Ukraine is seeking at least $10 billion in aid to stave off a default as its economy shrinks under the strain of spending cuts and a separatist war, while foreign reserves languish at the lowest in more than a decade.
When we need financial assistance? Ukrainian Prime Minister Arseniy Yatsenyuk said after meeting European Union officials in Brussels. Let me put it in a nutshell: yesterday.
The former Soviet republic is discussing a financial rescue with the U.S. and the EU, Valeriy Chaly, deputy chief of President Petro Poroshenkos administration, told reporters in Kiev. Ukraine needs an international donor conference to prevent default, Yatsenyuk told lawmakers Dec. 11.
The government is grappling with the deepest recession since 2009 and this years worst-performing currency, with the hryvnia plunging 48 percent against the dollar and a $17 billion international bailout proving insufficient. While a Dec. 9 truce in Ukraines easternmost regions has stemmed fatalities in a conflict thats killed more than 4,600, talks over a lasting peace deal have been delayed.
Without additional resources, its almost impossible to cover financial gaps, Chaly said. Talks are about the amount Ukraine needs to conduct reforms and avert default, and the timing of such support. I cant tell you the exact size but lets say $10 billion. Otherwise, it will be very, very difficult to resolve the issue.
Ukrainian debt fell after Chalys comments. The yield on dollar-denominated government bonds due in 2017 soared more than 3 percentage points to a record. The hryvnia weakened 0.3 percent against the dollar.
Ukraine today signed a $200 million loan pact with the European Bank for Reconstruction and Development to upgrade portions of natural gas pipelines.
The authorities in Kiev are seeking to unlock the next tranche of its International Monetary Fund-led rescue and plans to approve a 2015 budget prepared by the countrys new government on Dec. 26. An IMF mission will return to the eastern European nation early next year, First Deputy Managing Director David Lipton said Dec. 13 in an e-mailed statement.
Yatsenyuk said Russias ultimate goal is to take over Ukraine and to eliminate Ukraine.
On the ground, the latest cease-fire has eased casualties, with no deaths reported by the military since Dec. 11, though skirmishes have taken place that the government blames on the pro-Russian insurgents. The intensity of attacks on Ukrainian forces is easing, military spokesman Andriy Lysenko said today.
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Ukraine Seeking $10 Billion in Aid Amid Talks With U.S., EU