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27 Oct, 2008 00:09

Ukraine: politicians bicker as economy suffers

The International Monetary Fund has agreed to provide Ukraine with $US 16.5 billion in light of the country's deteriorating financial situation. It's been made worse by the political turmoil in the country.

Kiev is due to hold early parliamentary elections in December, which would be the third ballot in less than three years.

For years most eastern European countries have enjoyed steady economic growth. Experts say these states may not have been affected as much as the U.S., Russia and Asian countries, but they will feel the impact on the global economy.

In Ukraine the predicted fallout will add to the ongoing political turmoil. Ukraine is due to hold an early parliamentary ballot in December. Many in the country say the election cost of $US 80 million is a luxury the state cannot afford.

The crippled parliament hasn’t passed any anti-crisis laws and attempts by Prime Minister Yulia Timoshenko to have the ballot cancelled haven’t met with success.

Ukraine is one country which even before the world crisis was believed to be on the verge of financial collapse. Over the last year it’s experienced the highest level of inflation in Europe and is now seeking $US14 billion worth of aid from the International Monetary Fund.

Economic expert Agvan Mikaelyan said that for the last four to five years Ukraine has not been paying much attention to its economy, as there has been an ongoing political crisis inside the country, including changes of power.

Several major banks in Ukraine have stopped giving currency loans to the public, and a number of car factories have almost gone bankrupt. Analysts believe the worst is yet to come.

“Ukraine is in a difficult situation, worse than in other countries of Eastern Europe,” said Mikaelyan.

“A large sector of the economy is connected with Russia. As for things that connect Ukraine with Europe, Europe is very unlikely to help, because things are tough there as well”.

Amid growing public fears of losing jobs and money, the owners of an antique gallery in Kiev have found positives in the market crisis.

Natalya Lysenko says the art world isn't suffering, as more people have come to the gallery since the talk of crisis came up.

“That’s because while the property market has stalled and markets are collapsing, if you buy an art item you know that your money is safe. Antiques never get cheaper. As they get older, in fact, they get more expensive.”