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Ukraine faces 'economic abyss'

February 24, 2014

The Ukrainian parliament is to convene to tackle an impending economic crisis. The West and Russia have both offered Ukraine financial aid, but a transitional government must first be installed before money can flow in.

Ukraine Kiew 23.2.2014
Image: picture alliance / AP Photo

Ukraine's political turmoil exposes economic woes

Ukrainian lawmakers were scheduled to meet for an extraordinary session of parliament on Monday morning. At issue is how to stave off an economic crisis threatening to destabilize the eastern European country, which just days ago saw the ouster of President Viktor Yanukovych and the end of three-month long mass protests.

Interim leader Oleksandr Turchynov warned on Sunday that Ukraine was "rolling toward an [economic] abyss."

Ukraine's political turmoil exposes economic woes

The EU and the US both vowed over the weekend to lend financial support to the transitional government. EU foreign policy chief Catherine Ashton was scheduled to travel to Kyiv on Monday to discuss "measures to stabilize the economic situation."

Meanwhile, US Treasury Secretary Jack Lew urged the interim Ukrainian leadership to reach out to the International Monetary Fund (IMF) as soon as a transitional government had been agreed upon, according to a Treasury official.

Interim President Turchynov has said he will swear in an interim government on Tuesday. Presidential elections are to be held on May 25.

Reaching out to Russia

On Sunday, interim President Turchynov said the new leadership was seeking "the return to the path of European integration." However, he stressed that Kyiv wanted to put dialogue with Moscow on a "new, equal and good-neighborly footing that recognizes and takes into account Ukraine's European choice." He delivered the comments in a televised speech.

Russian President Vladimir Putin has said that Moscow intends to help Ukraine through its political transition, working alongside the EU and the US.

During a telephone call with German Chancellor Angela Merkel on Sunday, he agreed that "Ukraine must quickly get a government capable of acting" and that its territorial integrity must be "preserved," according to Merkel's spokesperson, Steffen Seibert.

Soon after the discussion, Moscow summoned its ambassador to Ukraine back to Russia for consultations on the "deteriorating situation."

Stabilizing Ukraine's economy was the impetus for anti-government protests that began late last year. In November, President Yanukovych shelved an Associations Agreement with the European Union in favor of closer ties with Moscow, which soon thereafter yielded a $15-billion (10-billion euro) loan. At the time, the Ukrainian president defended the move as a necessary measure to keep the economy afloat. He contended that the EU's counteroffer at the time would not have been enough.

Last week, a government ultimatum for protesters to clear Maidan catapulted several months of anti-government demonstrations to a final showdown between security forces and civilians. The clashes, which included the deployment of snipers against protesters, resulted in over 80 deaths. By Friday, the opposition and President Yanukovych agreed to a peace deal brokered by the German, French and Polish foreign ministers.

The accord, however, did not fully defuse the political crisis. On Saturday, Ukraine saw the parliamentary-backed ouster of President Yanukovych, who subsequently fled, and the release of ex-Prime Minister Yulia Tymoshenko after two years in prison. Yanukovych is believed to be in in Kharkiv, but his exact whereabouts remain unknown.

kms/lw (AP, AFP, Reuters, dpa)