[Ohio UZO News] Ukraine: FT; Jamestown; NYT

[Deychak, Orest]

Financial Times

www.ft.com

Ukraine GDP down by 20%

By Roman Olearchyk in Kiev

Published: July 2 2009 

Gross domestic production in Ukraine, one of the world's most
recession-battered economies, contracted by 20 per cent in the first
quarter of 2009, according to official government figures released on
June 30.

After months of delay, the figures were released by the government of
Yulia Tymoshenko, prime minister, during a visit to Kiev by an
International Monetary Fund mission. The Fund is mulling whether to
grant Ukraine a third tranche from a $16.4bn lifeline granted last fall.

European leaders and bankers are keeping a close eye on Ukraine, whose
economy is deep in recession and finances are stretched to the limit.
With a 40 per cent stake on the Ukrainian market, European banks fear
troubles in the country's shaky bank sector could spill over. Europe
also worries Kiev's inability to pay for Russian natural gas imports
could spark another energy war. Its pipeline system feeds Europe with 80
per cent of Russian natural gas imports, but Ukraine has in recent
months struggled to pay Gazprom. Russian leaders have pressured Brussels
to help broker a loan of $2bn-5bn for Ukraine, warning that supplies to
Europe could be cut off as during a January dispute if Kiev fails to
pay.

Ukraine is hoping for swift IMF disbursement of a third tranche, more
than $3bn, to keep its financial system stable, cover a widening budget
deficit and help pay for gas imports. Talks over additional
multibillion-dollar loans to help Kiev pay for gas are also underway
with the IMF and other western lenders, including the European Bank for
Reconstruction and Development and the World Bank.

But with GDP in freefall and political rivalries and populism high ahead
of a January 2010 presidential contest, Kiev's lenders are seen as extra
cautious. Viktor Yushchenko, president, has accused Ms Tymoshenko, his
bitter rival, of suppressing GDP numbers to conceal the dire economic
situation ahead of the presidential election in which both erstwhile
allies are to clash with their Orange Revolution foe, Victor Yanukovich.

The GDP numbers appear less dramatic than estimates of a 25-30 per cent
GDP drop (January-February) released by Mr Yushchenko in April. But
"Ukraine, as expected, suffered the worst economic contraction in the
Central & Eastern Europe region in the first quarter of 2009", Austria's
Erste Group said in a July 1 report. "The figure is slightly better than
officials and the market expected, however it is slightly worse than our
base expectation of 18 per cent decline," Erste said, forecasting that
Ukraine's annual GDP could contract by 12 per cent.

A recovery in steel, Ukraine's main export, has been felt in recent
months, but production levels are still only 60 per cent of last year's
levels. At least 1m of 46m Ukrainians are estimated to be out of work,
but citizens have remained calm and studies show consumer confidence to
be on the rebound.

Much concern hovers over the stability of Ukraine's banks sector. It has
stabilised a bit in recent months after last autumn's run on deposits.
The hryvnia lost about 40 per cent of its value last fall, but has
stabilised at about 7.5 to the US dollar in recent months.

The government last month approved bailouts for three large banks, but
Kiev's credit market remains in a deep freeze. Many banks and companies
are struggling to restructure billions of dollars worth of foreign debt
that matures this year.


Jamestown Foundation Blog 


http://www.jamestown.org/blog


Wednesday, July 1, 2009


EU and Ukraine Discuss Gas Loan 


by Roman Kupchinsky

Consultations between Ukraine and the EU Commission about Ukraine's
urgent need for a loan to buy Russian gas ended Monday night in
Brussels. Ukraine needs the loan to insure a steady flow of gas to
Europe in the rapidly approaching heating season. 

The EU was optimistic that terms could be worked out; however the size
of the loan would be $2 billion, half of the $4 billion Ukraine was
seeking. Moreover the Commission attached a number of conditions to the
loan, foremost of which is a restructuring of Naftohaz Ukraine, the
state-owned Ukrainian gas monopoly in order to improve its transparency.
The Commission wants to see Naftohaz split into separate entities which
would each be responsible for different functions such as transport,
sales, production and storage.

Kommersant Daily reported that the EU was demanding that Ukraine insure
the implementation of the March 2009 agreement on renovating the
Ukrainian gas pipeline system, an agreement which has come under heavy
criticism from Russia. 

Ukraine needs to store 19.5 billion cubic meters (bcm) of Russian gas in
its underground storage facilities in order to insure an uninterrupted
flow of gas to Europe. This gas is used to power compression stations
along the route of the Ukrainian pipeline. 

The talks included representatives of Gazprom and Naftogaz, the World
Bank, the IMF, the EBRD and the EU.

"The participants made good progress in identifying the key issues of
concern and elements for possible solutions including possible financing
arrangements," the representatives said in a joint statement. 

Despite the optimistic prognosis, Russian energy experts and officials
were not convinced that the problem could be solved in time for the
heating season. One "Gazprom official was quoted as saying "We heard
that it would be impossible to finalize the loan before September. This
is already too late and we hope that it be agreed upon earlier." 

 

 

 

Say what one will, but much better this than renaming it in honor of
someone like a Lenin, Stalin, or Putin:

New York Times

ARTS, BRIEFLY

Ukrainians Hope To Rename Village For Jackson 

Compiled by DAVE ITZKOFF 

2 July 2009

Late Edition - Final

2

In one of the oddest displays yet of the global reach that Michael
Jackson possessed, residents of Oktyabrskoye, a Ukrainian village, are
seeking to rename it to honor Mr. Jackson, Agence France-Presse
reported. Oleg Kislitsyn, a member of the regional parliament, said
residents of the village, in the Zaporizhia region in southeastern
Ukraine, approached him with a proposal to rename the village Jackson.
''There are many fans of Michael Jackson there,'' Mr. Kislitsyn said. He
said that villagers wanted to create a Jackson museum to attract
tourists and that he supported the proposal to change the name. ''I am
not a fan, but I respect his work,'' Mr. Kislitsyn said. ''He had an
ironclad will for victory.'' The village's municipal council will
consider the request next month.

-------------- next part --------------
A non-text attachment was scrubbed...
Name: not available
Type: application/ms-tnef
Size: 11760 bytes
Desc: not available
URL: <http://clevelanduzo.org/pipermail/uzonews_clevelanduzo.org/attachments/20090702/1a971c90/attachment.bin>