Ukraine President Criticizes PM Over Russian Loan

Kiev, Ukraine
From: http://www.iht.com/articles/ap/2009/02/10/business/EU-Ukraine-Financial-Crisis.php
By: Kendall
Region: E. Europe, N. and Central Asia

In Ukraine this week, the Prime Minister, Yulia Tymoshenko, made the decision to seek a five billion dollar rescue loan from Russia to help Ukraine amidst the international economic crisis. The request for financial aid rang out to Russia and several other countries when the talks for a loan from the International Monetary Fund were stalled. Ukraine is trying to avoid an all-out collapse while it is being pressured by high gas bills from Russia and billion dollar debts of the state gas company.

However the decision to call for the Russian loan is controversial, as President Victor Yushchenko disagrees, saying that the loan will make Ukraine too dependent on Russia. The President says that Ukraine might not be able to pay back the loan, putting its gas transit system in jeopardy of control by Russia. This gas transit system has already been the topic of feuds between Russia and Ukraine. Russia pipes gas to all the European countries through huge gas pipelines that happen to pass through Ukraine. Russia doesn’t like that Ukraine is given power over the gas that is transited through their country. If Ukraine was forced to hand over the gas system to Russia to pay back loans, it would take away their privileges of say in transit prices and its own gas prices. However, Prime Minister Tymoshenko said she would not let that happen.

I think this story is interesting and important because it shows to what extent the international economic crisis is affecting everyone all around the globe. Often times we hear all about the problems in the U.S. and forget that it’s affecting everyone in the world! Ukraine has to depend on Russia for five billion dollars, a country that it’s already having tensions with. This is why our whole international community has to work together to ease the economic crisis and bring down political tensions.