February 2014 – UKRAINE – Ukrainian parliament Speaker Oleksandr Turchynov, handed presidential powers as lawmakers prepare to form a coalition government, warned that the economy was in a “pre-default situation.” Lawmakers in Kiev worked on reshaping government after ousting Viktor Yanukovych from the presidency for a role in the violence that killed at least 82 people last week. The U.S. and the European Union pledged aid for a new cabinet. Border guards stopped Yanukovych at an airport in the eastern city of Donetsk two days ago. He wasn’t detained. With protesters in control of the capital and Yanukovych denouncing events as a “coup d’etat,” his opponents face a contentious period after the release from prison of opposition leader Yulia Tymoshenko. Jailed more than two years ago for abuse of power, she vowed to return to the fractured political scene before presidential elections on May 25. “Ukraine’s economy is spinning out of control,” Turchynov said on parliament’s website late yesterday. “The new government’s task is to stop the country’s slide, to stabilize the currency rate, to ensure timely salary and pension payments, to win back investors’ trust, and to create new jobs. Another priority is to return to the European integration path.” Mykola Tomenko, a member of Tymoshenko’s Batkivshchyna party, said the former premier was a candidate for the premiership, along with party leader Arseniy Yatsenyuk and billionaire ex-Economy Minister Petro Poroshenko. Tymoshenko later ruled out such a role for herself, as did Vitali Klitschko, who heads the UDAR party.
Ukraine spiraled into crisis in November when protesters took to the streets to oppose Yanukovych’s rejection of a deal to deepen ties with the European Union. Violence crested last week in fighting in central Kiev before a peace agreement brokered by EU foreign ministers ended the clashes and triggered Yanukovych’s flight from Kiev. The peace deal bolstered Ukrainian assets, with the yield on the government bond maturing in April 2023 falling 77 basis points, or 0.77 percentage point, on Feb. 21 to 10.33 percent. With western nations and Russia tussling for sway over the country of 45 million people, the International Monetary Fund is ready to help Ukraine “not only from a humanitarian point of view but also from an economic point of view,” Managing Director Christine Lagarde told reporters in Sydney following a meeting of Group of 20 officials yesterday. Treasury Secretary Jacob J. Lew said the U.S. was prepared to help Ukraine return to a path of democracy, stability and growth. U.K. Chancellor of the Exchequer George Osborne agreed. “We are here ready to help just as soon as there is someone at the end of the telephone,” Osborne said in an interview yesterday in Sydney. “We should be there with a checkbook to help the people of Ukraine rebuild their country.” –Bloomberg