you'd see were people's eyes, because everyone was wearing these parkas. And we went inside, and I was like, 'I don't know who our assistant director is.' "

Unlike the crew, Kunis couldn't dress for the weather. "Tight black shorts and a leather bustier and a black coat-type thing. It's almost impossible to look slightly coordinated in 5-inch heels in snow.

But apparently, that's what assassins like to wear nowadays. "I'm not even that short. I look a little shorter than I am. I get into arguments all the time to the point where I've won hundreds of dollars over my height. People don't like to bet $10 in L.A. They're always like, 'I'll bet you 200 bucks.' "

After Toronto, Kunis has been appreciating filming Mike Judge's new comedy "Extract" in Woodland Hills, Reseda and Commerce. "I play a kleptomaniac employee who's a pathological liar," she says.

While Kunis has been working nonstop this year, "That '70s Show" gave her enough of a cushion that she can be choosy about her roles.

And she'd much rather play an assassin or kleptomaniac than a damsel in distress or garden-variety love interest. "You've got to base your career on something other than being FHM's top 100 No. 1 girl. Your looks are going to die out, and then what's going to be left?"

Source: Los Angeles Times

Kiev Leaders Locked In Trash-Talking As Economy Unravels

KIEV, Ukraine -- Ukraine’s political leaders seem oblivious to the global financial crisis and the worldwide media exposure that depicts them as unstable. There is an air of bravado among Ukraine’s elite.

French President and current rotating President of the European Union (EU), Nicolas Sarkozy speaks on October 18, 2008 in Camp David, Maryland. Leaders of the world's richest nations and biggest emerging economies will gather in Washington on November 15 for an unprecedented summit on tackling the global financial crisis, the White House announced.
President Victor Yushchenko’s decision to dismantle parliament and to call new elections – as well as his recent reaffirmation of this step – means Ukraine will have a weak interim government for at least the next three months.

Whatever the intrinsic merits of the president’s determination to break the policy deadlock, the decision shows scant regard for the scale of the international financial crisis that has rapidly brought growth to a screeching halt in the richest economies, led to huge job losses and obliterated financial institutions that were once “worth” hundreds of billions of dollars.

As recently as two weeks ago, Prime Minister Yulia Tymoshenko was taking an equally bold position, declaring that the country was immune to serious consequences from the international downturn as it was not fully integrated into the global economic community. And statistics on the country’s gross domestic product growth seemed to bear her out. The most recent data from Ukraine showed growth continued smartly upward through the end of September at an annual rate of 7.1 percent.

Only Victor Yanukovych, emphasizes the economic threat to Ukraine. But he does so because he is in opposition, not because he understands the issues.

Nor do Ukraine’s leaders seem to understand that they live in a global media environment. Accusations by the president that his rival, the premier, is a “traitor,” or her Oct. 21 blocking of the parliament, are shrugged off as “business as usual.” But to the international community, they are dire signals that the country is unstable.

Despite the political “trash talking” and “theatrics” of Ukraine’s leaders, with the global financial crisis having accelerated, there will be no escaping it.

The hryvnia, Ukraine’s currency, is already in a steep slide, with citizens rapidly converting significant portions of the 200 billion in hryvnias held in banks into safer dollars and euros. As a result, Ukraine’s central bank will be in a tough position to meet all the demand for hard currency that Ukraine’s banks (which need sources of liquidity) and citizens (who want the euro and dollar) will generate in the coming months.

Construction is in steep decline, too. And with steel prices plummeting globally, Ukraine’s former growth engines – its steel conglomerates – could lay off workers in an effort to adjust to the tougher times.

All this has already had a massive toll on the value of equities on the PFTS, Ukraine’s leading stock exchange. Inflows in foreign direct investment are also likely to be significantly affected, reducing available capital for growth, modernization and expansion.

Nor does the global slowdown necessarily mean that Russia’s price for natural gas will decline with the overall global decline in commodities. Not a chance. The bad news is that it usually takes about a year for gas prices to catch up with the price of oil. So there will be no real relief to Ukraine’s natural gas price tag come new year.

Given the domestic political chaos, it is small wonder that Western investors worry that, in the wake of the failure of Prominvestbank, the country’s sixth largest, there will be further financial tremors. As a result, rightly or wrongly, given the current political and policy turmoil, Ukraine is now viewed by many Western investors as the next potential Iceland, a country in the throes of bankruptcy.

All this does not mean the sky is falling. But it does mean that Ukraine’s leaders would be well-advised to drop some of their false confidence and insouciance. The coming months will need rapid and resolute actions. And there are questions whether the growing political rivalries at the top will allow for the rapid implementation of sensible policy.

Luckily, Ukraine’s increasingly sophisticated and enterprising business elite is sensitive to the challenges and threats posed by the global slowdown. Through their powerful influence on the three major political groupings, business is likely to press politicians to responsible action.

As importantly, there is a strong group of excellent professionals at the helm of Ukraine’s central bank. The government economic team of Victor Pynzenyk and Bohdan Danylyshyn is well-regarded and seen as highly competent by the international business community. As significantly, there are signs that pragmatic, growth-oriented and economically literate younger politicians, including Parliamentary Speaker Arseniy Yatsenyuk, are chafing at the bit as politicians continue to squabble. Their discontent with the range of political options now offered to voters may be the basis for well-funded new parties that will help break the deadlocked mold of Ukrainian politics.

All these are important reason for long-term optimism. In the mid-term, too, there may be good auguries for Ukraine.

The International Monetary Fund and World Bank project that, as a result of the global financial crisis, Europe and the United States will have something approaching zero growth in the coming year. Emerging markets are believed to be on the path of growth of between 3 and 7 percent in 2009, with Ukraine at the lower part of the range.

This should make Ukraine an attractive place to invest, if the country’s currency and financial system is not in a free fall. And that means the politicians must do their job and ensure that all sources of standby financing, including a loan package from the International Monetary Fund, is pre-negotiated and in place in case there is a need. They should also move forward with stalled privatizations. Parliament will need to act quickly to approve any package that is negotiated as well as other needed emergency measures.

If Ukraine’s leaders understand that they personally will be blamed by the public for any serious economic setbacks, there are strong prospects Ukraine can ride out the current global financial crisis. That is certainly what President Yushchenko, with support for re-election in early 2010 at single digits, must hope for. Otherwise, he would be far better served to allow Yulia Tymoshenko to continue serving as premier and to bear the brunt of public anger at steep economic decline.

Of course, it would be best if Ukraine’s leaders agreed to a short-term compromise and created a government of national unity that could cope with the economic crisis. But given the worry of Yushchenko and the business elite about Tymoshenko’s populist proclivities, and their lack of confidence in her stewardship of the economy, such an outcome appears unlikely.

Still, the odds are that, even without a global political compromise, Ukraine’s leaders will find a way of cobbling together and implementing policies to prevent an economic meltdown. That, alas, has been the standard operating procedure of Ukraine’s elite for most of the 18 years of independence.

Source: Kyiv Post

Food And Water Running Out On Faina

KIEV, Ukraine -- The situation on the Faina, a ship seized by Somali pirates, is critical, as reserves of water, food and fuel, including diesel fuel for the ship's generators, will last less than 30 hours, Channel 5 reported on Oct.22, with reference to Verkhovna Rada Human Rights Commissioner Nina Karpachova.

Ukraine's Human Rights Commissioner Nina Karpachova.
Karpachova is currently in Kenya neighboring Somalia, and she spoke with the vessel's crew on Tuesday, according to the channel.

She said that the situation on the Faina remains tense, however, the sailors are standing firm and their health is satisfactory.

"The Ukrainian authorities are now waiting for an answer from representatives of the parties involved in this conflict. They have been asked to render quick assistance to the Faina, in particular, to deliver water, food and diesel fuel," reads a channel statement.

Meanwhile, the Segodnia newspaper reported on Wednesday that those working for it had managed to contact one of the pirates by satellite phone.

The pirate said that his leader Mohammed is now out and that he would not hand over the phone to the crew, adding that the ship's crew might soon die.

"Everything is very bad with the crew, there is no water and food on the ship," the newspaper quoted the pirate as saying in very bad English.

Another conversation, reads the statement, lasted longer.

"Tell everybody that the crew will die. Possibly, tomorrow," the pirate said.

Source: Kyiv Post

Ukrainian Civil-Military Relations Come Under Strain

KIEV, Ukraine -- Like the political crisis in the spring of 2007, the crisis unfolding since September has placed great strains on law enforcement agencies. On April 2, 2007, and now again on October 8, the president disbanded parliament.

Berkut MVS Special Forces
In the spring of 2007 the Interior Ministry was controlled by the Viktor Yanukovych government and Anti-Crisis coalition. Interior Minister (MVS) and Socialist Vasyl Tsushko authorized the intervention of the MVS special forces (the Berkut) to defend the prosecutor removed by the president, and they clashed physically with the presidential guard (Directorate on State Protection [UDO]).

Under the Yulia Tymoshenko government, the MVS is controlled by Yuriy Lutsenko who, although he headed the pro-presidential Our Ukraine-Peoples Self Defense (OU-PSD) bloc in the September 2007 pre-term elections, has broken ranks with President Viktor Yushchenko and aligned himself with Tymoshenko.

Lutsenko has called on “democratic forces” to rally round Tymoshenko in the December 7 pre-term elections.

Conflict between the MVS and the president in the current crisis pits one wing of the disintegrated orange coalition against the other. MVS special forces (Berkut, Tytan, and Grifon) have been dispatched to guard state institutions.

In 2007 and today the president has drawn on two law enforcement units he directly controls: the Security Service (SBU) and UDO, which guards senior officials and is analogous to the U.S. Secret Service. UDO was part of the KGB in the USSR but was separated in 1992 when the SBU was established.

The SBU’s anti-terrorist unit Alpha and UDO were ordered by Yushchenko to guard the Constitutional Court, other courts, and Central Election Commission (CVK).

The courts and CVK are at the center of a battle of will between Tymoshenko and Yushchenko on the legitimacy of pre-term elections. Yulia Tymoshenko bloc (BYuT) deputies have condemned Alpha and UDO for blocking their entrance into the CVK.

MVS Minister Lutsenko protested that Ukrainian legislation only permitted the MVS to guard courts, not the UDO. The UDO’s stationing at the administrative court is an infringement of the law and “in actual fact a provocation,” Lutsenko stated.

“The MVS, responsible for security and order on territories belonging to courts, today finds itself in a difficult situation, when the head of state using other force structures attempts to apply pressure on courts reviewing the legality of presidential decrees on the dissolution of parliament,” Lutsenko publicly complained.

The situation is “unprecedented and shameful for Ukraine,” he added. Alpha and UDO units were stationed at the courts and the CVK illegally and without any coordination with the MVS, Lutsenko said.

Other security forces could be dragged in, as they were in the spring of 2007, when the president unilaterally issued a decree placing MVS Internal Troops under his command and bringing its commander into the National Security and Defense Council.

The president’s misuse of law enforcement agencies, especially the MVS Internal Troops, has turned a majority of parliamentarians away from his proposals for security reform.

His proposed Draft law 1317 outlining a reestablishment of a National Guard based on MVS Internal Troops was overwhelmingly rejected by parliament.

Anatoliy Hrytsenko, head of the parliamentary committee on national security and defense, led the way in opposing the creation of a National Guard.

Hrytsenko had been a loyal pro-Yushchenko Defense Minister and committed to military reforms and cleaning out the armed forces until his replacement in December 2007.

Hrytsenko, a member of the pro-presidential OU-PSD, was backed by the BYuT and the opposition in his opposition to the creation of a National Guard under the sole control of the president.

Ukraine had a National Guard from 1991 to 1999 that was established on the basis of Soviet Internal Troops, and during its nine year history it was under dual presidential-parliamentary control.

President Leonid Kuchma abolished the National Guard because he did not fully control it, as Yushchenko hoped to do in bill 1317. Abolishing the National Guard in 1999 meant that its units returned to the MVS.

Under the 1996 presidential constitution the MVS came under the control of the president who controlled the government. Under the 2006 parliamentary constitution the MVS comes under the control of parliament through its control of the government.

Yushchenko argued logically that all militarized groups (as opposed to police units) should be under the Commander-in-Chief, but it is ironic that not even orange political forces trusted Yushchenko enough to support the draft National Guard bill that would have put MVS Internal Troops in a National Guard under the presidents control.

MVS Internal Troops have twice moved on Kyiv but were turned back on both occasions. On November 28, 2004, they were sent to suppress the Orange Revolution; and in June 2007 MVS Internal Troop units moved to support the president.

MVS Internal Troops have been brought into Kyiv during the current crisis to support UDO units, MVS Minister Lutsenko complained.

Discontent with Yushchenko’s misuse of law enforcement agencies also explains support within parliament for the transfer of the SBU from presidential (as in the 1996 and 2006 constitutions) to joint parliamentary-government control.

This was the substance of bill 3086 on the SBU adopted on September 2 with the support of all factions of parliament except the pro-presidential wing of the OU-PSD.

The SBU has been described by the Tymoshenko bloc as an instrument used for political purposes by the president to deal with his opponents.

This view gained ground in August when the SBU requested the prosecutor’s office to open a criminal investigation into Tymoshenko’s alleged “treason,” which it refused to do, arguing that there was insufficient evidence in the 350-page document compiled by the presidential secretariat.

The SBU was also tasked with investigating her involvement in a bizarre assassination plot against presidential secretariat head Viktor Baloga.

The SBU opened an investigation into corruption among BYuT deputies in late 2007 and this month accused them of laundering money through, and conspiring to bring down, Prominvestbank.

Dragging law enforcement forces into political battles, be it by Yanukovych in 2007 or Tymoshenko today, does not bode well for improved civil-military relations in Ukraine.

Source: Eurasia Daily Monitor

Russia Denies Talks On Purchase Of Missile Cruiser From Ukraine

MOSCOW, Russia -- Russia is currently not involved in talks with Ukraine over the purchase of an unfinished missile cruiser for the Russian Navy, Russia's state arms exporter Rosoboronexport said on Tuesday.

Unfinished Slava-class Ukraina missile cruiser.
The Ukrainian government ordered Ukrspetsexport, the state-owned arms trader, to look for potential buyers of the Slava-class Ukraina missile cruiser back in 2005. Ukrainian Defense Minister Yuriy Yekhanurov mentioned the potential purchase of the vessel by Russia in June this year.

"Rosoboronexport has no instructions to buy the cruiser [from Ukraine], although I cannot deny that we were interested in this ship," said Ivan Goncharenko, Rosoboronexport's first deputy general director.

He added that to hold talks on the potential purchase of the cruiser Rosoboronexport must receive relevant instructions and sufficient funds.

Construction of the Slava-class Admiral Lobov cruiser (Project 1164) was launched in 1984 at the Nikolayev shipyard in Ukraine but stalled at the final stage, when it was more than 90 % ready, in late 1980s due to a sharp reduction in military expenditures.

The cruiser was renamed the Ukraina in 1992. The government of Ukraine initially planned to complete construction of the cruiser for its own Navy but later decided it would not fit the country's naval strategy.

In June 2002, Anatoly Kinakh, Ukraine's prime minister at the time, and Russia's ambassador to Ukraine, Viktor Chernomyrdin, discussed an acceptable agreement on the missile cruiser, as a Russian-Ukrainian agreement of 1993 stipulated that both parties should make joint decisions on military facilities and equipment that had not been completed in the Soviet era.

The Ukrainian defense ministry was instructed in 2005 to take the Ukraina and pay for its maintenance.

The cruiser is 96 % ready but has passed no sea trials yet and has not been fitted with missile systems. About $30 million is needed to complete its construction.

Slava-class cruisers were designed as surface strike ships with some anti-aircraft and ASW capability. They carry 16 SS-N-12 Sandbox nuclear-capable supersonic anti-ship missiles, with launches mounted in four pairs on either side of the superstructure.

In addition, the cruiser is reportedly armed with 64 SA-N-6 Grumble long-range surface-to-air missiles (SAM) and 40 SA-N-4 Gecko short-range SAMs.

NATO experts had dubbed Russian combat ships of this class "the killer of aircraft carriers," as they can launch 1,000kg of high-explosives, or a tactical nuclear warhead, out to a range of 300 nautical miles.

Russia has three Slava-class cruisers in service with its Navy.

Source: RIA Novosti

Kudrin Says Russia Supports Ukraine's Bid For IMF Funds

MOSCOW, Russia -- Russia supports Ukraine's bid for funds from the International Monetary Fund, Finance Minister Alexei Kudrin said.

Russian Finance Minister Alexei Kudrin.
"We have to take into account the crisis of 1997-1998 when this help was not delivered on time and was not sufficient to block the crisis," Kudrin said in Moscow today.

Russia experienced this in 1998, when this help was not sufficient.

"Russia will defend the rights of developing nations" through the IMF, said Kudrin, who is a board member.

The minister spoke during a meeting of finance ministers from the Commonwealth of Independent States, a group of former Soviet republics including Russia.

Growth in the CIS will probably slow to 7.2 percent this year from 8.6 percent in 2007 as the world faces "the most dangerous financial shock" for developed markets since the 1930s, the IMF said on Oct. 8.

The pace of economic expansion in Russia is set to slow to 7 percent, compared with 8.1 percent last year, according to the IMF.

Source: Bloomberg

Ukraine May Push Russian Warships Out

MOSCOW, Russia -- Ukraine government may force Russia's Black Sea Fleet out of a naval base at the port of Sevastopol by refusing to renew the lease.

Russian Deputy Prime Minister Sergei Ivanov.
On Monday, Russian Deputy Prime Minister Sergei Ivanov told the BBC that Ukraine might refuse to issue the Russian fleet a new lease upon its expiration in 2017.

"Yes, I can imagine that easily after 2017. Why not, if the Ukrainian government then in power decides not to prolong the lease?" he said.

In that case, Russia would have to end its 200-year-old presence at the port, on Ukraine's Crimean peninsula, which is mostly populated by an ethnic Russian population.

The possibility was considered by Ukraine after Russia's August confrontation with Georgia. Ukraine claims that Russia could use force to occupy Crimea, thus securing the future of its fleet.

This is while Russia has repeatedly asserted that the August war was sparked by Georgia's attack to reclaim the independence-leaning republic of South Ossetia and that it therefore has nothing to do with the sovereign Ukrainian port of Sevastopol.

"We are not aggressive…. We have recognized the territorial integrity of all former Soviet republics. That was in 1991. Russia, of course, has no territorial ambitions regarding any former Soviet country," Ivanov said.

Source: Press TV

In Ukraine, Police Write Notes To Prostitutes' Parents

KIEV, Ukraine -- In an attempt to dampen growing prostitution, Ukrainian law enforcers have adopted a new method of writing unpleasant notes to the parents of those arrested in connection with the sex trade, the Sehodnia newspaper reported on Tuesday.


The letter-writing campaign is aimed at reducing sex-for-hire in the former Soviet republic by bringing parental pressure to bear on prostitutes, said Aleksey Lazarenko, an internal ministry spokesman.

"We inform the parents their daughter was arrested at the moment she was selling her body," Lazarenko said.

"As soon as the parents of one girl found out how their daughter was earning a living, there was such a scandal in the household, that (the prostitute) had no quiet at home for an entire week, and she quit the business," he said.

The programme has had a wide-reaching effect on the prostitution industry nationwide by reducing dramatically numbers of prostitutes on the street, as most feared rows with their parents more than police, according to the report.

Prostitution is technically illegal in Ukraine but laws against it are rarely enforced by poorly-paid police. Economic hardship, drug addiction, and limited career options for women have pushed tens of thousands of Ukrainian women to sell sex.

Ukraine's government has declared the situation a "national disgrace" but nonetheless low-cost streetwalkers and bordellos are a common feature not just of all major Ukrainian cities, but most small towns and even some remote villages.

Source: NDTV

Ukraine Goes From Orange To Red

MONTREAL, Canada -- For all the hand-wringing and justified concern about Asian economies, many countries in the region are in much better shape than several of the emerging markets in Europe. Hungary may yet have recourse to lending from the International Monetary Fund (IMF), while the Iceland debacle has received a good deal of publicity. Ukraine's plight is hardly less extreme.

Ukranians stand in a queue at a cash dispenser at the Prominvestbank office in Donetsk, Ukraine, Tuesday, Oct. 21, 2008. The state has taken over management of Prominvestbank to defend the banking sector and avoid a mass run on banks as the country is severely shaken by the global financial crisis.
Ukraine is in the midst of a financial and banking crisis, exacerbated by political turmoil, that has driven the principal national stock equities indicator, the PFTS Index, down 78% from a high of 1,209 in mid-March to 266 on Monday.

The country relies heavily on external finance, and its banking system is by some measures the most at risk after Iceland’s, which collapsed only days ago. On the basis of the cost of its credit-default swaps, Ukraine is the least creditworthy of all of Europe’s emerging markets.

During the first two weeks of October, a bank run depleted aggregated accounts by about US$1.3 billion and the National Bank of Ukraine had to give a $1 billion stabilization loan to the sixth-largest bank in the country.

Since then the central bank has reduced reserve requirements, forbidden the premature cashing-in of bank deposits with maturity dates, imposed limits on loans, and established a maximum 5% collar between the buy and sell rates for foreign-currency trading.

The foreign exchange market is negatively affected also by the external balance, the state's debt to Russian energy giant Gazprom, and also the debt to the central government incurred by Ukraine's various regional authorities for natural gas distributed throughout the country.

The national banking authority has had to sell US dollars to prop up the value of the hryvnya, the national currency, which has declined by 20% in recent weeks and by 12% just this month. The ratings agencies have responded unsympathetically. To give an example, Standard and Poor's downgraded the country’s long-term foreign currency sovereign credit rating to BB- from B+.

To complete the painting of the economic picture, metals account for one-quarter of Ukraine’s gross domestic product and over two-fifths of exports, and as I have noted elsewhere, prices for metals have fallen worldwide; at the same time, subsidies on energy prices in Ukraine have been increasingly reduced under pressure from Russia, from which Ukraine imports much of the energy it consumes.

For all these reasons, the IMF is setting up a US$14 billion standby facility for the country to stabilize its financial system. This is all taking place in a political context of continuing intra-elite conflict and turmoil that has been going on since the "Orange" revolution at the end of 2004.

Viktor Yushchenko was sworn in as president in January 2005 and Yuliya Tymoshenko, a former minister of energy, was named prime minister. Eight months later, Yushchenko dismissed Tymoshenko's government and named one of his own allies to replace her. Four months after that, in January 2006, a vote of parliament removed this new government over an agreement with Russia that sharply increased the cost of imported gas.

Yanukovich’s (Moscow-oriented) Party of the Regions became the largest party in parliament after March 2006 elections. It was outnumbered by the "orange" coalition (Yushchenko’s party plus Tymoshenko’s bloc), but this group was unable to form a government. Finally, in July 2006, Yanukovich was named prime minister on condition that he continue a pro-Western foreign policy orientation.

In January 2007, Yanukovich's supporters in parliament voted a law to reduce the president's prerogatives in governing. Yushchenko responded two months later by dissolving parliament. In new legislative elections, the orange parties gained a bare majority and Tymoshenko was (again) named prime minister, with no votes to spare.

Earlier this year, she survived a no-confidence vote, only for one of the president’s chief assistants to accuse her in the press three months ago of treason to Ukraine’s national interests for not supporting Georgia against Russia.

Last month, Tymoshenko’s group voted with Yanukovich’s party to (again) limit by statute the president's powers, following which Yushchenko's parliamentary allies left the orange coalition. In this context, following the inability of anyone to form a new ruling coalition, Yushchenko two weeks ago called for new parliamentary elections.

A great deal of criticism has been voiced in Ukraine over this intra-elite jockeying, which many observers see as positioning by Tymoshenko for a run for president in 2009. According to one report, the IMF has "recommended" cancellation of the snap parliamentary elections "as a condition" of access to the aforementioned $14 billion facility. On Monday they were postponed by a week from December 7 to the 14.

It is not altogether clear that the elections will take place even then, since administrative preparations are behind schedule and the cost of holding the elections may be deemed excessive in the midst of the immediate financial crisis.

An improvised election campaign at present would only increase negative sentiment and paralyze the government, while energy costs, inflation and the current account deficit continue to increase.

Compared to this tableau, some Asian economies are not in such a bad situation after all.

Source: Asia Times

Ukraine's Iron Lady A Woman Of Mettle

KIEV, Ukraine -- Oligarch, street revolutionary, gas trader, fashion glamourpuss, prime minister: Ukraine's charismatic 'iron lady', Ms Yulia Tymoshenko, has had many incarnations. There might be yet another ahead.

Ms Tymoshenko is as much about glamour as political acumen. Always impeccably turned out, she keeps her hair in a traditional Ukrainian plait.
After breaking once again with President Viktor Yushchenko - her former ally during Ukraine's Orange Revolution - Ms Tymoshenko, 47, is clearly manoeuvring herself to take his job.

If she did - and presidential elections are due in the next 18 months - she would become the only female head of state in a former Soviet republic.

To many observers, it would be the natural culmination of a career that started in obscurity, took her from great riches to prison and out again, and was utterly transformed during the biting winter nights of Ukraine's 2004 'revolution'.

Flamboyant and unpredictable but astute and utterly formidable to her adversaries, Ms Tymoshenko has effected an extraordinary transition from rich but reviled oligarch to the people's favourite.

Sustained by a carefully crafted image that is part Euro-chic and part Ukrainian folk princess, she now bestrides the Ukrainian political scene like a cross between Britain's first female prime minister Margaret Thatcher and actress Gwyneth Paltrow - prominent not just in television footage of Cabinet meetings, but also from fashion shoots and glossy magazines.

The symbiosis of power, femininity and brashness is perfectly summed up in her party's name:

BYuT (pronounced beaut, and short for Bloc Yulia Tymoshenko).

'She's bright, she's glamorous, she's intelligent, and she uses all three in skilful combination,' said Dr Andrew Wilson, an expert on Ukraine with the European Council on Foreign Relations. 'Her skill lies in her capacity for reinvention.'

Her latest reinvention has been quite startling. For years a fierce critic of Ukraine's menacing eastern neighbour, Russia, she has softened her rhetoric of late, refusing to criticise Russia for its Georgia escapade and popping up in Moscow to meet Russian leaders Dmitry Med-vedev and Vladimir Putin.

Mr Putin in particular appears bemused by her. When asked recently about perceptions that she was adopting a more Russia-friendly stance, he reportedly rolled his eyes and said: 'Heavens above. What have we come to now?'

'What Tymoshenko is trying to do is place herself astride the key divides in Ukrainian politics,' said Dr Wilson, noting that the country - the largest in Europe - is split down the middle between a pro-West, Ukrainian-nationalist western half and a russophone, ethnic Russian eastern half. 'It's probably a winning move in terms of domestic politics.'

Little is known of Ms Tymoshenko's early life. She was born in Dnipropetrovsk in eastern Ukraine during the post-Stalin thaw in November 1960 and studied cybernetic engineering at the city's university, where she met her husband Oleksandr. She was not yet 20 when her daughter Yevgeniya was born.

An undistinguished decade followed. Then suddenly, after a period spent running a moderately successful video rental chain, she emerged as the managing director of an oil trading company. This morphed into an energy trading com- pany, United Energy Systems of Ukraine (UESU), which was granted a monopoly for dealing with the vast volumes of gas pumped from Russia to Ukraine. It was a very lucrative business to be in

According to Polish academic and Ukraine expert Kataryna Wolczuk, 'she emerged with a personal fortune, the nickname Gas Princess, and an incomparable insight into the lucrative, corrupt and highly opaque gas-trading regime between Ukraine and Russia'.

By 1997, UESU was coming under scrutiny for the kind of murky accounting practices commonplace in the era of capitalistic free-for-all that swept parts of the former Soviet Union in the 1990s. But Ms Tymoshenko was already moving on. She had a seat in Parliament and, by the end of 1999, a government position as deputy prime minister. It didn't last long.

Ukraine was already descending in a whorl of intrigue and scandal that disfigured the last years of Leonid Kuchma's presidency. Ms Tymoshenko did not escape. She was fired in 2001 and charged with embezzlement. She even spent a month in prison until the charges were thrown out.

But the experience apparently triggered some kind of epiphany, because she quickly transformed herself from establishment oligarch into anti-government rebel-raiser - a street revolutionary at the head of a movement that grew until it camped out in downtown Kiev in front of the world's cameras toppling the old order.

Ukraine's Orange opposition felt it had been robbed of election victory. Ms Tymoshenko and Mr Yushchenko were the twin figureheads. They became known as the Beauty and the Beast in Western circles (she for her looks; he for the facial disfigurement brought on by dioxin poisoning that has never been explained properly).

Alas, there was no fairytale ending. Even at Mr Yushchenko's inauguration, the political marriage was turning sour.

'When did it all go wrong? Well, you could point to his inauguration, when his people believe that she organised her people to chant her name, which rather upstaged him,' said Dr Wilson.

She was fired in 2005, amid disagreement over what to do about the barons who had got rich quick under privatisation. Ms Tymoshenko wanted to go after them; Mr Yushchenko was more cautious. She, as ever, had her own theories as to why he had fired her. 'Let's be honest. Men have a hard time competing with women on a professional level,' she said at the time.

If that is true, it might be even truer in the post-Soviet political space, where male chauvinism flourishes and even women are not keen on female leaders. This makes Ms Tymoshenko's ascent even more remarkable.

As Dr Wolczuk put it: 'In a country notorious for its dismissive attitude towards women, Tymoshenko has seen off presidents and prime ministers, endured imprisonment and a probable assassination attempt to emerge as the most popular politician in the country.'

She will soon get another opportunity to test that popularity. Two weeks ago, after a second great schism opened up between the two Orange leaders, Mr Yushchenko finally dissolved Parliament and called snap elections, scheduled for Dec 7. Ms Tymoshenko was apoplectic. 'I believe this is nonsense, a crime against the country and an absolutely irresponsible political step,' she said.

And in a clever stunt that betrayed how media-savvy she is (she has a Facebook presence and other personal websites), she immediately invited Ukrainian television to film her trying to contact the President, the man whom she had helped sweep away the old order.

'This is a direct line which the President is supposed to pick up, whatever the circumstances,' she tells the camera. 'Unfortunately, for the last six months, it has worked in only one direction. When I call, I get no answer, just beeps.'

When the inexorable rise of Ms Tymoshenko is complete, few will refuse to take her calls.

Source: AsiaOne

Mette-Marit Injured In Ukraine

KIEV, Ukraine -- Crown Princess Mette-Marit, of Norway, tripped and fell on some stairs while on an official visit to Ukraine on Monday. The incident resulted in cancellation of her morning program and later, most of the rest of the trip.

Crown Princess Mette-Marit of Norway, in Kiev on Sunday, before she fell and hit her head.
The crown princess is in Kiev as part of her ongoing efforts to help people suffering from HIV/AIDS. She was due to visit a center for HIV/AIDS patients Monday morning.

Instead she fell and hit her head during a meeting with the organization All-Ukrainian Network, for persons who live with HIV or AIDS.

The fall prompted officials to insist on a doctor's examination and head scan, which led to a diagnosis that the princess suffered a slight concussion.

She was told to spend the next two days resting in bed. Her visit to Ukraine was only scheduled to last until Wednesday morning.

It's not the first time Crown Princess Mette-Marit has suffered unfortunate incidents connected to official foreign trips.

One of her first official visits, to Germany, was cancelled after she suffered severe sunburn during a TV interview. Earlier this year a scheduled trip to Chile was cancelled after she fell ill.

Her trip to Ukraine is part of her role as a special envoy for the United Nations. It's her fourth trip for UNAIDS, the organization that coordinates HIV/AIDS work in the UN.

She earlier has traveled to Canada, Nicaragua and Malawi to encourage tolerance and acceptance of HIV/AIDS patients.

Source: Aftenposten

Jerome Wilson: Is Ukraine Next On The Russian Menu?

NEW YORK, NY -- What's next for the hungry bear? Having chewed up much of the nation of Georgia, are the Russians now looking for another morsel, as they seek a larger place at the table of nations? Without question the next tempting dish for Russia is Ukraine.

Columnist Jerome Wilson is a former New York State Senator who served for many years as counsel to the New York Newspaper Publishers Association.
However, unlike its “over the top” military actions in Georgia, Russia's advances toward Ukraine, so far, have been both subtle and enticing.

In the grand scheme of things Ukraine has always been more important to Russia than Georgia. Georgia was an irritant to the Russians, with a president who even made it more so. However, Georgia was never of major strategic importance.

Ukraine on the other hand is of enormous strategic value to Russia. The Ukrainian port city of Sebastopol is home to Russia's Black Sea naval fleet, where some 50 Russian ships and 80 aircraft are stationed. Also, rather embarrassingly, Russia has been forced to rent the space for its Black Sea naval base from Ukraine. Certainly, it is always nicer to be your own landlord.

Also, whereas Georgia was an easy-to-conquer nation of five million, Ukraine has a population of 47 million. To humble a nation of this size would clearly fit nicely into the restorative Soviet dreams of Russia's true leader, Prime Minister Vladimir Putin.

Putin has not been idle. Consistent with Russia's new velvet glove offensive, he recently held a cordial meeting in Moscow with Ukrainian Prime Minister Yulia Tymoshenko. This in turn was followed by a late night chat with Russian President Dmitry Medvedev.

The fiery Tymoshenko is an important person for Russia to entertain and to woo. She was the co-leader, with Ukrainian President Viktor Yushchenko, of Ukraine's historic “Orange Revolution” in 2004. As the world watched, this event dramatically replaced a Russian-leaning government with a Western-style democracy.

Tymoshenko and Yushchenko now, however, are bitter enemies. The split between the two became evident when the prime minister declined to accompany the president to Georgia while the war was raging. Rather she stayed home, calling simply for a cessation to the hostilities.

Also, whereas President Yushchenko has been strident in calling for Ukraine to become a member of NATO, Prime Minister Tymoshenko has been far more muted in favoring such a step. Her position reflects a recent poll, reported in the UK Times, that found that Ukrainians by a margin of three to one did not wish to join the military alliance. On the other hand Ukrainians do want to join the European Union to take advantage of the benefits that this 27-nation trade alliance could provide.

Greatly acerbating the split between the two leaders, in September Prime Minister Tymoshenko successfully sponsored a measure in the Ukrainian parliament that diluted the powers of Yushchenko's presidency. She pulled this off by enlisting the support of the parliamentary group that represents the Russian speakers in the country. This pro-Moscow group is one of the three major voting blocs in the parliament. The other two are those members loyal to the president and those loyal to the prime minister.

The president's reaction to the prime minister's disloyalty was to call for a snap election to create a new parliament, as early as Dec. 7. A new election would mean the third general election in Ukraine in three years and would be an expensive proposition as well.

In response, the prime minister went to court and won a judgment that the president's call for new elections was illegal. However, before the court's decision could become effective, President Yushshenko fired the judge and then claimed that the decision was invalid.

The upshot of this maneuvering, which sounds more like a skit on “Comedy Central” than the actions of a government of close to 50 million people, is that the lower court's judgment, canceling the election, is now on appeal to a higher court. Until the higher court decides the question, election officials are refusing to begin preparations for another election.

Meanwhile, while all this is going on, Bloomberg News reported that the costs of protecting the Ukraine economy from default soared, after President Yushchenko's called for early elections. In fact, Ukraine has the highest risk of default among all Europe's emerging markets. “It's a panic,” said a Ukrainian fund manager, who manages more than a billion dollars of Ukrainian assets from the capital of Kiev.

As for Ukraine's political future, should Tymoshenko decide to run to replace Yushchenko as president, she again might need the votes of the bloc that represent the Russia speakers in the parliament. Should she accept support from this bloc, the ultimate question would be how many Moscow friendly actions would be required to bring the members of this bloc over to her side. How she answers this question could be critical to her nation's future as a truly independent nation.

Oh, yes, and on top of all this, the pirates off Somalia have yet to release, peacefully, the huge Ukrainian cargo ship that they captured in the Arabian Sea.

Source: Ithaca Journal

Ukraine's Prime Minister Urges Factions To Unite

KIEV, Ukraine -- Ukrainian Prime Minister Yulia Tymoshenko urged rival political forces Sunday to unite in the face of the global financial crisis and abandon plans for early parliamentary elections.

Ukraine's Prime Minister Yulia Tymoshenko speaks during her televised address in Kiev, October 19, 2008. Tymoshenko urged political parties on Sunday to form a new government, draft a plan to shield Ukraine from the world financial crisis and abandon an election called by the country's president.
Tymoshenko, who is battling to keep her job and torpedo President Viktor Yushchenko's plan for new elections in early December, called on parliamentary factions to create a broad governing coalition and a new Cabinet.

In a televised appeal, Tymoshenko warned that the third parliamentary election in as many years would "destroy the country" and said its leaders must cast their differences aside and rescue the economy.

The global financial crisis "is already knocking on our doors, but we can refuse to open the door," Tymoshenko said.

She said a new government based on a broad parliamentary coalition should work to keep the country from economic disaster until the threat has passed. "And after that you can have any elections you like," she said.

Ukraine's government has had to rescue two top banks, the national currency's rate has fallen around 12 percent in recent weeks, the stock market went into a free fall and the country is seeking a multibillion loan from the International Monetary Fund to help stabilize the financial sector.

The global financial meltdown's impact on Ukraine has been exacerbated by political turmoil in the ex-Soviet republic — Tymoshenko's coalition with 2004 Orange Revolution ally Yushchenko collapsed last month amid mutual recriminations.

Tymoshenko's call for a broad coalition appeared to be an invitation to Yushchenko and opposition leader Viktor Yanukovych, whose Russia-friendly party hold the most seats in parliament. It also suggested allies in a new coalition would have to agree to her terms.

Tymoshenko has said she would like to revive her shattered pro-Western coalition with Yushchenko, but has also said she would be prepared to strike an alliance with Yanukovych for the sake of rescuing the economy.

Tymoshenko is the most popular politician in Ukraine, according to many polls, and her faction is the second biggest in parliament, so she would be unlikely to accept any other job than that of a prime minister in a new Cabinet.

The coalition fell apart after Tymoshenko moved to adopt legislation trimming Yushchenko's powers. Yushchenko also accused her of selling out to the Kremlin and hurting Ukraine's chances of joining NATO by going easy on Russia over its August war with Ukrainian ally Georgia.

Tymoshenko has continued working until a new Cabinet is appointed following an election.

In a bid to portray herself as above a dirty and damaging political fray, Tymoshenko said she and her party were "unilaterally" taking themselves out of the standoff and would concern themselves only with saving the economy.

If her call for a new coalition goes unheeded, she said, "Then our team will counter the crisis on its own and defend the people."

Yushchenko has set a Dec. 7 date for new elections, but Tymoshenko's protests and court appeals have hampered preparations. Election officials said the vote will have to take place later because they are running behind on organizing it.

Source: AP

Relatives Raise Money For Seized Ukrainian Ship

NAIROBI, Kenya -- Relatives and families of the hijacked Ukrainian ship have raised money to pay Somali pirates who are demanding eight million U.S. dollars to release the crew who were seized last month, a regional maritime official said on Sunday.

The MV Faina
Andrew Mwangura of the East African Seafarers' Assistance Program said the relatives and friends in Russian and Ukraine have raised eight million dollar ransom which is expected to be handed over to the pirates sometimes this week.

"Friends and relatives of the 17 Ukrainian crew members of the ill-fated MV Faina have collected money for ransom," Mwangura told Xinhua by telephone on Sunday.

"Most of the money had come from leading politicians including the former Ukraine Prime Minister Viktor Yamukovyeh," he said.

The development, however, contradicts the position taken by the Kenyan government which has maintained that it will not pay ransom, arguing that such move would encourage the continuation of such acts.

Last week, Foreign Affairs minister Moses Wetangula said he was confident that the pirates will not carry the threat to blow the ship. The minister also said the economies of countries along the Indian Ocean shoreline have been seriously affected by piracy.

He urged the international community to urgently assist in patrolling the unsafe waters near Somalia which has been without a proper government for decades.

"The cost of doing business alone particularly along this region is going up. Insurance is going up. Some shipping lines fear coming here and this is affecting us all the way to South Africa," he said.

He pointed out that most countries along the coastline lacked the necessary naval resources to adequately deal with the pirates who have attacked at least 69 ships since the start of this year.

The ship is carrying tanks and other weapons which were destined for the port of Mombasa but the ultimate destination has been a source of controversy with suggestions that the arms were headed to southern Sudan and not Kenya.

The Somali pirates had issued 72-hour deadline for the ransom to be paid or else they blow up the Ukraine ship but analysts say it was a negotiation gimmick. They have since withdrawn the deadline.

The government maintains that the Russian-made arms were being delivered to Kenya to be used by its military.

But BBC News revealed early this month what it said was a copy of the freight manifest aboard the hijacked ship, MV Faina.

The alleged manifest shows contract numbers for 33 T-72 tanks, grenade launchers and anti-aircraft guns containing the initials GOSS, which is an abbreviation commonly used in the region to refer to the government of southern Sudan.

The manifest names Kenya's defense ministry as the consignee. Oil-rich southern Sudan, which fought a 20-year-long civil war with the northern government in Khartoum, is believed by many in the region to be in an arms build-up before the territory's 2011 referendum on secession.

Last week, Sudan summoned the Kenyan and Ethiopian ambassadors to protest against what it said were illegal shipments of arms to its semi-autonomous south.

Sudanese energy minister has put off a planned visit to Kenya this week in protest over "violations" linked to an arms shipment that Western diplomats said was bound for southern Sudan, and a plane-load of weapons from Addis Ababa.

Meanwhile, Mwangura said all crew members of the seized MV Stolt Valor are safe but under severe distress due to the deteriorating living conditions.

He said humanitarian efforts to supply water and food was underway on Saturday evening, but the gunmen holding the ship have not yet allowed it to come aboard.

Source: Xinhua

Hungary And Ukraine Line Up Outside Support

LONDON, England -- The global credit crisis took a fresh turn yesterday as both Hungary and Ukraine approached international institutions for support in an effort to avoid following Iceland into financial turmoil.

Dominique Strauss-Kahn, IMF managing director.
It was the first time in the 15-month credit crunch that multi-lateral agencies such as the International Monetary Fund had agreed to help bail out European countries - a clear sign of the difficulties debtor nations face raising finance from credit-starved markets.

"Many countries seem to be experiencing problems because of the repatriation of private capital by foreign investors or the reduction of credit lines from foreign banks," Dominique Strauss-Kahn, IMF managing director, told the Financial Times.

"We are ready to support these economies and we are in discussions with a number of them."

In Kiev, Yulia Tymoshenko, prime minister, said the IMF was ready to consider up to $14bn (£8bn) as a special loan to stabilise Ukraine's financial system.

In Budapest, the European Central Bank came up with a €5bn (£4bn) credit line to cover an acute shortage of euros among Hungarian banks.

The moves came amid more turmoil on global markets, with investors focusing on the mounting prospect of recession.

The FTSE 100 closed down 5.3- per cent at a 5½-year low. The decline, combined with Wednesday's 7.16 per cent fall, was its worst two-day performance since the crash of October 1987.

It followed steep falls in Asia, where Japan's Nikkei 225 index fell 11.4 per cent, its worst one-day decline since 1987.

In a day of extreme volatility on US markets, the S&P 500 closed up 4.3 per cent, having been down as much as 4.6 per cent. The Vix index - Wall Street's "fear gauge" - hit a record 81.17 during the day.

Authorities in both Ukraine and Hungary insisted they were not in difficulties. Hungary's forint, which had lost 7 per cent the day before, edged up 1.5 per cent, but stocks fell sharply.

In Kiev, the hryvnia dropped 3 per cent against the US dollar and equities plunged 5 per cent, taking them down nearly 80 per cent on the year.

The ECB's €5bn facility for Hungary marked the first time it has publicly extended support outside the eurozone to a European Union member. The bank, which has occasionally made unpublicised loans, is not expected to give credit to non-EU states.

The IMF said this week that it was also ready to help Budapest.

Hungary has run into trouble with borrowers taking out foreign currency loans, which are now drying up in the global credit squeeze, compounded by heavy budget deficits.

Ukraine's banks are facing difficulties repaying foreign credits just as the current account is widening, with a slump in demand for steel, the country's main export.

The troubles in Kiev are complicated by political turmoil and the prospect of early elections in December. Ms Tymoshenko said the country could need $3bn-$14bn in IMF support but officials emphasised the funds were not required immediately.

The two countries' difficulties are echoed elsewhere in eastern Europe, including Russia and Poland.

Source: Financial Times

Russia Fleet 'May Leave Ukraine'

MOSCOW, Russia -- Russia's deputy PM has told the BBC the country's Black Sea Fleet will vacate its naval base in Sevastopol in 2017 if the Ukrainian government demands it.

Russia's deputy PM Sergei Ivanov
Speaking exclusively to Panorama, Sergei Ivanov said Russia would seek to renew its lease on the Crimean port, but will move the Fleet if it cannot.

The move will anger nationalists who consider Sevastopol a part of Russia.

It is feared the port could become a flashpoint in already strained relations between Russia and the West.

Asked if he could envisage the Fleet not being based in the Crimea - its home for the last 225 years - Mr Ivanov, Prime Minister Vladimir Putin's number two who oversees Russia's military and industry, said:

"Yes I can imagine that easily after 2017. Why not, if the Ukrainian government then in power decides not to prolong the lease?"

It will also surprise the West where in the wake of the war in Georgia many fear Moscow could seek to reclaim parts of the Crimea by force to secure the Fleet's future.

'British and US aggression'

Mr Ivanov however dismissed such claims as Cold War-style propaganda and gave Russia's strongest assurances to date that it has no territorial ambitions.

"We are not aggressive," said Mr Ivanov. "We have recognised the territorial integrity of all former Soviet republics. That was in 1991. Russia, of course, has no territorial ambitions regarding any former Soviet countries."

"We are not going to start a war or attack any country. Right now, in fact, Russia does not fight any war at all. If you analyse how many wars the United States and Britain are fighting - it's quite different," he added.

The future of the Black Sea Fleet in Sevastopol is a sensitive and emotional issue for most Russians.

The Crimea was handed over to Ukraine during Soviet times when the transfer was a mere legal technicality - and no-one envisaged the collapse of communism and Ukraine's subsequent independence from Moscow.

Local opposition

In Sevastopol, most locals feel closer to Moscow than Kiev, the Ukrainian capital.

They would like to see the peninsula returned to Russia and are bitterly opposed to the possibility of the Black Sea Fleet leaving. Some would be prepared to take up arms to prevent that from happening.

Asked what would happen if the Ukrainian government kicked out the Fleet after 2017 despite strong local opposition, Mr Ivanov, who spent 20 years in the KGB and was defence minister for six years, said:

"I love Crimea and even have relatives there but that is Ukraine's problem, not Russia's."

Despite the conciliatory tone, which comes as Russia seeks to rebuild its relations with the West in the wake of the war in Georgia, Mr Ivanov mounted a robust defence of Russian action in the tiny state and strongly criticized Nato's expansion eastwards.

Missile shield

He also dismissed America's claims that its plans for a missile defence shield in Europe are to protect it from Iran and North Korea.

He said Russia sees the shield - parts of which are to be stationed in Poland and the Czech republic - as a threat to Russia.

Mr Ivanov warned that Russia would react militarily if the plans went ahead, but also rubbished a previous threat made by a Russian general who said Poland was exposing itself to a possible nuclear strike if it agreed to station parts of the shield on its territory.

"Russia will definitely react, because we can't just not react," said Mr Ivanov, who as a teenager spent several weeks studying English in London.

"A new potential military will in several years be present, very close to our borders, only 300 kilometres away. But that doesn't mean of course that we are planning a new nuclear attack on the Czech Republic or Poland. That's total rubbish."

"There are still many Cold War warriors. Many Brits and Americans who still think that all Russians are drunk and treacherous, and that we spend our time thinking how to attack the West. That's part of old-style Cold War propaganda. There's too much mistrust. The wall should go. That's my favourite Pink Floyd song."

Misunderstanding

Mr Ivanov's message reflects the general mood in Russia - which Monday's Panorama seeks to test.

Nearly 20 years since the end of the Cold War, Russians feel let down by the West. Gone is the early euphoria. Instead most Russians now feel encircled by the West as a result of Nato's enlargement and are convinced the West wants Russia to be weak.

They also feel misunderstood by the West and argue that we are the true Cold War warriors, not them.

Many abroad vilify Mr Putin - who led Russia as president for eight years and remains its most powerful man despite stepping down and becoming prime minister.

By contrast he is genuinely popular among most Russians. In the wake of the war in Georgia, relations between Russia and the West are at their lowest since the collapse of the Berlin Wall.

Talk of a new cold war is exaggerated but as our investigation demonstrates, far from narrowing, the gulf in understanding between East and West is deepening.

"Yes Russia is in many ways its own worst enemy," said Vladimir Pozner, a Soviet propagandist during Communist times who is now one of Russia's sharpest commentators.

"But there are far too many things the West does not get about Russia. Most of all it does not want to understand that if you are a country which has never had democracy in its entire history then you cannot expect it in the space of 15 or 20 years to go 'Bingo - we're now democratic'. It's going to take generations. This country is still run by people who grew up in Soviet times."

"Give this country a break. Let the Russians evolve and don't put that much pressure on them because if you do you'll bring out the worst. You'll bring out the super patriots who will say: 'You see, we told you can't trust the West'."

It is a warning echoed less diplomatically by one of Mr Putin's greatest admirers - Nikita Mikhailkov, the most powerful figure in Russia's film industry who is a personal friend of the prime minister.

"You don't like me, Englishman," he told Panorama. "You haven't liked me for centuries, but I respect you. I want to engage with you, but on equal terms. I want you to respect me as I respect you."

"Russia must be respected, not least because it's strong and can answer back. It can say no, you want to talk let's talk. You want to fight, let's fight. But then don't complain."

Source: BBC News

Hryvnia Drops For Third Day - Ukraine Government Weighs IMF Loan

KIEV, Ukraine -- Ukraine's hryvnia dropped for a third day against the dollar after the former Soviet republic said it may need a loan of as much as $15 billion from the International Monetary Fund.

Ukraine's 1 Hryvnia banknote
The hryvnia, which Ukraine's central bank aims to keep within a trading band 8 percent either side of 4.95 per dollar, slid as much as 1.4 percent to 5.3100 per dollar, and was at 5.2800 by 10:36 a.m. in Kiev. It has lost 2.3 percent this week.

The currency also fell against the euro, slipping 1.1 percent to 7.0892, leaving it 2.5 percent lower since Oct. 10.

The country, which had a $7.7 billion current-account deficit in the first seven months of the year, may borrow between $10 billion and $15 billion from the IMF to ``strengthen its position'' amid the seizure in debt markets, Oleksandr Savchenko, Deputy Governor of the central bank, said yesterday. They may sign an agreement as soon as next week, he added.

Ukraine's currency has slumped 13 percent versus the dollar since early September as the collapse of its governing coalition and the financial concerns reignited by Lehman Brothers Holdings Inc.'s failure deterred investors from emerging markets and nations reliant on external funding.

Source: Bloomberg

Time Running Out To Hold Early Vote On Dec. 7

KIEV, Ukraine -- Time is running out to stage on schedule a snap parliamentary election called by President Viktor Yushchenko for December, officials said on Friday. They cited delays caused by legal challenges and funding disputes.

Prime Minister Yulia Tymoshenko is against an early Parliament vote.
Yushchenko dissolved parliament and called the Dec. 7 poll after accusing Prime Minister Yulia Tymoshenko, his estranged ally from the 2004 "Orange Revolution", of destroying the governing coalition through personal ambition.

Tymoshenko opposes the election as "reckless" as an International Monetary Fund mission holds talks in Kiev to help Ukraine weather the effects of the world-wide financial crisis -- a weakened currency and possible banking instability.

Court action launched by the premier's allies has suspended all preparations for the vote and both parliament and the government have refused to provide the necessary finance.

The deputy head of the Central Election Commission said delays had made it very difficult now to meet the target date.

"All the deadlines have already been missed for getting things ready for the vote," Andriy Magera told Interfax Ukraine news agency.

The legal standing of the poll, Ukraine's third in as many years, was plunged into confusion by a series of rulings.

The Kiev appeal court initially put off until next week its examination of a bid by the president's office to overturn the earlier ruling suspending preparations for the poll.

The president then issued decrees reorganising the capital's courts and one court struck down the suspension order launched by the premier's allies. Tymoshenko denounced the move.

"It seem to me this has never happened before in any country - a leader dissolves courts which takes decisions he doesn't like," she told a news conference. "This dreadful practice ruins what is left of the legal system in the country."

Yushchenko has twice appointed Tymoshenko premier, but the two have been constantly in conflict. The coalition linked to the 2004 protests unravelled last month when the president's Our Ukraine party quit its alliance with Tymoshenko's bloc.

Tymoshenko has urged the president to allow the coalition to be restored and says she is ready to meet "any conditions" to persuade him to rescind the decree dissolving the chamber.

The president has vowed to proceed with the election regardless of the prime minister's "gimmicks".

The premier says the poll runs counter to the national interest and has refused an order by the country's top security body to provide the $85 million needed to conduct the poll.

The government, however, has approved draft amendments to the 2008 budgets allowing for election financing. But such a move would require a full-fledged sitting of parliament.

A top presidential adviser, Oleskander Shlapak, on Friday said Yushchenko was considering taking steps to allow the chamber to sit next week to resolve the row.

Source: Kyiv Post

Prime Minister Supports Prominvestbank

KIEV, Ukraine -- Prime Minister Yulia Tymoshenko said on Friday she supported the nationalisation of country's sixth-largest bank, Prominvestbank, which has spent a week in receivership after a run on its deposits.

The National Bank of Ukraine says Prominvestbank was not the victim of the global financial crisis that has felled U.S. and European banking giants. But, instead by a murky takeover bid that sparked a run on the bank.
She joins Ukraine's central bank and a presidential aide in calling for the nationalisation of Prominvestbank, although the bank itself is seeking buyers and has been approached by several foreign groups.

Tymoshenko told a news conference that the government would "do everything it needs to do. We should return this bank back to the state and the state will assume all responsibility for Prominvestbank's obligations."

Her comments -- made on the same day IMF officials met the country's leaders to discuss the possibility of credit and Fitch downgraded Ukraine's rating on concerns over its banks -- echoed those made repeatedly by the central bank.

The central bank said Prominvestbank was not the victim of the global financial crisis that has felled U.S. and European banking giants.

Both Tymoshenko and the central bank have said speculation of a murky takeover deal caused a run on the bank.

The Chief Executive and shareholder of the bank, Volodymyr Matviyenko, disagreed with nationalising Prominvestbank.

"(It) will not solve the problem of stabilising the bank's activities and increasing its capital," Matviyenko told Kommersant Ukraina daily.

He said the bank needed an investor that could inject cash to secure its stability.

"We have had some foreign offers from strategic investors -- mainly big banks which today are interested in working with Prominvest," he said.

His daughter Iryna, a shareholder also interviewed, said a mandate could be signed with a Swiss bank.

Brian Best, managing director of investment banking at Dragon Capital, confirmed his firm is working with Prominvestbank and that four or five groups have expressed interest.

"We're hoping that the central bank will allow us to start a commercial process. We've approached them, we've asked for their support, but we have been denied so far," he said.

The central bank is keen to stop depositors' panic spreading to other banks, introducing temporary measures barring early withdrawals of term deposits.

It has increased its refinancing, lending to banks 16.3 billion hryvnias ($3.3 billion) since the start of the month, more than triple the amount for September.

Source: Kyiv Post

Political Turmoil Jeopardizes Financial Relief For Ukraine

BUDAPEST, Hungary -- Aid for Ukraine’s staggering economy may be endangered by the country’s continuing political instability.

The International Monetary Fund (IMF) mission's head, Ceyla Pazarbasioglu, speaks with Ukraine's Prime Minister Yulia Tymoshenko (not pictured) in Kiev October 17, 2008.
Like Iceland and Hungary, Ukraine is seeking aid from the International Monetary Fund to counter the global financial crisis. But Ukraine, its economy reeling from falling steel prices, is also struggling with political problems.

The infighting threatens an emergency loan from the monetary fund. The fund is seeking assurances from the cabinet that next year’s budget will be balanced, but President Viktor A. Yushchenko issued a decree this month dissolving Parliament and, with it, the cabinet.

That decree, which would lead to elections on Dec. 7, is being contested by the president’s opponents in Parliament. So until the decree’s validity is decided in the courts, it is unclear whether the current cabinet holds power. The prime minister, Yulia V. Tymoshenko, says it does, while the president’s office says it does not.

In the interim, a delegation from the monetary fund has been meeting with representatives of the prime minister and the president. The fund is offering a loan of as much as $15 billion to shore up the country’s finances as foreign investors flee.

Ms. Tymoshenko, who met with the delegation on Friday, expressed support for the loan. But if the president’s order to dissolve Parliament is upheld, she said, the cabinet will lack the authority to negotiate with the fund.

In that case, negotiations will be delayed until a new Parliament is formed after the elections. After previous elections, coalition-building in Ukraine has taken months.

“Alarm bells aren’t ringing yet,” Sergei Teriokhin, a former minister of the economy and member of Parliament in Ms. Tymoshenko’s bloc, said in a telephone interview. But if the contested status of the cabinet is not resolved, he said, the monetary fund will not know whom to meet with. “It is necessary that somebody in the country make guarantees on the budget policy of next year.”

Mr. Yushchenko and Ms. Tymoshenko have alternately collaborated and competed since they rallied crowds together on Independence Square in Kiev during the protests known as the Orange Revolution in 2004. Most recently, his Our Ukraine bloc was in a coalition with Ms. Tymoshenko’s, an arrangement that gave her the prime minister’s post. But the two split after the Russian invasion of Georgia in August. Mr. Yushchenko accused Ms. Tymoshenko of muting her criticism of the Russian military action to please the Kremlin.

The political turmoil has coincided with a steep economic decline. On Friday, the international agency Fitch Ratings downgraded Ukraine’s sovereign debt rating and issued a negative outlook for the country. A Ukrainian shipping company, Industrial Carriers, has gone bankrupt. The government has frozen rail tariffs for steel companies, and as foreign investment dries up, speculators are betting on a decline in the national currency.

In response, Ukraine plans to nationalize some commercial banks, which have liquidity problems, a member of Parliament told the monetary fund’s delegation on Friday.

Hungary, which has struggled to cope with the effects of the financial crisis, also received a vote of no confidence on Friday when Fitch cut its rating to negative from stable. Hungary’s large debt, much of it in foreign currencies, has made the country particularly vulnerable to the current external shocks.

The government scaled back its growth estimates for 2009 to just 1.2 percent from 3 percent. Hungary has lined up support from the European Central Bank and the monetary fund in an effort to reassure credit and currency markets.

Source: The New York Times

Premier: IMF Ready With $14 Billion For Ukraine

KIEV, Ukraine -- Ukraine's prime minister said Thursday the International Monetary Fund is ready to lend the former Soviet republic up to $14 billion to shore up its financial system but asserted it would only happen if the president abandons plans for early parliamentary elections.

Ukraine Prime Minister Yulia Tymoshenko
An IMF delegation arrived Wednesday to provide advice to Ukrainian authorities and consider extending a loan to stabilize the country's battered banking sector and ailing currency, hit hard by the global financial crisis.

Premier Yulia Tymoshenko said Thursday the Fund was considering loaning Ukraine an amount between $3 billion and $14 billion. The wide range could not be immediately explained.

A spokeswoman at the IMF's Kiev office declined to comment. The delegation is expected to be in talks over the loan well into next week.

Worried Ukrainians continued to pull savings from banks as the government, riven by a political crisis, struggles to support the hryvna currency and investor money flees emerging markets. Orders are also falling for the country's chief export commodity, steel.

Prime Minister Yulia Tymoshenko, whose job is on the line if her ally-turned-rival President Viktor Yushchenko realizes his plans for early elections, has said spending $80 million on the vote at a time of sharp financial troubles is irresponsible.

The government, however, passed amendments in the law Thursday allowing the allocation of the money for the elections. The amendments must be approved by Parliament to pave the way for the early vote, which Yushchenko wants to schedule for Dec. 7.

But Tymoshenko remained defiant, saying her faction in Parliament will not support the law. Members of Tymoshenko's party blocked Parliament's work last week, preventing laws from being passed. She again called on Yushchenko to revive their coalition.

Now, according to Tymoshenko, if Yushchenko wants the badly needed IMF loan he will have to drop the early election plans.

"The International Monetary Fund said that it will be very difficult to hold talks with Ukraine as long as there are all these talks about early election," Tymoshenko told reporters.

In an Oct. 8 presidential decree, Yushchenko dissolved Parliament and called early elections after his coalition with Tymoshenko collapsed. Then, the prime minister pledged there would be no election and blocked preparations with a court ruling. Yushchenko is contesting that decision.

As the political tug-of-war dragged on, Tymoshenko vowed the country would weather the economic crisis.

"Ukraine's banking system is working in an absolutely stable, reliable and successful way," Tymoshenko told a Cabinet meeting Thursday, according to the Interfax news agency.

The National Bank, however, was forced to impose a set of restrictions on deposit withdrawals and lending after worried savers rushed to empty their savings accounts, stripping the banking system of more than $1.3 billion, according to government figures.

The authorities also had to rescue two key banks and battle a sharp fall in the hryvna currency as the stock market remained in a free fall.

"The crisis has already come. We are not living, we are surviving," said Proskovia Pidstrela, a 55-year-old retiree, who was among some 200 people who rallied in the center of Kiev against a rise in utilities and transportation costs. "I cannot make ends meet," she added.

Most experts remained optimistic, saying the country would avoid an all-out collapse, but that the crisis would stem growth.

"The government has urgent measures to put out the fire, but does not have a long-term strategy," said Olexandr Zholud, an analyst from the International Center for policy studies.

Meanwhile, credit rating agency Standard and Poor's put Ukraine's foreign currency and local currency sovereign ratings on credit watch with negative implications, citing a "deteriorating economic situation."

The agency also placed three Ukrainian banks - Alfa-Bank Ukraine, Kredobank and Ukrsotsbank - on credit watch negative.

The main stock exchange, the PFTS, which has lost over 70 percent this year, lost a further 5 percent Thursday.

Source: AP

New Blow To Ukraine 2012

LONDON, England -- Ukraine's co-hosting of Euro 2012 has been thrown into jeopardy, once again, by construction problems.

UEFA chief Michel Platini is concerned about Ukraine's ability to be ready for Euro 2012
The country has already come under scrutiny from UEFA officials after their preparations for the tournament were rumoured to have fallen well behind schedule.

As a result, the news that an Austrian company has pulled out of a project to build a new stadium has come at the worst possible time.

Spokeswomen Karin Keglevich confirmed on Thursday that the Austria-based company Alpine backed out of the plans after a financial dispute with the city government of Lviv, where the stadium was due to be constructed.

"We have a worldwide reputation in stadium construction and cannot accept a contract that we should build something for 40% less than what it will cost," spokesperson Karin Keglevych told PA Sport.

"We did the plan according to a contract with the Lviv government which specified a more luxurious stadium than UEFA requires. They asked for a lot of extra things.

"All the construction was organised and the government said it was a beautiful stadium (design). But they wanted all of the extras included in a price of 85 million euros ($114 million), which was also to include 20% VAT.

"It is not possible to build a stadium of a high luxury quality for this price."

Keglevych admitted Alpine was "disappointed" to withdraw from working on the venue and refused to completely close the door on future co-operation with Lviv.

"We are open for other discussions, but we cannot discuss for the same level of quality if they do not want to pay for it," she said.

"The Lviv government will get an invoice for our planning work and we hope they will pay."

The Austrian firm has been involved in a number of high-profile stadium projects across Europe, including the Allianz Arena in Munich.

UEFA have thus far insisted that no back-up plan has been drawn up should Ukraine, or Poland, fail to be ready to host the European Championship.

However, a statement released in September suggests that incompetence will not be tolerated: "Any slackening could put in doubt the organisation of this tournament in these countries," it read.

Source: Sky Sports/ESPN

Ukraine PM Says IMF Proposes Credit, Opposes Poll

KIEV, Ukraine -- The IMF may lend Ukraine a sum ranging from $3-14 billion to shore up its financial system but has made any credit contingent on calling off a snap election, Prime Minister Yulia Tymoshenko said on Thursday.

PM Yulia Tymoshenko
The IMF office in Kiev declined to comment. But the Fund, while setting financial conditions for credits, almost never takes a position on internal political issues in a country with which it negotiates an assistance programme.

Political woes in Ukraine, which faces its third parliamentary poll in as many years, have been compounded by fears that government and banks may not be able to refinance debt as its currency weakens and global lending dries up.

IMF officials arrived on Wednesday to discuss how it could help cushion the impact of the global financial crisis. It has also been approached for aid by Iceland, Hungary and Serbia.

"We have information today that the International Monetary is ready to examine special credits from $3-14 billion to stabilise the financial system," Tymoshenko told a news conference after a cabinet meeting.

"At the same time, the IMF said it finds it very difficult to talk with Ukraine amid all these proposals for an early election.

"Let me stress that in order to receive this standby credit needed to stabilise the currency and financial system, it is vital to postpone the election. The IMF also said this."

Ukraine has so far avoided direct blows to its economy from the global financial crisis, but the hryvnia currency fell when investors rushed out of emerging assets and scrambled for dollars. It hit an all-time low last week of 5.9 to the dollar.

The central bank has a difficult balancing act -- letting the hryvnia weaken under the weight of the current account gap would take away one of the few constants in a country gripped by political turbulence since the 2004 "Orange Revolution".

Propping it up would deplete hard currency reserves which now amount to the equivalent of $37.5 billion.

Authorities are also keen to calm depositors' fears after speculation of a takeover deal led to a run on Ukraine's sixth largest bank, Prominvest.

POLITICAL BATTLES

The central bank's First Deputy Chairman, Anatoly Shapovalov, said the size of the credit from the IMF would depend on Ukraine's quota subscription in the Fund.

"At the moment, we do not need these funds, but who can say how the global crisis will develop tomorrow?" he said.

Another central bank official declining to be identified said Ukraine's quota was the equivalent of $2 billion and that countries can receive 3-5 times their quota -- amounting to a total of $6-10 billion.

The rest could come from other international organisations.

Ukraine is used to political turmoil since Yushchenko came to power seeking NATO and European Union membership.

But its economy had been growing at about 7 percent annually. Now, growth is expected to slow substantially -- the IMF says to 2.5 percent next year from 6.4 percent this year.

Tymoshenko, the president's estranged ally, restated her opposition to the Dec. 7 poll, called after Yushchenko blamed her for breaking up the government and dissolved parliament.

Citing the background of the financial crisis, Tymoshenko offered to accept "any conditions" to persuade the president to call off the election. Her allies have launched court action suspending preparations for the vote.

Analysts in Ukraine saw her comments as yet another political manoeuvre in her standoff with Yushchenko.

"If Tymoshenko secures IMF support, it will be a very strong argument for the political elite, for people in the know," said Oleksander Dergachyov, an independent political analyst.

"If she doesn't get it, Yushchenko will look the guilty party. Her argument allows her to get the support of business."

Source: Guardian UK

Ukraine Finmin Starts Talks With IMF On Crisis

KIEV, Ukraine -- Ukraine's government and the International Monetary Fund were locked in talks on Thursday to agree on a package of remedies to cushion Ukraine's economy from the world financial crisis.

Ukraine's Finance Minister Viktor Pynzenyk
Finance Minister Viktor Pynzenyk had met the IMF expert mission on Thursday and the two sides "discussed the situation concerning the world financial crises and the challenges facing UKraine's financial system."

The statement added both sides agreed to produce "recommendations for Ukraine vital for the operation of the banking sector and macroeconomic stability for Ukraine, based on the experts' assessment and taking account of the experience of other European countries."

The IMF delegation arrived on Wednesday, which has joined Iceland, Hungary and Serbia in approaching the Fund for help. A central bank official said on Wednesday discussions could focus on making a standby credit facility available to Ukraine.

Ukraine is long used to political upheaval since the 2004 "Orange" Revolution brought a pro-Western governing team to power and has avoided sharp blows from the financial crisis. But analysts have expressed concern about the weakness of the hryvnia currency and the stability of the banking sector.

Prime Minister Yulia Tymoshenko, addressing a cabinet meeting, pronounced the country's banking system sound.

"I have said clearly that the government, the central bank and all state institutions are acting in a correct, logical and consistent way," she told ministers. "There are no serious signs of the world financial crisis in Ukraine in any way now."

The IMF's Kiev office made no comment on the mission, expected to remain in Ukraine for at least a week. Estimates of what the IMF may give to Ukraine vary widely from $3-15 billion. Most analysts have refrained from citing any particular figure.

Financial worries are compounded by the latest bout of political turmoil, with President Viktor Yushchenko dissolving parliament and calling a December parliamentary election.

Tymoshenko, his estranged ally from the 2004 "orange" protests opposes the election and her allies have launched court action suspending preparations for the vote.

The head of the central bank's council, Petro Poroshenko, said the Fund's mission would "calm down investors."

"This does not mean that Ukraine urgently needs these funds," Poroshenko said late on Wednesday. "This is just an additional message to investors and depositors: the situation is under control."

The hryvnia hit an all time low to 5.9 per dollar last week, and was lifted thanks only to central bank interventions.

The central bank has a difficult balancing act -- letting the hryvnia weaken under the weight of the current account gap would take away one of the few constants in a country gripped by political turbulence since the 2004 "Orange Revolution."

Propping it up would deplete its reserves of $37.5 billion.

Figures released on Thursday showed the trade deficit for goods, which has pushed the current account deficit wider, soared to $12.489 billion in the first eight months of the year from $5.939 billion in the same period last year.

Source: Guardian UK

Nation's News Media: Free Or Still Captive To Their Owners?

KIEV, Ukraine -- Self-censorship, implicit advertising and failure to cover the tough issues are just a few of the lingering ailments of media monopolization by the country’s richest.


Ukrainian oligarchs are voracious collectors. They have gobbled up state assets, acquired contemporary art and turned themselves into media barons. While all of these may be good investments, media monopolization has special value – particularly ahead of elections.

“Very few owners treat media as business in Ukraine, though it does bring profit,” said Otar Dovzhenko, deputy editor of Telekritika, a media watchdog magazine. “Instead, they force the media to serve their interests.”

Media outlets owned by a handful of Ukraine’s richest men reach roughly 80 percent of the national audience, Telekritika estimates. The upshot is that the nation’s media are diverse, though still far from free. Self-censorship, implicit advertising and failure to cover the tough issues are just a few of the lingering ailments.

“There’s less political censorship,” said Nataliya Ligacheva, Telekritika’s chief editor. “But it’s difficult to say the media are free and democratic when there is monopolization of interests in the hands of politicized corporate groups.”

Ukraine’s three richest businessmen – Victor Pinchuk, Rinat Akhmetov and Ihor Kolomoisky – are, unsurprisingly, the country’s three largest media owners.

Their outlets’ next big chance to shape public opinion will come in the run-up to the early parliamentary election that President Victor Yushchenko has called for Dec. 7.

Pinchuk, Ukraine’s second richest man and son-in-law to former President Leonid Kuchma, owns a media empire of five TV channels, including ICTV, STB, Novy Kanal, M1 and M2. Together they accounted for more than 24 percent of total viewing audiences in the first nine months of 2008, according to data from GfK Ukraine, a market research company.

Pinchuk’s portfolio also includes the Fakty i Kommentarii daily newspaper, whose declared daily print run of more than 780,000 is Ukraine’s highest.

The media holdings belonging to Rinat Akhmetov, the country’s richest man, include the Segodnya daily national newspaper. With a declared print run that tops 169,000 copies, Segodnya is one of the country’s most popular dailies.

Akhmetov has also invested heavily in the TRK Ukraina television channel that has made the transition from regional channel in Donetsk to national player with studios in Kyiv.

Ukraina has hired foreign media managers, secured broadcasting rights for national football team matches and recently recruited TV star Savik Shuster to host a nightly political talk show. The Donetsk oligarch’s bold moves are helping his station to gain ground on market leaders Inter and 1+1.

Ukraine’s third richest man, Ihor Kolomoisky, also boasts television and print media assets.

He controls a 3 percent share of Central European Media Enterprises (CME), which owns 1+1, the second most popular channel so far in 2008.

The 1+1 channel is not the only medium where Kolomoisky can potentially exercise his influence. He also with partners has interests in TET TV, Glavred magazine, UNIAN news agency, Telekritika and Profile magazines, according to media reports.

But the biggest mystery remains the real ownership of UA Inter Media Group, the largest holding in the country. The group includes Inter, the leading national channel with more than 20 percent audience share, NTN, K1, K2, Megasport, Enter Film, Enter Music TV channels, and the Ukrainian News agency.

While billionaire Valeriy Khoroshkovsky is the reported proprietor, observers name Dmytro Firtash, co-owner of RosUkrEnergo gas intermediary, as the person behind the scenes. “Obviously Firtash is involved there, but the exact extent is not known,” Dovzhenko said.

The concentration of ownership is not unique to Ukraine, but the lack of transparency is a major problem, said Marta Dyczok, an associate professor of the University of Western Ontario who specializes in Ukrainian media. “It’s a question of accountability. In the West, it’s clear who owns what.”

The primary interest in media is the enormous political influence it offers, Ligachova said, identifying a simple but effective chain: “Politicians talk to [media] owners, who influence station managers. Managers then tell journalists what to report.”

Censorship is still prevalent, but it’s not as straightforward as it used to be, she said. “They don’t ban. They pay.”

“Dzhinsa” is the industry buzz word for paid-for news. “Often a lot of money is paid for something not to be reported,” Ligachova added.

This is a vast improvement over 2004, when direct political censorship still existed under president Kuchma. His chief of staff, Viktor Medvedchuk, maintained control over the media by sending editors and journalists daily instructions called “temnyky” – orders on what news to cover and how to cover it. “In the early 90s, people were learning investigative journalism, but censorship got worse and worse under Kuchma,” Dyczok, the Canadian professor, said. She said the best journalists “either gave up or sold out.”

Most national media during the 2004 election campaign was biased against opposition candidate Victor Yushchenko. Only Channel 5, owned by his friend Petro Poroshenko (now head of the central bank’s supervisory council), offered support to Yushchenko.

But a breakthrough occurred when many journalists refused to report the fraudulent results that declared the Kuchma-backed candidate, Victor Yanukovych, the winner. The subsequent protests that started the Orange Revolution also marked a turning point in Ukraine’s media history.

“Political censorship disappeared overnight,” Dyczok said. “Speech became more or less free.”

But not for long, journalists add.

“During the recent Kyiv mayoral elections, politicians bought media loyalty wholesale,” said Yegor Sobolev, an independent journalist. “And there is no one to resist this [political money]. Media owners and managers usually stand for it, while journalists don’t find the will and conscience to unite and stand up against it.”

Sobolev said large media owners do not spend too much time worrying about the reputations of their media assets, when their financial wellbeing depends on business and political interests.

Such factors as viewer trust and quality of product pale in comparison, said Sobolev, who quit Channel 5 last spring, citing lack of freedom.

Protection and promotion of corporate interests are centerpieces of the agenda, agreed Dyczok. “Advertising is hidden in news reports. For example, a bank can be advertised through interviews and made to look like a news story. It can be subtle.”

Reporting is often tailored to the interests of a media owners’ support base, Ligachova said.

“There is certain pluralism, but there is a difference in emphasis.” And the differences in emphases are often clear.

Akhmetov’s Segodnya, for example, promotes an anti-NATO, pro-Russian agenda that is popular in the Donetsk region, where his business empire is primarily based. A report about NATO in March ironically called Yushchenko “that great geo-politician of modernity.” When NATO declined to grant Ukraine a membership action plan in April, the chief editor wrote a blog mockingly titled, “Well, sonny, did your NATO help you?”

But an alternative view on NATO was available because Pinchuk’s STB channel took a more positive view of the summit in April. One report reiterated: “It’s not a refusal. Ukraine will be in NATO.”

There are signs of improvement. Huge potential advertising revenues are forcing more businesslike approaches. The All-Ukrainian Advertising Coalition estimated the total investment in media advertising for 2007 at slightly more than $1 billion, a 25 percent increase from the previous year.

Dyczok said that market forces are starting to drive the sector, although the influence of owners remains strong.

Ukrainian reporters, speaking on condition of anonymity, confessed to practicing self-censorship. One journalist admitted refraining from interviewing anyone “who might say something negative on a subject you’re not supposed to write anything negative about.”

Another journalist, from Glavred Media holding, said: “There have been cases when some journalists offended owners, so then the stories were edited or not published, but journalists were not fired.”

Market forces can also lead to the tabloidization of news by sacrificing serious analysis for sensational reporting.

“There’s not one television channel where you can find out what is actually going on. And there are only a few good newspapers,” Ligachova, the Telekritika chief editor, complained.

But Ukraine is not alone in this respect. “The sensationalization of news is happening everywhere,” Canada’s Dyczok said. “There’s a focus on style over substance.”

Source: Kyiv Post

Ukraine Opposition Party Raises Funds To Free Captive Crew

KIEV, Ukraine -- A Ukrainian opposition party said on Wednesday it had started a fundraising campaign to raise the $8 million ransom demanded by Somali pirates for the release of the MK Faina vessel and its crew.

Pirates leave the merchant vessel MV Faina (not shown) for the Somali shore, while under observation by a U.S. Navy ship.
The Faina, carrying at least 33 tanks and other heavy weaponry, was seized by Somali pirates on September 25.

The pirates are also holding hostage 17 Ukrainian nationals, two Russians, and one Lithuanian.

The fund-raising campaign was launched by the Party of Regions, led by Russia-friendly Viktor Yanukovych.

A high-ranking Ukrainian official has said that President Viktor Yushchenko is closely monitoring the situation around the Faina.

Family members of the captive Ukrainians gathered outside the offices of the Ukrainian president on Monday, demanding an audience with Yushchenko.

The ship's captain, Russian Vladimir Kolobkov, died of a heart attack shortly after the ship was seized.

The Faina is currently surrounded by six U.S. warships.

Source: RIA Novosti

Yushchenko's Big Mistake

KIEV, Ukraine -- For the president, removing Yulia Tymoshenko from office is far more important than responding to the global economic and financial tsunami that will hit Ukraine.

Viktor Yushchenko
Ukraine could have easily avoided a second pre-term election in two years. Zerkalo Nedeli’s editor Yulia Mostovaya recently explained the reason why the president was so insistent on an election rather than a new coalition: “It is the only sure way to get rid of Yulia Tymoshenko as prime minister. Frankly speaking, that is what all the fuss is really about.”

For the president, removing his former Orange Revolution ally from office is more important than responding to the global economic and financial tsunami that will hit Ukraine. It is more important than NATO membership (for which political stability is paramount). Last, but not least, the objective ignores Tymoshenko’s popularity (which is six times that of the president’s) and the lack of public support for a third election in three years.

The conflict between Tymoshenko and Victor Yushchenko is not ideological. It has nothing to do with different attitudes to the Georgian crisis and is not because of her alleged “treason.” Yushchenko has, of late, frothed at the mouth in his dislike for her and, in the process, has dragged Ukraine’s image to a low level. The president’s attacks on Tymoshenko inside and especially outside Ukraine have, in Mostovaya’s eyes, “not spared our self esteem, dignity and international reputation.”

A larger Orange coalition could have easily been established during the 30-day deadline permitted by the Constitution. It would have had 248 deputies and therefore possessed a stable majority. All deputies in the Tymoshenko and Volodymyr Lytvyn blocs had signed up to the larger coalition, as had 34 out of 72 Our Ukraine-Peoples Self Defense (OU-PSD) deputies. The remaining OU-PSD 38 deputies had been cajoled, bribed or both to stay away. Only 39 (out of 72) deputies had initially voted for OU-PSD to withdraw from the Orange coalition on Sept. 3, a slim majority of two obtained after intense lobbying and threats.

The president and his secretariat blocked the formation of the enlarged Orange coalition. They controlled up to 50 percent of OU-PSD deputies. Vyacheslav Kyrylenko, head of the faction and leader of one of its nine parties, the pro-presidential Peoples Union-Our Ukraine, became a willing stooge of the president’s strategy.

The day before the president disbanded parliament, he met with the OU-PSD faction. Instead of initiating a dialogue in an attempt to save the Orange coalition at all costs, the president, according to those present, gave a 20-minute monologue on how a coalition with the Tymoshenko bloc was impossible. He then got up and left the room.

Yushchenko refused to permit a vote to be held, as some deputies called for, to see where majority sentiment lay. Yushchenko insulted those deputies who supported a new Orange coalition as being without “parents and ancestors.”

Under the 2006 Constitution, the only manner in which Tymoshenko can be removed is by the creation of a new coalition. The previous 1996-2005 Constitution gave the president the right to dismiss the government, which he used in September 2005, when he removed Tymoshenko. This is a step that divided the Orange forces for the next 18 months.

Yushchenko could also have supported an alternative coalition, rather than pre-term elections, but that would have forced an untenable alliance with the Party of Regions.

What then is the president’s strategy?

Incredibly, he has been convinced that five pro-Yushchenko forces (Peoples Union-Our Ukraine, Viktor Baloha’s United Center, Kyiv Mayor Leonid Chernovetskiy’s bloc, and the new Arseniy Yatseniuk and Raisa Bohatyriova parties) will succeed in obtaining 5 percent each, thereby together obtaining a similar result to Our Ukraine in 2002, when it won 24 percent. Yushchenko has agreed to include his name on the Peoples Union-Our Ukraine bloc, hoping to repeat his 2002 victory when Our Ukraine came first.

This strategy assumes that a sizeable number of pro-Yushchenko deputies will want to establish a grand coalition with the Party of Regions. Yushchenko will demand that the grand coalition support his technocratic candidate for prime minister, Defense Minister Yuriy Yekhanurov or parliamentary speaker Yatsenyuk, and Yushchenko’s candidacy in the January 2010 presidential elections.

There are two paradoxes. Firstly, Yushchenko has pushed for pre-term elections “so long and hard, he is the least of all prepared for it,” Mostovaya believes. Pro-presidential forces are a motley crew. Secondly, the strategy’s assumption that five political forces would each win 5 percent is whistling in the wind. Two of the five are not even created. The strategy of entering a grand coalition relies on double standards, treats Ukrainians as idiots and is full of contradictions. In aligning with the Regions, Yushchenko’s re-election bid would destroy his support in western and central Ukraine. Also, it assumes that the Regions can cajole its voters to back Yushchenko, somebody they have always detested.

Thirdly, the strategy assumes pro-presidential political forces will retain their 2006 and 2007 result of 14 percent or improve them to 25 percent in a pre-term election.

Fourthly, it assumes that all pro-presidential forces will support a grand coalition. Kyrylenko, who heads the party of which the president is honorary chairman, repeatedly stated that his political force would never join a coalition with the Regions. Meanwhile, Yushchenko supports such a coalition.

Fifthly, the strategy fails to take into account that the only two political forces that are likely to improve their support are the Tymoshenko bloc and the Party of Regions, that could then establish their own coalitions and marginalize the president. The most dangerous threat could come from the Party of Regions joining the Lytvyn bloc and the Communists to create another “anti-crisis” coalition with Yanukovych as prime minister. In the disbanded parliament, these three forces are only four deputies short of a coalition (222), a handicap that could be easily overcome if any of the three improve their performance in pre-term elections.

The president’s strategy will undermine Ukraine’s ability to weather the global economic and financial crisis, and derail Ukraine’s path to NATO. It will fail and backfire. The president’s preference for elections over compromise will finish any ambitions that Yushchenko has for a second term.

Tymoshenko was the key to Yushchenko's victory in the Orange Revolution. It is now too late for him to reach this conclusion, one that most in Ukraine have long understood.

Source: Kyiv Post

Worried Ukrainians Pull Money Out Of Banks

KIEV, Ukraine -- Worried Ukrainians pulled money from banks Oct. 15 as the government headed into talks with an International Monetary Fund delegation about getting help with the country's financial troubles.

Bank analysts say the country should weather the crisis, but some Ukrainians were not waiting to see how it turns out and rushed to empty their accounts.
The government, which must also deal with a political crisis, is struggling to support the hryvna currency in the face of the world financial meltdown, as investor money flees emerging markets and orders fall for the country's chief export commodity, steel.

Bank analysts say the country should weather the crisis, but some Ukrainians were not waiting to see how it turns out and rushed to empty their accounts. Many people lost their life savings in the 1991 collapse of the Soviet Union, of which now-independent Ukraine was once part.

"There were these rumors and I decided not to wait," said Lyudmila Kudinova, 49, who withdrew 10,000 hryvna from her account at a downtown office of the Khreshchatyk bank Wednesday and immediately converted it into US$2,000 in U.S. currency. "There is one crisis after another."

A survey of several ATMs and bank offices in downtown Kiev found no scenes of panic or long lines. Ukraine's two most troubled banks, Prominvest and Nadra, have imposed restrictions on withdrawals.

Prominvest, which has been taken over by the government, and Nadra, which has survived thanks to a government loan, have limited ATM withdrawals to US$200, according to customers and bank officials.

Several Nadra ATMs had no cash in them Oct. 15. "Of course I am worried," said Svetlana, who declined to give her last name. She tried to withdraw 5,000 hryvna (US$1,000) from an ATM at Raiffeisen Bank Aval in the center of the capital, but was limited to just 1,000 hryvna (US$200).

Worried savers have taken out some US$1.3 billion dollars since the beginning of the month but emergency measures from the central bank appear to have slowed the withdrawals.

Serhiy Kruglik, head of the foreign relations department on the central bank, said the IMF delegation will meet with government representatives, review the measures Ukraine has taken so far and consider extending a loan.

"The financial crisis has shaken the whole world and we are no exception," Kruglik told The Associated Press. "But we have an additional problem: a political crisis."

He said the size of any loan would be decided only after consultations with the IMF delegation.

The IMF's mission follows the central bank's freeze of selected retail accounts across the country, limits on loans and measures to stabilize the hryvna. The government has also taken steps to support the country's core steel and chemical industry.

Government efforts to battle the crisis have been complicated by a deepening political crisis, as Prime Minister Yulia Tymoshenko defied President Viktor Yushchenko's order to call early parliamentary elections.

Tymoshenko is fighting to stay in power and avoid a third parliamentary vote in as many years.

The central bank continued its struggle to stabilize the hryvna Wednesday, after the currency fell some 20 percent last week. The government intervened and the hryvna recovered some of its losses, but was still down some 12 percent from September.

Raiffeisen Bank Aval said in a statement Oct. 15 that it had received a US$180 million loan from its Vienna-based parent, Raiffeisen Centralbank Osterreich.

Financial analysts said the banking restrictions were temporary and predicted the country would pull thorough the crisis as the central bank's emergency measures took effect.

"I think the banking system will survive and will emerge not in a bad condition compared to some other countries," said Oleg Pronin of Dragon Capital Investment Bank.

The Ukrainian stock exchange, which has plunged some 75 percent over the past year, was mixed on early trading Wednesday after closing with a minuscule 0.8 percent gain Oct. 14.

Source: Kyiv Post

Ukraine, Other Small Nations Face Crisis Alone

KIEV, Ukraine -- While the world's economic giants may have averted financial collapse through rescue plans and huge infusions of cash, some smaller countries like Ukraine seem to have stumbled with little help on the horizon.

This week's Korrespondent shows a one-hryvna bank note going up in flames.
Among the most vulnerable states, it seems, are some of the young democracies born after the fall of the Soviet empire, which have seen their economies race ahead under democratic rule and capitalism — only to run smack into a global financial crisis.

Facing bank failures, turbulent markets and rapid inflation, Ukraine's politically fractured government imposed a series of emergency measures this week to shore up the economy.

At a news conference Tuesday, Prime Minister Yulia Tymoshenko dodged the question of whether Ukraine was seeking help from the International Monetary Fund, which would confirm fears about the state of Ukraine's economy. Instead, she offered broad assurances that there was no need for panic.

"The Ukrainian government is doing everything possible and impossible so that the impact of the global crisis on Ukrainian life, the Ukrainian economy is minimized," Tymoshenko said.

While the world's major economies snap up banks and bail out brokers, many modest-sized countries don't have such deep pockets.

Hungary's currency has skidded 20 percent. Stocks have fallen in Poland. In Estonia, real estate prices have dropped 40 percent.

Iceland, where stocks fell almost 70 percent Tuesday before rebounding, is trying to negotiate a $5.5 billion loan from Russia.

Ukraine, which has been locked in a political struggle with Moscow since it elected a pro-Western government in 2004, certainly can't go begging to the Kremlin.

Ukraine's inflation rate hit 31 percent in May compared with the same month the previous year, higher than any other country except Zimbabwe and Venezuela. The government scrambled and brought it down to a somewhat less shocking 16 percent rate as of September.

Faced with global economic uncertainty, depositors in Ukraine began frantically converting their local currency into dollars after the hryvna (pronounced HRIV-nyah') dipped by almost 20 percent, before clawing back some lost ground.

Analysts said the fall was due to investors pulling money out of Ukraine and many other emerging markets. The rate plunge stripped the banking system of $1.3 billion in the first two weeks of October.

Some analysts say that the so-called emerging markets of the world's vibrant young capitalist economies will bounce back quickly, because many are still shaking off the effects of decades of totalitarian rule.

Even so, many seem destined to ride an economic roller coaster in the short term, as real estate bubbles burst, banks go bust and consumer spending tanks.

Anders Aslund, an economic analyst, wrote in July that Ukraine's economic plight was not as bad as that of Russia in 1998, which plunged the country into a deep, prolonged recession.

Ukraine's state budget, he pointed out, had a healthy surplus, its public foreign debt was small and its national bank was flush with foreign currency reserves worth $36 billion.

But he still saw Ukraine facing "catastrophic" consequences if it failed to get inflation under control — and predicted that real estate prices could fall by half, while half of all banks might go bankrupt.

The country's two leading magazines came out with nearly identical covers this week — Korrespondent showing a one-hryvna bank note going up in flames, and Focus displaying a one-hryvna coin melting down.

"Money is melting," warned Focus. "Hello crisis," Korrespondent announced.

Tymoshenko announced Tuesday that the government was freezing transportation costs, lowering natural gas prices and planning to cap electricity costs for the steel and chemical industries, an effort to boost the core sectors of the national economy.

The government's measures follow a central bank freeze of selected retail accounts across the country, limits on loans and other measures to stabilize the currency. "It looks like the National Bank is in control of the situation," said Volodymyr Dinul, an analyst with Renaissance Capital. "Let us hope that everything will calm down sooner rather than later."

One key to the financial problems in Ukraine, experts say, is a falling demand for steel, the country's key export commodity. Another factor is Ukrainians' mistrust of banks, founded on their painful experience with the hyperinflation following the 1991 collapse of the Soviet Union, which wiped out their savings.

Tymoshenko's government sought to compensate some of the losses from that long-ago crisis this year, but that proposal was stalled by her political feud with President Viktor Yushchenko.

One of the triggers for the current crisis was the trouble at two major banks, the sixth-largest Prominvest, which has been taken over by the central bank, and the seventh-largest Nadra, which has survived thanks to a $300 million central bank loan.

Fitch Ratings, a global credit rating agency, on Monday downgraded Nadra and noted that Ukrainian banks faced "challenging times" as near-term risks increased considerably.

Ukraine's main stock index, PFTS, closed with a minuscule 0.8 percent gain Tuesday, following the positive global trend and reacting to the government efforts. The stock market has lost nearly 70 percent since the beginning of this year, after a record 130 percent rise in 2007.

Independent financial analyst Geoff Smith said an aid package adopted by the G-7 leaders bodes well for Ukrainian banks, since European banks had stakes in nearly half of local banks.

"After the G-7 rescue plan, I am cautiously optimistic the Ukrainian banking system will in general withstand the crisis," said Smith.

Others remained concerned, saying the central bank's drastic measures showed the banking sector was in deep trouble.

The crisis has been aggravated by Ukraine's political deadlock, and the current crisis over control of parliament. That crisis deepened Tuesday, after Tymoshenko refused to heed Yushchenko's order and release government money to pay for early parliamentary elections he called for Dec. 7.

Tymoshenko, seen as Yushchenko's rival in the 2010 presidential vote, is battling to retain her office and avoid a third parliamentary ballot in three years. Yushchenko is determined to push through with the election and has abolished a court that froze election preparations.

Source: AP

IMF Sending Team To Ukraine After Request For Help

WASHINGTON, DC -- The International Monetary Fund is sending a team to economically stressed Ukraine to after the former Soviet republic asked for help.


Facing bank failures, turbulent markets and rapid inflation, Ukraine's politically fractured government imposed a series of emergency measures this week to shore up the economy.

At a news conference Tuesday, Prime Minister Yulia Tymoshenko dodged the question of whether Ukraine was seeking IMF help, which would confirm fears about the state of Ukraine's economy.

Instead, she offered broad assurances that there was no need for panic.

But an IMF official, who was not authorized to speak on the record and requested anonymity, confirmed that the lending organization is sending a mission Wednesday to discuss economic policies.

Faced with global economic uncertainty, depositors in Ukraine began frantically converting their currency into US dollars after the hryvna dipped by almost 20 percent.

It has since clawed back some lost ground.

The crisis has been aggravated by Ukraine's political deadlock and the current crisis over control of parliament.

That crisis deepened Tuesday, after Tymoshenko refused to heed President Viktor Yushchenko's order to release government money to pay for early parliamentary elections he called for Dec. 7.

Tymoshenko, seen as Yushchenko's rival in the 2010 presidential vote, is battling to retain her office and avoid a third parliamentary ballot in three years.

Yushchenko is determined to push through with the election and has abolished a court that froze election preparations.

Source: International Herald Tribune

Ukraine PM: Country Can't Afford Early Elections

KIEV, Ukraine -- Ukraine's prime minister said Tuesday the country cannot afford an early election in the face of a battered stock market, one of the world's highest inflation rates and massive bank withdrawals by depositors spooked by the growing political and financial instability.

People pass by an exchange unit in Kiev, Ukraine, Tuesday, Oct. 14, 2008. Ukrainian authorities battled on Tuesday a growing financial crisis, following the withdrawal of savings from banks by depositors spooked by the falling national currency, a battered stock market and political uncertainty.
Ukraine's central bank took emergency measures Monday to limit bank lending and restrict withdrawals from some accounts as the government tried to avert a large-scale panic that could lead depositors to pull even money out of their accounts.

Prime Minister Yulia Tymoshenko used the quickly escalating financial crisis as ammunition in her power struggle against President Viktor Yushchenko's push for early parliamentary elections. The fighting shattered their pro-Western alliance last month.

"We are categorically against destabilizing the situation with the early election and that is why we think the president's decree should be canceled," Tymoshenko said Tuesday. "When every kopiyka is needed to counter the global financial crisis, spending half a billion hrvyna for the early elections adventure is a direct action against national interests," she added, referring to the Ukrainian currency.

The deepening financial problems are compounding a political crisis that threatens to destabilize the pro-Western former Soviet republic at a time when it is confronting a resurgent Russia.

Russia's August war with Georgia — another pro-Western former Soviet republic — exacerbated tensions with the West and caused concern in Ukraine.

The two Ukrainian leaders' alliance fell apart last month after Tymoshenko sided with the opposition in adopting a law trimming presidential powers. They also differed in their reactions to the Russia-Georgia war.

Yushchenko accused Tymoshenko of betraying efforts to join NATO and selling out to the Kremlin by failing to condemn the war. Tymoshenko says she opposed the war, but wants a partnership with Russia.

Depositors frightened by the political and economic uncertainty have made large-scale withdrawals of savings from banks in the past two weeks.

On Monday, the central bank had to rescue two major banks after there was a run on them earlier this month. One central bank official said Ukrainians withdrew as much as $1.3 billion from their accounts, or 2.7 percent of all bank deposits that have a maturity date, so far this month. But other analysts say the figure could be as high as 4.0 percent.

Authorities also took measures to shore up the weakening national currency, the hryvna (Pronounced HRIV-nyah'), which has fallen 12 percent in recent weeks.

Stocks have plummeted some 30 percent over the past month as investors fled emerging markets amid the world financial crisis. Many steel mills — the backbone of the country's fragile economy — have had to halt or slow production because of a lack of global demand.

Ukrainian inflation as of September was among the highest in the world — 25 percent year-over-year.

On Tuesday, the government sought to bolster the shaky economy by lowering transport and other costs for the key steel and chemical industries, where output fell along with global demand, Tymoshenko said.

Tymoshenko and Yushchenko, the two leaders of the 2004 Orange Revolution, have turned into fierce rivals and their fight over whether elections will be held on Dec. 7 has now turned to the courts.

Yushchenko dissolved parliament and called early elections after his coalition with Tymoshenko collapsed. But the prime minister pledged there would be no election and appealed to a Kiev court to block preparations.

"The Ukrainian government is doing everything possible and impossible so that the impact of the global crisis on the Ukrainian life, the Ukrainian economy is minimized," Tymoshenko told reporters Tuesday.

Tymoshenko, seen as Yushchenko's rival in the 2010 presidential vote, is battling to retain her office and avoid the third vote in three years. Yushchenko is determined to push through with the election and has abolished a court that froze election preparations on Tymoshenko's request.

The vote would be the third parliamentary election in as many years, and experts say it will only exacerbate the country's economic and political problems.

Source: AP

Ukrainian PM Refuses To Release Funds For Snap Elections

KIEV, Ukraine -- Ukrainian Prime Minister Yulia Tymoshenko has refused to allocate some 420 million hryvnias ($80 million) to finance early parliamentary elections, Ukraine's UNIAN news agency reported on Tuesday.

Yulia Tymoshenko
Ukraine's top security body, the National Security and Defense Council, demanded that the government transfer the money to election officials on Monday. However, no cabinet session was held and no money has been transferred.

A top official from Ukraine's Central Election Committee was cited by the agency as saying that the country's top election body "cannot carry out the elections" if the money is not provided.

On Monday, a presidential decree ordered the government to allocate the money for the elections from the country's reserve fund. Tymoshenko has called an emergency cabinet session for Tuesday. The session will start at noon (09:00 GMT).

President Viktor Yushchenko ordered last Thursday the dissolution of parliament and called snap parliamentary polls for December 7. The move followed the collapse of the ruling pro-Western coalition. Yushchenko blamed the collapse of the ruling alliance on his former ally, Tymoshenko, saying that she had put "personal interests over national ones."

The country's pro-Western ruling coalition collapsed on September 3 when the pro-presidential Our Ukraine withdrew from the alliance after Tymoshenko's bloc joined with the opposition Party of Regions, led by Russia-friendly Viktor Yanukovych, to approve legislation substantially cutting presidential powers. Yushchenko called the move a "constitutional coup."

However, the presidential decree to dissolve parliament and call early polls was overturned on Saturday by the Kiev District Court, which ruled in favor of a lawsuit filed by the Yulia Tymoshenko Bloc against the president and the Central Election Commission.

In response, Yushchenko signed a decree late on Monday abolishing the court, replacing it with two administrative courts.

Source: RIA Novosti

Bond Girl Rises From Humble Soviet Childhood

BERDYANSK, Ukraine -- Olga Kurylenko, the model and actress who stars in the upcoming James Bond movie, began acting by playing Santa Claus' young wife in a school play in her Ukrainian hometown.

Ukrainian model and actress Olga Kurylenko
Teachers remember Kurylenko, the 28-year-old brunette who charms 007 in "Quantum of Solace," for the determination, drive and luck that turned her into a Bond Girl.

"She was such a talented girl," said her hometown piano teacher, Halina Kulchitska. "Even if she hadn't become James Bond's girl, she still would have gotten some big role."

Kurylenko grew up in this city of 140,000 on the Azov Sea in southeastern Ukraine, where monuments made from giant metal anchors dot the city center and middle-aged men spend their free time fishing along the main embankment, cigarettes in their mouths.

Raised by her mother, Marina, an art teacher, and her grandmother, a doctor, Kurylenko and her family lived in a three-room apartment not far from the city center. That was a luxury by Soviet standards, when many lived in communal flats, sharing the kitchen and bathroom with several families.

Today her crumbling five-story apartment building, where carpets, comforters and underpants are hung to dry in the courtyard and children play on rusting slides, is testimony to how far she's traveled since then.

In Moscow on Monday to promote the film, Kurylenko expressed incredulity over being a Bond Girl. "I still don't believe it and don't think that I realize it yet," she told Associated Press Television News.

In the movie, Bond (Daniel Craig) and Kurylenko's character, Camille, try to save Bolivia's water supplies.

"Camille is quite a strong woman, very independent. She carries a wound which comes from her childhood," said Kurylenko. "There is something very terrible that happened to her when she was a little girl and everything she focuses on is revenge connected to this event and that is her motivation in the movie."

Kurylenko's star began to rise at 16 when she was spotted by a model scout in the subway in Moscow, where she was on vacation. She moved to Paris to work in a modeling agency, then began a career as an actress.

Kurylenko's drama teacher, Ina Kaminska, said her student simply got lucky.

"It's all great, just great, we are all very happy she became a Cinderella but nevertheless when she was in my class I didn't see that kind of future for her," the 70-year-old Kaminska said.

Kurylenko got one of her first main roles after she joined the school drama class in the seventh grade, playing the young wife of Grandfather Frost, the local equivalent of Santa Claus.

After she was cast for the new Bond movie, Kurylenko's school was besieged by journalists and abuzz with all things related to her. Teachers even put her photos as a model and actress prominently on display at the school, but they were later taken down after parents of younger students complained the pictures were too revealing.

Artur Shevchenko, 16, who goes to the same school as Kuylenko did, said he has a crush on the actress.

"I've seen her photos online they are not bad at all," he said with a laugh. "The girl is quite sexy I think she will be OK for Bond. I think of all his girlfriends she will be one of the best. ... As for me, I wouldn't mind being Bond myself."

Source: Kyiv Post

Regulators Limit Bank Loans, Restrict Withdrawal As Ukrainian Banking System Staggers

KIEV, Ukraine -- Ukraine's central bank on Monday limited some bank loans and restricted withdrawals from retail accounts as the government tried to stem growing doubts among citizens about the country's staggering banking sector.

Ukrainian National Bank
The National Bank is prohibiting withdrawals of bank deposits before a maturity rate set by individual contracts and has imposed limits on loaning money, it said in a statement.

It also imposed a 5 percent price corridor for selling and buying foreign currency at exchange offices throughout the country in order to shore up the battered hryvna, which has fallen nearly 20 percent in recent weeks.

Analysts hailed the moves, but said it demonstrated the banking sector was in bad shape.

"This measure is aimed at stopping panic among depositors," said Yevehn Hrebenyuk, a stock market analyst with Troika Dialogue Ukraine.

The Ukrainian economy, already shaken by the world financial crisis, was battered further last week when President Viktor Yushchenko dissolved parliament and called an early vote for Dec. 7 in his battle for power with Prime Minister Yulia Tymoshenko.

The vote would be the third parliamentary election in as many years, and experts say it will only exacerbate the country's economic and political problems.

Stocks have plummeted some 30 percent over the past month as investors fled emerging markets. Many steel mills -- the backbone of the country's fragile economy -- have had to halt or slow production because of a lack of global demand.

The National Bank has had to come to the rescue of two major banks to avert a crisis. That prompted many Ukrainians to withdraw as much as $3 billion since the beginning of the month, according to the Ukrainian newspaper Kommersant.

The National Bank declined to comment on the figure.

Hrebenyuk also would not discuss the figure provided by Kommersant, saying no such numbers have been made public, but he said that sector was still under control.

"There is no mass runs on banks in Ukraine," Hrebenyuk said. "I think it (the banking sector) will contract in some way, but I don't think there will be a collapse."

There have been no reports of mass runs on banks in recent weeks, though lines have popped up at several institutions around the country, including Nadra and Prominvest, as spooked depositors try to withdraw their money.

On Monday, some 15 people lined up at a Nadra banking outlet in downtown Kiev -- some to withdraw money, others to pay out loans or borrow money, but otherwise, no large lines of panicked depositors were visible.

The Renaissance Capital investment bank said in a note to investors that the restrictions will give Ukrainian banks more time to mange liquidity positions in the short-run. But it also warned that such measures could undermine growth in the long run.

Hrebenyuk cautioned that the fact that the National Bank's measure had no timeframe showed the crisis may last a while.

"It means that at the National Bank they themselves don't know when this will end," he said.

Yushchenko met with key government leaders Monday and again ordered them to work out an action plan to tackle the crisis.

Source: AP

Troops Fail To Take Back Hijacked Ship

MOGADISHU, Somalia -- Somali forces raided one of the many ships hijacked off the country's coast as a deadline loomed in a standoff aboard another, arms-laden vessel.


Troops in northern Somalia's semi-autonomous Puntland region on Sunday unsuccessfully tried to take back a ship that was hijacked by pirates on Thursday, said Ali Abdi Aware, Puntland's foreign minister. He said two pirates were killed.

The vessel, which was carrying cement, is believed to have Syrian and Somali crew on board.

"Our forces are chasing the ship and we hope to rescue it," Aware said in a phone interview from Puntland, a hotbed of piracy.

Pirates on the Ukrainian MV Faina, which is carrying 33 tanks and other heavy weapons, continued to demand ransom money before releasing the ship and its 20 crew.

The pirates have threatened to destroy the vessel tonight or early tomorrow unless the ship's owners pay a ransom of up to $20-million (R187-million). They have held the ship for more than two weeks.

Sugule Ali, a spokesperson for the pirates, said negotiations with the shipping company were continuing. Regarding the ransom, he said: "It is before Tuesday or never."

Pirates have seized more than two dozen ships this year off the Horn of Africa, but the Faina has drawn the most international attention because of its dangerous cargo. Many fear the weapons on board could end up in the hands of Islamic militants in Somalia.

The ship's operator, Tomex Corporation in Odessa, Ukraine, has not yet commented on the negotiations.

The threat by the pirates on the Faina was unusual. Pirates operating off Somalia rarely harm their hostages, instead holding out for a ransom that often exceeds $1-million.

But international pressure on the pirates is growing. Nato said on Thursday it would send seven ships to the treacherous waters where pirates are negotiating the release of the Faina. US warships are surrounding the ship, and a Russian vessel is on the way too.

There are 20 Ukrainian, Latvian and Russian crew members on board.

The ship's Russian captain died of a heart condition soon after the hijacking occurred nearly two weeks ago, officials in Moscow say.

Lieutenant Stephanie Murdock, a spokesperson for the US's 5th Fleet, which helps to monitor Somalia's coast, said there were no significant developments on Sunday.

Source: AP

Alleged Elita Center Fraudster Extradited To Ukraine

KIEV, Ukraine -- Alexander Volkonsky, the alleged mastermind of the Elita Center scam, was extradited from Switzerland and arrived in Kyiv on 9 Oct, according to the State Prosecutors Office.


The 37 year-old Russian, who assumed the name Shahov while living in Switzerland, is accused of defrauding nearly 1,500 investors of over $80 million.

He is expected to be handed over to SIZO, Kyiv’s pre-trial detention facility.

No trial date has been set.

The Elita Center scam victims have not received any compensation from the city since the fraud was uncovered in 2006.

Mayor Leonid Chernovetskiy said he was only planning to compensate the loss of money and properties to selected few who could not afford a new home, but fraud victims challenged his decision in court.

Source: Kyiv Post

Vitali Klitschko Stops Peter To Reclaim WBC Title

BERLIN, Germany -- Vitali Klitschko reclaimed the World Boxing Council belt and fulfilled a self-proclaimed dream to hold a heavyweight title at the same time as his brother, stopping Samuel Peter with a technical knockout Saturday night.

Vitali Klitschko from Ukraine, center, celebrates after winning a WBC heavyweight boxing world championship fight against Samuel Peter from Nigeria in Berlin, Germany, Saturday, Oct. 11, 2008.
Peter chose not to come back out after eight rounds that saw him weaving and occasionally wobbling as Klitschko landed a persistent stream of heavy left jabs to Peter's head in front of more than 12,000 people at the new O2 World Arena.

The 37-year-old Ukranian fighter (36-2, 35 KOs) used his height — he's 6-foot-7 — and reach to keep Peter crouched and defensive.

Volodymyr Klitschko, widely considered the most talented among the chaotic field of so-called heavyweight champions, holds the International Boxing Federation, International Boxing Organization and World Boxing Organization heavyweight belts — and dealt Peter his only previous loss, in September 2005 in a 12-round unanimous decision.

Peter, a 28-year-old Nigerian-born fighter, kept a tight defensive stance and managed to plant a series of solid body shots on his towering opponent. But after eight rounds he hadn't worked consistently inside Klitschko's massive reach.

Klitschko told reporters after the fight that he wouldn't have needed much longer to deliver on a promise to end the fight by knockout.

"If Samuel Peter didn't stop the fight, I have the feeling in the next two rounds, I would have knocked him out," Klitschko said. "He got more and more punches, and his chin (was) not so strong as the first rounds."

Klitschko has been WBC "champion emeritus" since a knee injury forced him to withdraw from a fight and retire from boxing in 2005.

The honorary status gave him the right to fight Peter (30-2), who won the interim belt in a fight against Jameel McCline last September, whenever Klitschko chose to come out of retirement.

"I knew if I lost the fight I wouldn't get a second chance," Klitschko told reporters after the fight. "It was a one-way ticket, and I used my chance."

Klitschko is a three-time champion who won the WBC title in 2004 with an eight-round victory over Corrie Sanders. The Peter fight was Klitschko's first since he defended the crown with an eighth-round win over Danny Williams in Las Vegas in 2004.

Klitschko's performances as a powerful puncher have often been overshadowed by injury. In 2005, he withdrew from a WBC title fight with Hasim Rahman because of a torn ligament in his right knee. The injury led him to announce his retirement, and the WBC made him "champion emeritus." Last fall, he announced a comeback fight against Jameel McCline, only to back out after hurting his back and undergoing emergency surgery.

Promoter Don King said after the fight that a logical next step for Klitschko might be to seek a rematch with the retired Lennox Lewis, whom Klitschko lost to in 2003 when a fight doctor called the bout because Klitschko had a badly cut eye.

"What a triumph that would be for us old guys," King said. Klitschko was more reticent.

"I need to think about it," he said of plans for his newly revived fighting career. "I need to take care of my hand, because it is swollen."

Klitschko seemed more willing to joke about a hypothetical matchup with his brother — which both have said is out of the question.

"You know what? I like this belt very much," he quipped as he picked up one of the three title belts Volodymyr had brought with him to the press conference, where he sat beside Vitali.

"Watch yourself now, brother," Volodymyr shot back.

Peter declined to attend the post-fight press conference, but his manager Ivaylo Gotzev said the loss put Peter on "the comeback trail."

"We've been here before, and we're going to go back and look at the tape and see what we need to work on," Gotzev said.

In an undercard fight, heavyweight Odlanier Solis improved to 12-0 and grabbed the WBC international heavyweight belt by beating American Chauncy Welliver (34-5-5, 13 KOs) in the ninth round. Belarussian Alexander Ustinov (13-0, 11 KOs) dealt a heavy-handed knockout to Detroit's Julius Long (15-10, 13 KOs) in the first round of another heavyweight matchup.

Source: AP

Will Russia-Ukraine Be Europe's Next War?

WASHINGTON, DC -- Europe faces the risk of another major war. In 1939, Nazi Germany's invasion of Poland triggered the Second World War. Today the possible trip wire is not Poland, but Ukraine. And the aggressor will not be Adolf Hitler, but Russian Prime Minister Vladimir Putin.

Russian Prime Minister Vladimir Putin
Under his iron-fisted grip, Russia has been transformed into a gangster state. Democracy has been dismantled, corruption is rampant, journalists are murdered, dissidents are imprisoned and the media is controlled by the regime.

Flush with petrodollars, Moscow is seeking to restore the Great Russian Empire. It poses a strategic threat to its neighbors and to the West.

Mr. Putin is a former KGB apparatchik, who has called the Soviet Union's collapse the "greatest geopolitical catastrophe of the 20th century." The comment reveals his bloodlust and moral depravity. Soviet communism was the greatest system of mass murder in history. It was responsible for the deaths of more than 60 million people. The Soviet Union's disintegration in 1991 was not a catastrophe but the very opposite: a victory for democracy, national self-determination and civilization.

Out of the rubble emerged an independent Ukraine. "No other people suffered under Moscow's rule as much as the Ukrainians," says Gerry Kelebay, a professor at McGill University in Montreal, Canada, and a leading Ukraine expert.

In 1932-1933, Soviet dictator Josef Stalin imposed a terror famine in Ukraine. More than 10 million Ukrainians were systematically starved to death. "If any country has earned the right to national statehood, it is Ukraine," Mr. Kelebay said.

He is right: Kiev's hard-won sovereignty and burgeoning democracy has come at tremendous cost. Unfortunately, Ukraine faces Russian aggression once again. Only this time, it comes not from Marxist-Leninists, but from messianic nationalists.

Moscow is on the march. After invading Georgia and establishing Russia's dominance over the secessionist regions of South Ossetia and Abkhazia, Mr. Putin is now bent on dismembering Ukraine.

The Russian strongman has made no secret of his contempt for Kiev's independence. At a NATO summit in April, he told President Bush that Ukraine is "not even a real state," and that much of its territory was "given away" by Russia. Mr. Putin warned that Ukraine would "cease to exist as a state" if it dared to join NATO.

Ukraine, like Georgia, is despised by the Kremlin's xenophobic elite for one simple reason - it seeks to break away from Moscow's authoritarian grip. In response, Russia is trying to destabilize Ukraine.

Moscow's main aim is to wrest the Crimean Peninsula from Kiev's control. A majority of the Crimea's inhabitants are ethnic Russians. More importantly, the Russian Black Sea Fleet is based in Sevastopol.

Under a 1997 agreement between the two countries, the Russian navy is scheduled to leave by 2017. Ukrainian President Viktor Yushchenko refuses to extend the lease - rightly fearing Moscow plans to stay on indefinitely and eventually annex the entire Crimea. Russian officials have already said they will not abandon the base at Sevastopol and that Kiev's maritime laws do not apply to them.

Moreover, Russia has been distributing thousands of Russian passports to supporters in the Crimea. The plan is to replicate what was done in South Ossetia and Abkhazia: Create a pretext to send in Russian "peacekeepers" to protect supposedly endangered Russian "citizens."

But Ukraine is not Georgia; it is a large, militarily powerful country with long memories of Russian domination. Any attempt at partition by Moscow would be met by fierce resistance. It would spark a bloody Russo-Ukrainian war. This would inevitably drag in Poland and the Baltic States - all of which are members of NATO. Mr. Putin's bellicose nationalism threatens to ignite a European conflagration.

The battle over Ukraine is more than a regional test of wills. It is a clash over the future of Europe - and of Russia's role in it. Orthodox Slavophiles, such as Mr. Putin, dream of a "Slavic Union" composed of Russia, Belarus and Ukraine.

They favor a resurgent Russian imperialism, which seeks to dominate its neighbors, assert its sphere of influence in Eastern Europe and the Balkans and undermine American power abroad. It explains Moscow's support for rogue regimes like Slobodan Milosevic's Serbia, Saddam Hussein's Iraq and Mahmoud Ahmadinejad's Iran.

However, a democratic, unified Ukraine stands in the way of Mr. Putin's goal. Ukraine is the strategic bulwark against Russian expansionism - the eastern ramparts of Western civilization. Kiev is not some regional capital of a Greater Russia, but a fundamental part of the European mainland. This is why Ukraine seeks to embrace NATO and the European Union.

And it is also why Moscow desperately wants to derail Ukraine's integration into the Euro-Atlantic alliance. A prosperous and pluralist Orthodox Slavic state on Russia's borders would provide an attractive alternative to the Kremlin's brutal dictatorship.

A successful Ukraine would pave the way for liberal democracy to triumph in Russia. And Mr. Putin is willing to do anything to stop this from happening - including possibly plunging Europe into another disastrous bloodbath. We are all Ukrainians now.

Source: Washington Times

Yushchenko Has Betrayed Ukraine’s National Interests

KIEV, Ukraine -- President Viktor Yushchenko’s strategy lacks rationale, logic and is incomprehensible to those abroad who follow the enfolding political crisis in Ukraine over the last two months.

Viktor Yushchenko is gambling with his country’s fate and future because of his political immaturity and dislike of PM Yulia Tymoshenko.
This is the conclusion I have reached after a week in London talking to nearly twenty investment houses interested in potentially investing in Ukraine at the invitation of an investment banker.

This conclusion was also reached after my talk on Ukraine’s political crisis given to the Royal Institute of International Affairs.

None of those who attended doubted my criticism of the presidents strategy to call an election with the sole purpose of removing Tymoshenko to create a grand coalition and then install a technocratic prime minister and obtain the coalitions support for Yushchenko’s presidential campaign.

Why would anybody opt for an election when their personal ratings have been less than ten percent in the last two years? Why would you choose an election when popular support for your political force Our Ukraine-Peoples Self Defence (OU-PSD) has collapsed from 14 percent in the September pre-term elections to only 5 percent.

These are very bad odds to risk a strategy of opting for elections rather than compromise, especially at a time of global economic and financial crisis.

Yushchenko should be judged harshly for the step that he has undertaken. He has placed his personal, petty interests above those of national interests. When the entire world is calling for national unity in the face of a global economic and financial crisis that could lead a depression not seen since the 1930s President Yushchenko supports instability, disunity, and elections that together hamper the Tymoshenko government from dealing with the growing tsunami. Yushchenko’s response to the Georgian crisis was to declare war on Tymoshenko.

There are five reasons the presidents strategy is most likely to be a failure.

Firstly, in aligning with Regions and receiving financial backing from Akhmetov and other eastern Ukrainian oligarchs Yushchenko’s re-election bid would destroy his support in orange western-central Ukraine. How can Yushchenko look orange voters in the eye when he aligns with the Party of Regions that supported the independence of South Ossetia and Abkhazia? Was it not the president who attacked Tymoshenko for not supporting his position on Georgia when Tymoshenko and BYuT supported Georgian territorial integrity while Regions did not?!

Secondly, this risky strategy assumes that Regions can cajole its voters to back somebody they have always been told to detest, the “American satrap, pro-NATO, anti-Russian CIA agent” Yushchenko. While the Regions political machine could mobilise voters in the Donbas and perhaps in the Crimea to do what it wanted (i.e. support Yushchenko’s re-election) this is not true in the remainder of eastern and southern Ukraine, meaning at most Regions could get out 15-20 of its 34 percent support to back Yushchenko. And that is being optimistic.

Thirdly, it assumes the presidents political forces (Our Ukraine, United Centre, Arseniy Yatseniuk and Leonid Chernovetsky blocs) will do well in the 7 December pre-term election. This ignores OU-PSD’s low popularity of 4-5 percent and its abject failure to enter the Kyiv city council in pre-term elections held on 26 May. Even with 5 percent, half of this figure is support for political parties in the bloc who support Tymoshenko, such as Lutsenko.

If pro-presidential forces have only a small number of deputies the presidents leverage with Regions is low. Thus making it impossible to fulfill his two demands to Regions of being given the right to choose the prime minister and Regions supporting his presidential candidacy. Why should a Regions faction with 2-3 times more deputies agree to Yushchenko’s demands?

Fourthly, the presidents ill thought out strategy assumes that all of the pro-presidential forces would support joining a grand coalition. Peoples Union-Our Ukraine leader Vyacheslav Kyrylenko has, for one, said he will not. The Peoples Union-Our Ukraine is one of the four (out of nine) parties that supported the presidents call for OU-PSD to withdraw from the orange coalition.

This also assumes that Ukrainian voters can be taken for idiots which they are not. After the president harshly condemned BYuT’s alleged willingness to entertain a coalition with Regions (including bizarrely in his statement that dissolved parliament) the president’s strategy aims to itself establish a grand coalition. This is nothing more than George Orwellian double standards. Kyrylenko – you have been taken for a ride!

Fifthly, the presidents strategy fails to take into account that the only two political forces that are likely to improve their support in the December pre-term elections are BYuT and Regions. Both could increase their support to similar levels of 35 percent, meaning they would control over 80 percent of parliamentary deputies. BYuT or Regions could then seek to establish their own separate coalitions (rather than joining with pro-presidential forces) and in the process marginalise the president.

BYuT could align with the Volodymyr Lytvyn and Yuriy Lutsenko blocs, the two together could possess 30-40 deputies, giving the three party coalition a slim majority of 226-230.

Alternatively, Regions could join with the Lytvyn bloc and the Communist Party’s 30-40 deputies and create an Anti-Crisis-2 coalition. In the outgoing parliament Regions, the Lytvyn bloc and Communists are only four deputies short of a coalition (222). This suggests that if Regions increases its number of deputies Anti-Crisis-2 could possess a slim majority of 226-230.

The president is gambling with his country’s fate and future because of his political immaturity and dislike of Tymoshenko. In doing so he is undertaking a risky strategy at a time when there is no popular support for an election. The ill conceived strategy will undermine Ukraine’s ability to deal with the global economic and financial crisis that is already affecting the country and will hit it like a tsunami. Meanwhile, continued political instability and will de-rail Ukraine’s path to NATO.

The presidents preference for elections will lead to the end of Yushchenko.

Source: Taras Kuzio's Blog

2nd Ship Seized As Pirates Threaten To Blow Up 1st

NAIROBI, Kenya -- Armed pirates hijacked a massive tanker as world powers on Saturday headed toward the Somali coast to end a two-week standoff aboard a ship laden with tanks and weapons, officials said.


The latest ship to be seized, a Greek vessel flying a Panamanian flag, was traveling from Southeast Asia to Europe, said Noel Choong, head of the International Maritime Bureau's piracy reporting center in Kuala Lumpur. There were no further details on the ship, which was seized Friday.

Pirates who have been holding the Ukrainian MV Faina for two weeks have threatened to destroy the vessel unless a ransom is paid. Six U.S. warships are surrounding the Faina and a Russian frigate was heading toward the scene, raising the stakes for a possible commando-style raid on the ship.

Calls to the Odessa offices of the ship's operator, Tomex Corp., rang unanswered Saturday.

Pirates have seized more than two dozen ships this year off the Horn of Africa, but the hijacking of the Faina has drawn the most international concern because of its dangerous cargo - 33 tanks and other heavy weapons.

The threat by the pirates on the Faina was unusual. Pirates operating off Somalia rarely harm their hostages, instead holding out for a ransom that often exceeds $1 million. But international pressure was mounting regarding the Faina hijacking, with NATO forces planning to deploy.

"We held a consultative meeting for more than three hours today and decided to blow up the ship and its cargo - us included - if the ship owners did not meet our ransom demand," Sugule Ali said in an interview by satellite telephone on board the ship late Friday.

He gave the ship owners until Monday night to pay. Ali had said Thursday he was willing to negotiate the ransom demand of $20 million, after nearly two weeks of insisting they would never lower the price.

"Either we achieve our goal and get the ransom or perish along with the ship, its crew and cargo," Ali said.

There are 20 Ukrainian, Latvian and Russian crew members on board. The ship's Russian captain died of a heart condition soon after the hijacking nearly two weeks ago, officials in Moscow say.

The U.S. Navy, which has six warships surrounding the Faina off the central coast of Somalia, had no comment on the pirates' threat Friday, said Lt. Nate Christensen, a spokesman for the 5th Fleet, which is based in Bahrain and helps monitor Somalia's coast.

Momentum has been growing for coordinated international action against the pirate menace.

NATO ministers agreed Thursday that they would have seven ships in the area within two weeks. In addition to the six U.S. warships near the Faina, helicopters buzz overhead daily.

Russia also announced it would cooperate with the West in the fight, and several European countries have said they will launch an anti-piracy patrol.

The U.N. Security Council this week called on countries to send naval ships and military aircraft, and U.S. warships are being diverted from counterterrorism duties.

Ukrainian Defense Minister Yuriy Yekhanurov said earlier that Ukraine does not want foreign countries to use power to take the ship. Most of the crew members aboard the Faina are Ukrainian.

A nation of around 8 million people, Somalia has not had a functioning government since 1991. A quarter of Somali children die before age 5 and nearly every public institution has collapsed. In the capital, Mogadishu, thousands of civilians have died over the past 18 months in a ferocious, Iraq-style insurgency.

Source: CBS News

Battle Over Early Election Decree In Ukraine

KIEV, Ukraine -- Ukrainian elections officials on Saturday refused to start preparations for early parliamentary elections after a court suspended a presidential decree, amid a deepening struggle for power between the president and prime minister.

PM Yulia Tymoshenko is fighting against a third parliamentary election in as many years.
President Viktor Yushchenko earlier this week ordered parliament dissolved and set the vote for Dec. 7, following the collapse of his pro-Western coalition with estranged Orange Revolution ally Premier Yulia Tymoshenko.

But Tymoshenko, who is determined to retain her job and avoid the third election in as many years, has vowed the vote will not take place.

Kiev's District Administrative Court suspended Yushchenko's decree ordering the vote while it considers an appeal by Tymoshenko's party, Central Election Commission spokeswoman Zoya Sharikova told The Associated Press.

Yushchenko's office, however, said the order had no authority since Yushchenko fired the judge before he made the ruling.

Tymoshenko ally Volodymyr Pilipenko said that firing the judge was "an act of despair" on the part of the president.

"The court ruling has been handed down and the election process cannot begin," he said.

Tymoshenko and Yushchenko have turned into bitter rivals ahead of the 2010 presidential vote. Their shaky alliance collapsed last month after Tymoshenko moved to trim presidential powers. Yushchenko also accused Tymoshenko of selling out to the Kremlin and betraying efforts to join NATO by failing to condemn Russia's August war with Ukraine's ally Georgia.

Speaking on a popular television talk show Friday, Tymoshenko said the country could not afford an election and that parliament would not pass the necessary legislation.

The deepening political turmoil bodes ill for this ex-Soviet republic, whose economy and banking system are already severely shaken by the global financial crisis.

Source: International Herald Tribune

A Carrier Fleet Grows In Ukraine

SALT LAKE CITY, Utah -- Russia has an offer that neighboring Ukraine can't refuse, and that won't make Russia look like a bully. Russia wants to built aircraft carriers, but the shipyards best suited for that kind of work are in Ukraine.

The Admiral Kuznetsov, Russia's only aircraft carrier.
At the moment, Ukraine and Russia are at odds over several major issues. One is possession of the Crimean peninsula (in southern Ukraine), and the Russian naval bases there.

Currently, Russia has leased Crimea, but the lease expires in nine years, and Ukraine does not want to renew, no matter how much the Russians huff, puff and threaten.

Ukraine does not trust the Russians, especially after what Russia has done to neighboring Georgia (invaded, then annexed part of Georgia).

So some Russian legislators have come up with a clever solution.

It goes like this. Russia would provide contracts to build aircraft carriers in Ukrainian shipyards, as well as cash to get those yards back in business (they are closed for lack thereof).

In return, Ukraine would extend the Crimean lease. Currently Russia stations 50 warships (most of them small, and many just patrol boats) and 80 aircraft in Crimea.

But there is a large Russian population in Crimea, and Russia would like to stay. It's also becoming clear that the EU (European Union) was shaken up by what happened to Georgia, and especially by the way Russian just shrugged off EU protests.

The EU and the U.S. are making aggressive noises that Ukraine will receive more substantial (more than diplomatic) support in any future confrontation with Russia.

So now Russia is looking to use the carrot, rather than the stick, to get its way. The carrier contract solution works out for everyone, except Western nations unhappy with Russia having a carrier fleet.

But that's a decade or more in the future, and the Russians have never shown any great capacity for effectively running aircraft carriers.

Source: Strategy World

Orange Alliance Tears Itself Apart

LONDON, England -- Ukraine's leaders have played into Russia's hands by putting ambition and rivalry before their country's interests.

Looks like the final nail has been driven in the coffin of the "orange alliance" between President Viktor Yushchenko and the Prime Minister, Yulia Tymoshenko.
"It's the bell tolling for the current authorities," said Ukraine's pro-Russian opposition leader, Viktor Yanukovych, in reaction to President Viktor Yushchenko's decision Thursday night to dismiss parliament and call early elections.

It's hard to disagree – it looks like the final nail in the coffin of the "orange alliance" between Yushchenko and the prime minister, Yulia Tymoshenko.

Four years after the orange revolution appeared to set Ukraine on a pro-western, democratic path, its leaders have taken it into another cul-de-sac.

The blame game over the last month has seen Yushchenko's office claim that Tymoshenko's silence over the Russia-Georgia war was evidence of a treasonous attempt to secure Moscow's backing for the presidential elections; Tymoshenko, for her part, sided with Yanukovych's Party of Regions in a vote to reduce the president's powers, which led to Yushchenko's party walking out on the coalition.

Neither side is blameless in this long saga, where both have time and again appeared to put personal ambition and rivalry ahead of national interests.

Yushchenko's strategy is hard to unravel. On the back of his failure to deliver on the promises of the orange revolution, his approval ratings are in single figures and his party is polling at around 5%.

His party is unlikely to gain in the elections and, after three elections in the last two years, people do not want to vote again. Polls show that around 70% are against early elections and many I have spoken to are not intending to vote.

If Yushchenko is trying to undermine Tymoshenko in the run-up to the presidential elections, she has already insulated herself against much criticism in two ways.

First, she did not form a coalition with the Party of Regions, thus warding off claims that she is a pro-Moscow candidate and a traitor to her core voters in the west of Ukraine.

Second, she made it clear in public that she was prepared to form a coalition and agreed to ultimatums from Yushchenko's bloc, Our Ukraine-People's Self-Defence.

These moves should protect her from losing significant support in western Ukraine.

The spat between Yushchenko and Tymoshenko put paid to hopes of a more promising offer from the EU in September when the coalition split on the eve of the joint summit.

The dismissal of parliament takes Ukraine's chances of receiving a membership action plan from NATO in December (when the elections are scheduled) from bad to nil.

Internal strife is constantly cited in European capitals as the main reason for Ukraine's poor international standing.

Elections are expensive, and can be destructive.

The next two months will see reams of kompromat, lowering public opinion of politicians even further, along with attempts to exploit divisions in Ukraine over Russia and NATO for political gain.

The constant attacks reinforce the Russian narrative of division, instability and lack of progress that has dominated post-orange revolution Ukraine.

As the Polish expert on eastern politics Wieslaw Romanowski put it on Polish Radio: "It is not Yanukovych, nor Yushchenko, nor Tymoshenko who is the ally of Russia in Ukraine. The ally of Russia in Ukraine is crisis."

Source: Guardian UK

Ukraine PM Says No To Early Elections

KIEV, Ukraine -- Ukraine's prime minister says there will be no early parliamentary elections, defying a presidential decree that set a Dec. 7 vote.

Yulia Tymoshenko does not want early elections.
Yulia Tymoshenko says in a televised statement Friday that early elections are unconstitutional and that the country has no money to pay for them.

She predicts that parliament would reject the new vote.

President Viktor Yushchenko earlier this week moved up the elections, after dropping attempts to revive the shattered pro-Western coalition with Tymoshenko.

Tymoshenko's move raises the stakes in her political battle with Yushchenko.

Her party reportedly went to court to avoid early elections, prompting the president to fire the judge considering the case.

Source: AP

Ukraine Considers Measures To Fight Crisis

KIEV, Ukraine -- Ukrainian President Viktor Yushchenko called Friday for measures to boost the economy battered by the global financial crisis and political instability.

Members of Ukraine's Prime Minister Yulia Tymoshenko's bloc swarm around parliament chairman Arseniy Yatsenyuk in Ukraine's house of parliament in Kiev October 10, 2008. Ukrainian President Viktor Yushchenko has called for an early December 7 election, a move that has been opposed by Tymoshenko's supporters.
The national currency, the hryvna, has fallen nearly 20 percent in recent weeks and the Central Bank has had to bail out two major banks to avert a banking crisis.

The Ukrainian stock market has plummeted some 30 percent over the past month as investors fled emerging markets.

Many steel mills — the backbone of the economy — have been closed.

Yushchenko on Friday met with bank leaders and government representatives tasking them with developing unspecified measures to tackle the crisis.

His deputy chief of staff Andriy Honcharuk stressed that the economy is strong enough overcome the problems.

But experts warn that Yushchenko's decision this week to dissolve parliament and set early parliamentary elections for Dec. 7 could deepen the nation's political turmoil and exacerbate economic problems.

Some say the country can hardly afford to finance the third parliamentary elections in as many years.

Source: International Herald Tribune

Somali Pirates Have 6 Rocket Launchers From Captured Ukrainian Ship: Commission

MOSCOW, Russia -- There are six multiple rocket launchers with ammunition in addition to tanks and grenade launchers aboard the Ukrainian ship Faina captured by pirates off the coast of Somalia, the Verkhovna Rada ad hoc committee for illicit arms trade has concluded.

Somali pirates in small boats hijacked the MV Faina, a Belize-flagged cargo ship owned and operated by Kaalbye Shipping Ukraine.
"It is easy to imagine what trouble these weapons can cause, if terrorists get hold of them," committee head Valery Konovalyuk said during a Moscow-Kyiv TV linkup.

He said Ukraine currently has over 2 million tonnes of various types of ammunition.

"If order is not restored at the warehouses where this enormous amount of ammunition is stored, we will witness illegal arms deliveries to hot spots many more times," Konovalyuk said.

On September 25 pirates captured the Faina carrying over 30 T-72 tanks and other weapons to Kenya. At first the crew consisted of 17 Ukrainians, three Russians and one Latvian aboard. On September 28 it was reported that the captain, a Russian citizen, died of high blood pressure.

Source: Interfax

Ukraine Seizes Prominvestbank, Prompting Downgrades

KIEV, Ukraine -- Ukrainian lender Prominvestbank had its credit ratings cut three steps by Moody's Investors Service after the country's central bank seized control.

National Bank of Ukraine (above) has seized control of Prominvestbank and frozen payments to creditors for six months.
The National Bank of Ukraine appointed its deputy governor, Volodymyr Krotyuk, as the temporary head of Prominvestbank yesterday and imposed a moratorium on payments to creditors for six months.

Ukraine's government has the worst creditworthiness among Europe's emerging markets, based on the cost of credit-default swaps. It joins Iceland, Germany, the U.K. and Belgium among a growing number of European countries taking control of lenders in the biggest banking crisis since the Great Depression.

Moody's has "concerns about the bank's ability to continue its operations as a viable stand-alone entity," Moody's analyst Yaroslav Sovgyra said in a report today. "Prominvestbank's franchise and the overall credit profile have been significantly impaired in light of the recently experienced run on deposits by the bank."

Prominvestbank, Ukraine's sixth-largest lender, had 27.6 billion hryvnia ($5.1 billion) of assets as of Sept. 30, according to its Web site. The Kiev-based bank was set up in 1992 and increased its net income to 360 million hryvnia in the second quarter from 196 million hryvnia in the same period a year ago, according to the Web site.

Soaring Inflation

The National Bank of Ukraine provided a 5 billion hryvnia emergency credit line last week to Prominvestbank. It took over management yesterday to help the lender "renew its financial stability" after a run by depositors.

Moody's cut the Kiev-based bank's foreign-currency deposit ratings to Caa2, its fourth-lowest grade, from B2.

Ukrainian law gives the central bank "powers such as limiting or prohibiting the disposal of the banks' capital and assets and imposing temporary restrictions on payments to creditors," Moody's said.

Soaring inflation and political uncertainty are driving investors from Ukrainian assets. Annual inflation almost tripled in a year to a record 31.1 percent in May and was at 24.6 percent in September. Ukraine's current-account deficit widened to $7.7 billion in the first seven months of the year from about $2 billion a year ago, threatening the currency's stability.

The hryvnia has slumped 12 percent against the dollar since Sept. 2, when President Viktor Yushchenko's party broke from its coalition with Prime Minister Yulia Timoshenko. Yushchenko dissolved the parliament yesterday, calling for new elections.

Default Swaps

The cost of protecting Ukraine's government bonds against default soared to a record 1,066 basis points today, according to CMA Datavision in London. It's the only government debt among Europe's emerging markets to trade above 1,000 basis points, a level investors charge for creditors perceived as "distressed."

Credit-default swaps are financial instruments based on bonds and loans that are used to speculate on a country or company's ability to repay debt. They pay the buyer face value in exchange for the underlying securities or the cash equivalent should a borrower fail to adhere to its debt agreements. An increase indicates a deterioration in the perception of credit quality.

A basis point on a credit-default swap contract protecting $10 million of debt from default for five years is equivalent to $1,000 a year.

Source: Bloomberg

Russia Warms To Tymoshenko Ahead Of Ukraine Vote

LONDON, England -- Political alliances are shifting once again in Ukraine. It was only last December that Yulia Tymoshenko became prime minister after her bloc and President Yushchenko’s party won earlier elections. But disagreements and personal rivalry between the leaders soon came to the surface.

PM Yulia Tymoshenko
Among the main causes of division is the president’s strident pro-Western leanings, in particular his aim to bring Ukraine into NATO. Tymoshenko has sought to distance herself from this tendency. It is a stance that has not gone unnoticed in Moscow.

The former Soviet republic, which became independent in 1991, remains deeply divided over where its destiny lies. Between a third and a half of the population is Russian speaking but that does not mean they are anti-Western. And likewise the rest of Ukraine is not not necessarily anti-Russian.

The tensions between the president and prime minister came to ahead during the war in Georgia. Yushchenko rallied to his Georgian counterpart’s side in a show of solidarity. But Tymoshenko criticised him for backing Georgia to such an extent. That earned her accusations of treason from his supporters.

It led to a fundamental shift in parliament where Tymoshenko’s bloc now threw its lot in with the opposition, which draws its support mainly from Russian speaking regions. They voted in a number of measures to reduce the president’s powers.

Under these circumstances the collapse of the coalition was inevitable. Yushchenko withdrew his Our Ukraine party from the administration, triggering fresh elections.

Tymoshenko’s position on Georgia also helped turn around her relations with the Kremlin. The new warmth was on show last Thursday when Tymoshenko — who two years ago accused Russia of extorting cash from Ukraine in a row over gas — had cordial meetings her counterpart Vladimir Putin and President Dmitry Medvedev.

Some analysts believe Moscow may look at their preferred candidate in presidential elections in 2010.

Source: Euronews

Ex-Presidents Back Rada Ouster

KIEV, Ukraine -- Two of Ukraine's former presidents support Victor Yushchenko’s Oct. 8 dismissal of parliament and calling of new elections. But Leonid Kravchuk is calling for early presidential elections as well.

Former Ukraine presidents Leonid Kravchuk (L) and Leonid Kuchma.
Leonid Kravchuk, president from 1991 to 1994 said that while people don’t want elections, the “scenario [of early] elections was unavoidable… given the make up of the country’s political elite.”

He blamed Yushchenko for “placing ambitions above all else” and called upon him to announce presidential elections simultaneously with the parliamentary poll as the optimal solution to the political standoff that has gripped the country.

“That’s exactly what I did,” Kravchuk said, referring to the snap poll that saw him lose to Leonid Kuchma in July of 1994.

Then, the country was grappling with striking coal miners, hyperinflation and Crimean separatism.

Kuchma, meanwhile, expressed support for Yushchenko’s move as a way of “changing the country’s political elite,” UNIAN news agency reported Oct. 9.

“There’s no point shuffling the same deck of cards of the same politicians,” Kuchma said.

Kravchuk argued that while early parliamentary elections will not drastically change the current make up of parliament, letting voters also choose a president to work with the next parliament is a way out of the standoff.

“This will put and end to the cycle of repeat elections… it will help Ukraine save face in the world and help save parliamentarianism in Ukraine.”

Kravchuk predicted that Tymoshenko and Yanukovych would square off in the second round of presidential elections.

He added that the political forces led by this duo will also take the largest slices of the parliamentary pie.

As president, Kravchuk agreed to early pre-term parliamentary and presidential elections in the fall of 1993 when the country was gripped by multiple crises of striking miners, hyperinflation and Crimean separatism.

But the elections were not simultaneous in 1994: the presidential poll was held in July, buying Kravchuk more than a half a year of time in office.

Kravchuk lost to Leonid Kuchma in the second round after the winning the first by a 38 to 31 percent margin. Kuchma beat Kravchuk in the second round 52 to 45.

That same year very messy pre-term parliamentary elections were held lasting five months from March until August.

But even multiple rounds of voting saw 45 districts fail to elect members to the 450-seat legislature.

Source: Kyiv Post

Is Anybody Listening Out There?

EVPATORIA, Ukraine -- Messages have been sent to a planet 20 light years from Earth in the hope they will reach intelligent alien life.

Ukraine's RT-70 radar telescope in Crimea.
Some 501 photos, drawings and text messages were transmitted on Thursday by a giant radio-telescope in Ukraine normally used to track asteroids.

The target planet was chosen as it is thought capable of supporting life.

Any reply to the messages - collated through a competition by the social networking website Bebo - would not reach Earth for 40 years.

The competition - A Message From Earth - invited Bebo's 12m users to send in missives they would like extra-terrestrials to receive.

Topics submitted ranged from the environment, politics and world peace to family relationships and the sender's first kiss.

Having been translated into a binary format, the 500 selected will travel 120 trillion miles into space after being sent via high-powered radio waves from the National Space Agency of Ukraine's RT-70 radar telescope in Evpatoria.

Here we are

After being launched at 0600 GMT Bebo's mission commander Oli Madgett said the message "passed the Moon in 1.7 seconds, Mars in just four minutes and will leave our Solar System before breakfast tomorrow".

Organisers hope the hi-tech package will reach its target - the planet Gliese 581C - in early 2029.

Bebo spokesman Mark Charkin said: "A Message From Earth presents an opportunity for the digital natives of today... to reconnect with science and the wider universe in a simple, fun and immersive way."

Seth Shostak, a senior astronomer from the Search for Extra Terrestrial Intelligence Institute in California, said whether aliens who might receive the messages would understand them was beside the point.

"The point might simply be: well, here we are; we're clever enough to build a radio transmitter," he told the BBC.

"So if anybody's out there and they find that signal, they at least know it that, in the direction of that star system over there, there must be a planet with some pretty clever things on it."

Source: BBC News

Ukraine Banks Ask Government For Billions In Assistance

KIEV, Ukraine -- Ukraine's already-unstable banking sector appeared even more shaky on Thursday with dozens of banks applying formally for government assistance.


A total of 25 loan institutions have filed requests for low- interest credits or other state financing, said Anatoly Shapovalov, a spokesman for the National Bank of Ukraine (NBU), according to an Interfax news agency report.

The NBU announcement came one day after the Ukrainian government unveiled an unprecedented one-billion-dollar bail-out of Prominevestbank, the country's sixth-largest lender.

The NBU expects to issue "at least" 310 million dollars in additional financing to the growing group of needy banks, in order to maintain liquidity throughout the industry, Shapovalov said.

Ukrainian financial media estimated the value of loans soon to be issued by the NBU to the country's banking sector at as much as two billion dollars, including money already promised to Prominevestbank.

Account-holders at the beleagured Prominvestbank were unable to withdraw funds or otherwise conduct business on Thursday, as bank offices were closed.

Prominvestbank staff speaking on Channel 5 television said accounts would be "unfrozen" as soon as the government assistance package is paid in full to Prominvestbank, the Delo newspaper reported.

Prominvestbank management on Thursday requested an additional 390 million dollars in assistance, above and beyond the 1 billion dollars promised by the government on Wednesday, the Interfax news agency reported.

Kommersant-Ukraina newspaper identified the top-10 Narda bank as one of the 25 banks asking for government financing. Narda will receive a 290 million dollar bail-out package needed to cover 230 million dollars of external debt, according to the report.

The money fronted to Narda by the NBU will allow the bank "to resolve its cash flow problems, plus give us additional funds to deal with other issues," said Ihor Hilenko, Narda bank president.

Other top Ukrainian banks asking for help on Thursday were Rodovidbank, Alfa-Bank, Kreditprombank, and Finansi i Kredit bank, according to an Economicheskie Izvestia newspaper article.

The NBU already had approved 23 of 25 assistance package requests worth some 620 million dollars, according to the report. The banks needing cash inflows accounted for some 25 per cent Ukraine's banking sector, observers said.

Source: ADP

Ukraine's Orange Revolution Victors To Become Election Rivals After Coalition Collapses

KIEV, Ukraine -- Ukraine’s pro-Western coalition succumbed to bitter personal rivalry last night after the President dissolved parliament and called a snap election.

Mr Yushchenko accused Mrs Tymoshenko of mounting a "political and constitutional coup d'état".
The move pits President Yushchenko against his former ally Yuliya Tymoshenko in a struggle for political dominance. The feud between the leaders of the 2004 Orange revolution threatens to open the door for their pro-Russian rival Viktor Yanukovych to make a stunning comeback and tilt Ukraine back towards Moscow.

The election will be the third in two years as Ukraine has lurched from one political crisis to another. It threatens to derail the country’s bid for Nato membership at the Nato summit in December and comes as the economy struggles in the face of the global financial crisis.

Mr Yushchenko launched a strong attack on Mrs Tymoshenko, the Prime Minister, in a pre-recorded television address announcing the dissolution of parliament. It was broadcast while he was on a visit to Italy.

“I am convinced that the democratic coalition was ruined by one thing alone — the ambition of one person, the hunger for power . . . and the dominance of personal interests over national ones,” he said. The President can dissolve parliament if a new government is not formed within 30 days of the previous one collapsing.

Mr Yushchenko set no date for the election, though many expect it to be held in December. Mrs Tymoshenko is likely to challenge his decision, however, arguing that it is unconstitutional to dissolve parliament before November, a year after deputies were sworn in following the last election.

The crisis erupted last month when the parliamentary party supporting Mr Yushchenko quit Mrs Tymoshenko’s ruling coalition, which had only a two-seat majority in the 450-member Rada.

The President’s Our Ukraine party resigned in protest at Mrs Tymoshenko’s support for measures proposed by Mr Yanukovych’s opposition Party of Regions to limit the powers of the presidency.

Mr Yushchenko dissolved the parliament last year after accusing Mr Yanukovych, then Prime Minister, of seeking to amend the Constitution to destroy his authority.

In the address Mr Yushchenko accused Mrs Tymoshenko of mounting a “political and constitutional coup d’état” and rejected all attempts to rebuild the coalition. The leader of Our Ukraine in parliament described the alliance with the Party of Regions as a “pro-Kremlin majority”.

Mrs Tymoshenko rejected the allegations and accused him of destroying the coalition to damage her chances of succeeding him in presidential elections due next year.

Opinion polls consistently rate her Ukraine’s most popular politician, while support for Mr Yushchenko languishes in single figures.

Tensions had already flared between the Orange coalition allies over Russia’s war with Georgia. Aides to President Yushchenko accused Mrs Tymoshenko of “high treason” for failing to condemn the Kremlin’s actions.

Source: Times Online

Snap Election Called In Ukraine

KIEV, Ukraine -- President Viktor Yushchenko of Ukraine has dissolved parliament weeks after the collapse of the country's ruling pro-Western coalition.

Ukraine's President Viktor Yushchenko speaks during his televised address in Kiev, October 8, 2008. Yushchenko abandoned the search for a viable governing coalition on Wednesday, dissolved parliament and called an early election to the chamber.
Mr Yushchenko, who is visiting Italy, announced Ukraine's third general election in less than three years on television, in a pre-recorded speech.

The coalition collapsed after Prime Minister Yulia Tymoshenko backed a move to reduce the president's powers.

In his speech, the president blamed its collapse on her "thirst for power".

Many analysts believe Ms Tymoshenko will stand for president in 2010.

She and Mr Yushchenko were allies during the 2004 "Orange Revolution" which swept pro-Western forces to power after a discredited presidential election.

'Ruined by ambition'

The president did not set a date for the new election.

"In conformity with the Ukrainian constitution, I halt the parliament's powers and announce parliamentary elections," he said in his five-minute speech.

"The vote will take place in democratic and lawful fashion."

"I am convinced, deeply convinced that the democratic coalition was ruined by one thing alone - human ambition," he continued.

"The ambition of one person. Thirst for power, different values, personal interests taking precedence over national interests."

Mr Yushchenko's Our Ukraine party pulled out of the coalition on 3 September after the Tymoshenko Bloc sided with the pro-Moscow opposition Party of Regions to pass several laws Mr Yushchenko saw as a threat to his presidential powers.

The coalition was officially dissolved on 16 September and parties had 30 days to form a new government.

Source: BBC News

German Pre-Emption

NEW YORK, NY -- NATO is having a bad year, and Angela Merkel is making sure it'll stay that way. The German Chancellor hasn't learned that appeasing Vladimir Putin's Russia carries a price.

German Chancellor Angela Merkel
On Thursday, she let drop that Georgia and Ukraine won't be considered for the "Membership Action Plan" (or MAP) that would help them prepare for possible accession to the alliance.

The MAP is usually a decade long and membership