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Ukraine needs a big fix

Monday, February 24, 2014 - 02:21

Feb. 24 - The EU and the IMF say they're standing by to help rescue a near-bankrupt Ukraine - but face severe challenges including the lack of a credible government and identifying Russia's intentions towards its crisis-hit neighbor. David Pollard reports.

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A day of reckoning after the fall of a brutal government. At least eighty lives were lost in Kiev's street battles. Financially, Ukraine appears to be tottering towards bankruptcy. Western creditors, who met at the G20 in Australia, say they're ready to help. SOUNDBITE (English) CHRISTINE LAGARDE, MANAGING DIRECTOR OF THE IMF SAYING: "If the Ukrainian authorities were to ask for IMF support, whether it is policy advice, whether it's financial support together with economic reform discussions, obviously we stand ready to do that." As the IMF chief, Christine Lagarde, suggests - reform is a prerequisite. The European Union says it'll offer funds - its foreign policy chief Catherine Ashton was travelling to Kiev for talks. Immediate aid of 600 million euros could be on the table, with another two billion possible if a deal is reached - as could be the prospect of eventual EU membership. But Ukraine needs a stable government to sign deals - and EU membership may be a far cry for a country still in turmoil. Alastair McCaig of IG. SOUNDBITE (English) IG MARKET ANALYST, ALASTAIR MCCAIG, SAYING: ''It does raise the question as to how firmly behind as a nation they can be as far as integration with the EU is concerned. So I think there's going to be lots of twists and turns for this going forward. And I think it's still got, they've got to sort themselves out first before looking further afield.'' Russia's intentions are another unknown. Its policy on Ukraine now in tatters, it's withholding a two billion dollar tranche of its 15 billion dollar bailout. But so far, is mostly remaining silent. With rising trade and budget deficits, Ukraine is estimated to need 35 billion dollars to stay afloat. Edward Hadas of Reuters Breakingviews. SOUNDBITE (English) EDWARD HADAS, ECONOMICS EDITOR, REUTERS BREAKINGVIEWS, SAYING: ''If the Russians, who have been supporting or promised to support the country, withdraw their support, then the numbers could rise some more. And it's going to take take several years - this is a country in very bad condition - it's going to take several years before it can reach towards balance, so we're talking about a quite large amount of money by EU standards for a rescue fund.'' In Ukraine, meanwhile, more signs of the lavish lifestyle of ousted President Yanukovich. These cars, said to belong to his son, are valued at around two million dollars. Although this one alone may have cost over half a million - in a country where the average salary is less than 500 dollars a month.

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Ukraine needs a big fix

Monday, February 24, 2014 - 02:21