Business in Ukraine

(AP) - Ukraine’s efforts to receive an emergency loan from the International Monetary Fund were stalled Tuesday as a political standoff among ruling politicians blocked legislation to accept the rescue.

Ukraine is hoping the $16.5 billion loan will help it overcome a severe financial crisis, as it battles a drastic fall in exports, a weakened national currency and a shaken banking sector.

But a fierce standoff between President Viktor Yushchenko and Prime Minister Yulia Tymoshenko over a planned election is threatening to stall the deal. Tymoshenko is fighting Yushchenko’s order to hold early parliamentary elections, in which she risks losing her job.

Parliament was to consider Tuesday a series of competing bills aimed at overcoming the financial crisis, but the pro-Tymoshenko lawmakers blocked parliament’s presidium in protest, stalling a vote on the IMF plan.

The IMF hasn’t made its conditions public, but provisions in draft legislation indicate they might include reducing social spending and raising taxes to adopt a balanced budget and stem 16-percent inflation.

Ukraine is one of hardest-hit by the financial crisis among emerging markets. Output in the steel industry, which accounts for 6 percent of the GDP and 40 percent of the country’s exports, is down by 30 percent on a fall of global demand.

That has widened the trade deficit to $12.5 billion so far this year. In the absence of foreign currency flowing into the country, the hryvna plunged to a historic low of $6.01 last week as a run on banks stripped the banking sector of $3.4 billion.

Lawmakers were to resume deliberations in the afternoon and there was hope they would muster the necessary votes. A Tymoshenko ally said his faction was ready to approve a bill submitted by the president.

Tags: Politics //