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Home / News / World /  Ukraine sees $35 billion aid need as Viktor Yanukovych warrant issued

Kiev/Moscow: Ukraine’s interim government said the country needs $35 billion of aid to avoid default as it issued a warrant for fleeing ex-President Viktor Yanukovych for his role in last week’s violence.

Lawmakers in Kiev are working on a coalition government after ousting Yanukovych from the presidency, while the US and the European Union have pledged aid for a new cabinet. Yanukovych and others were placed on a wanted list for their role in violence that killed at least 82 people last week, according to acting interior minister Arsen Avakov. Ukrainian assets gained.

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 former prime minister Yulia Tymoshenko, who vowed to return to the fractured political scene before a presidential election 25 May .

The situation in the financial sphere in general is difficult but controllable, acting finance minister Yuriy Kolobov said today on the government body’ website. The ministry and the central bank are working around the clock to to shore up the financial system, he said.

Seeking funds

Kolobov proposed calling an international conference of donors with the European Union, the US and other countries, according to the statement. The $35 billion financing package is needed for this year and next, the ministry estimated.

Parliament speaker Oleksandr Turchynov, handed presidential powers as the government is being formed, warned late yesterday that the economy was in a pre-default situation. Ukraine’s economy is spinning out of control, he said late yesterday on the parliament’s website.

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, he said. Another priority is to return to the European integration path.

Mykola Tomenko, a member of Tymoshenko’s Batkivshchyna party, said she was a candidate for the premiership, along with party leader Arseniy Yatsenyuk and billionaire ex-Economy Minister Petro Poroshenko. Tymoshenko, who was imprisoned more than two years ago for abuse of power, later ruled out the role for herself, as did Vitali Klitschko, who heads the UDAR party.

Nation divided

Ukraine spiralled into crisis in November when protesters took to the streets to oppose Yanukovych’s rejection of a deal to deepen ties with the EU. 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. Border guards stopped him at an airport in the eastern city of Donetsk two days ago.

Yanukovych wasn’t detained at the time. He traveled to Crimea after the plane was denied permission to leave Donetsk, Avakov said on his Facebook Inc. page.

A criminal case was opened into the mass murder of civilians, Avakov said. Yanukovych and other officials have been declared wanted.

Ukrainian assets have benefited, with the yield on the government bond maturing in April 2023 falling 74 basis points, or 0.74 percentage point, to 9.45 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.

Checkbook ready

Treasury Secretary Jacob J. Lew said the US was prepared to help Ukraine return to a path of democracy, stability and growth. UK 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 on Sunday in Sydney. We should be there with a checkbook to help the people of Ukraine rebuild their country.

The EU’s foreign policy chief, Catherine Ashton, will travel to Ukraine on Monday to meet party leaders. Russia halted a $15 billion bailout for its neighbour after the unrest and talks on resumed financing may continue only after a new government is formed, RIA Novosti reported on Sunday, citing Russian Finance minister Anton Siluanov in Sydney.

Yanukovych’s departure is a blow to Russia, whose President Vladimir Putin wanted Ukraine, a route for its energy shipments to Europe, to join a trade partnership of former Soviet states to rival the EU.

In Ukraine, the political crisis polarized sentiment between its western and central regions bordering the EU and those in the south and east that are home to more Russian speakers and ethnic Russians.

Lenin toppled

While people toppled Vladimir Lenin’s statues across the county as protests, according to TV channel 5, more than 2,000 rallied for closer ties with Russia in the southern city of Odessa. In Kerch, also in the south, marchers replaced a Ukrainian flag at the mayor’s office with Russian and Crimean flags, the Unian news service reported.

The opposition is following the lead of armed extremists and thugs whose actions pose a direct threat to the sovereignty and constitutional order in Ukraine, Russian Foreign Minister Sergey Lavrov said in a statement on 22 February.

Russia called its ambassador to Kiev back to Moscow for consultations due to aggravation of the situation in Ukraine and a need for in-depth analysis, its foreign ministry said in a statement on its website yesterday.

Grave mistake

White House National Security Adviser Susan Rice said the US would work with European partners to help finance Ukraine’s economic recovery, while warning Russia that any insertion of its troops would be a grave mistake.

It’s not in the interests of Ukraine or of Russia or of Europe or of the United States to see the country split, Rice said on NBC’s Meet the Press program. It’s in nobody’s interest to see violence return and the situation escalate.

Russia should recognize Ukraine’s European Choice, Turchynov said in the statement.

“We are ready for a dialog with top Russian officials to build relations on new, truly equal grounds," he said.

Turchynov, the deputy chairman of Tymoshenko’s Batkivshchyna party, also has temporary control over the outgoing cabinet. That administration has shrunk after lawmakers voted out the foreign, interior and other ministers.

Escape, cowardice

Turchynov said he would give up his leadership positions once an executive is formed.

Parliament also approved measures aimed at bringing those responsible for the violence to justice, while Yanukovych’s Party of Regions blamed him for the bloodshed.

We condemn Yanukovych’s escape and cowardice, the party said in a statement on its website yesterday. It decried criminal orders that led to victims, an empty treasury, huge debt and shame in the eyes of Ukraine and the whole world.

Border officials stopped Yanukovych’s plane in Donetsk two days ago and refused an offer from armed men of money in exchange for permission to depart, Oleh Slobodyan, head of the Border Service media department, said by phone on Sunday.

Yanukovych left the airport in an armored car and hasn’t been seen trying to cross the border again. Former Interior Minister Vitaliy Zakharchenko, ex-Prosecutor General Viktor Pshonka and former Tax Minister Oleksandr Klymenko were also denied permission to leave at the same airport.

Wealth disparity

With Yanukovych on the run, thousands of people visited his former residence over the weekend after lawmakers voted to revert it to state ownership. People milled around the man-made lakes, the life-sized galleon, the private zoo and a garage full of antique cars and limousines that surround a towering mansion, according to images on website Censor.net.

The luxurious estate dominated news broadcasts in Ukraine, where the average nominal wage is 3,619 hryvnia ($404) a month, according to data from the national Statistics Office.

Tymoshenko, jailed in 2011 for abuse of office on charges EU leaders have called politically motivated, spoke by phone with German Chancellor Angela Merkel and European Union Enlargement Commissioner Stefan Fule on Sunday. BLOOMBERG

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