[Ohio UZO News] Ukraine: AP; Reuters; FT

[Deychak, Orest]

Associated Press

EU Ukraine Politics; Ukraine's president abolishes court in battle with prime minister over parliamentary vote 

14 October 2008

 

KIEV, Ukraine (AP) - Allies of Ukraine's prime minister vowed Tuesday to block President Viktor Yushchenko's efforts to push ahead with early parliamentary elections.

The two leaders of the 2004 Orange Revolution have turned into fierce rivals and their wrangle over whether elections will be held on Dec. 7 has now turned to the courts.

Yushchenko dissolved parliament and called early elections after his pro-Western coalition with Prime Minister Yulia Tymoshenko collapsed. But Tymoshenko pledged there would be no election and appealed to a Kiev court to block preparations.

Over the weekend, the court agreed with Tymoshenko and froze preparations. On Monday, Yushchenko responded by ordering the court abolished.

Tymoshenko ally Valery Pysarenko said Tuesday that the prime minister's party will challenge that order.

Tymoshenko has also refused to fund the election, paving the way for a protracted standoff at a time when the economy is severely shaken by the global financial crisis.

The two leaders' alliance fell apart last month after Tymoshenko sided with the opposition in adopting a law trimming presidential powers. They two also disagreed in their reaction to Russia's August war with Georgia.

Yushchenko accused Tymoshenko of betraying efforts to join NATO and selling out to the Kremlin by failing to condemn the war. Tymoshenko says she opposes the war, but calls for partnership with Russia.


Reuters


No need to alter Ukraine's links with fin bodies-PM


Tue Oct 14, 2008 

KIEV, Oct 14 (Reuters) - Ukraine's financial system is working well and the country has no need to alter its current relations with international financial organisations, Prime Minister Yulia Tymoshenko said on Tuesday. Tymoshenko, addressing a news conference, was responding to a question about comments by a senior International Monetary Fund Official in Washington that Ukraine was seeking a funding programme.

"As far as our cooperation with international financial organisations is concerned, everything is proceeding in a calm fashion and according to plan," she said.

"There is no need to speed things up or to engage in extraordinary actions. Our country is operating according an absolutely normal financial regime."

The IMF official, speaking to Reuters on condition of anonymity, said: "Ukraine indicated over the weekend it intends to request an IMF programme."

The step appeared to be targeted at bolstering confidence in Ukraine's banking system. On Monday, Ukraine's central bank capped banks' assets at their current levels, curbing their borrowing and lending to stabilise the banking system.

Financial Times

Emergency moves to defend Ukraine banks 

By Roman Olearchyk in Kiev 

Published: October 13 2008 20:47 

Ukraine’s central bank on Monday imposed emergency measures to stabilise the country’s fragile banking sector, which has been shaken by declining confidence, a falling currency and a deepening political crisis.

The National Bank of Ukraine (NBU) imposed a six-month freeze on the early withdrawal of deposits from commercial banks to prevent a run. It more than tripled its guarantee on deposits to $38,000 (€28,100, £22,350) and increased reserve requirements for banks.

The NBU’s deputy chief, Volodymyr Korotyuk, said the measures should “stabilise the situation within one month, possibly earlier”.

Tim Ash, an analyst at the Royal Bank of Scotland, said the measures came amid “increasing stress on the local banking system, concerns over political stability and [as difficulty in] external financing mounts”. In October some 4 per cent of deposits, or $3bn, was withdrawn from Ukrainian banks, he estimated.

The NBU has in recent days offered more than $1bn in emergency aid to thwart liquidity and solvency problems at a handful of banks. The biggest intervention came at Prominvestbank, the recipient of a $600m rescue package. The NBU also introduced state management at the bank, Ukraine’s sixth largest.

Nadra, the seventh biggest, on Monday confirmed it received a central bank loan of about $290m.

Bankers in Kiev said a run on deposits at Prominvestbank were triggered by a smear campaign and hostile corporate attack. But they warned dozens of the country’s 170 banks were experiencing liquidity problems.

Ukraine’s economy has in recent years been boosted by high prices on steel, the country’s main export, and a lending boom financed by heavy foreign borrowing by domestic banks. Now falling steel prices and a widening current account deficit have put pressure on the currency, and access to fresh credit facilities has dried up with the credit crunch. 

Bank officials said they were eager to restore confidence in the sector, and worry that a deepening political crisis could stir up instability.

Viktor Yushchenko, Ukraine’s president, dissolved parliament this month, ending his alliance with Yulia Tymoshenko, the premier. In a decree last week Mr Yushchenko scheduled Ukraine’s third parliamentary election in as many years for December 7. The move threatens to end the two leaders’ pro-west coalition.

But in recent days Ms Tymoshenko has defied the vote, insisting it would complicate the country’s ability to grapple with the world financial crisis. Her allies have in recent days challenged the president’s decree on snap elections in court, setting the stage for a stand-off and drawn out legal battle.

 

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