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New talks to help solve Ukraine crisis

Monday, December 29, 2014 - 01:50

Ukraine's President says he will meet leaders of Russia, France and Germany on Jan. 15 in an attempt to restore peace to Kiev's eastern territories. As Sonia Legg reports he acknowledged Kiev lacked the resources to regain control by military means.

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The tree lights are on in Donetsk's central square but there's little festive cheer. Even the approaching new year isn't offering seasonal street sellers much opportunity. (SOUNDBITE) (Russian) DONETSK STREET SELLER, INNA, EXPLAINING WHY HER BUSINESS IS NOT PROFITABLE, SAYING: "People have no money and nothing to eat. The government should take care of us. We have empty fridges back home." Eastern Ukraine's main city remains in the hands of pro-Russian rebels - food parcels are the only way many can survive. (SOUNDBITE) (Russian) DONETSK RESIDENT, VALENTINA FEICHENKO, SAYING: " How I will celebrate New Year? Like I did during the (Second World) war. I was eight then. I have bought some cabbage, I will make some lenten borsch, what else can I do?" A year of revolution and war has crippled Ukraine's economy - it's forecast to shrink by 4.3% next year. Foreign currency reserves have more than halved since the beginning of the year to a 10-year low. Gas debt repayments to Russia and efforts to support Ukraine's struggling currency the main drain. A new budget has just been approved. But it won't be popular - one new law will add a 10 percent duty to taxes on food imports. It's all designed to show Ukraine can stick to an austerity programme - as it prepares to make a case for an increased IMF bailout. Chris Beauchamp is a market analyst at IG. SOUNDBITE: IG Market Analyst, Chris Beauchamp, saying (English): "It's almost certain that the IMF will need to find more cash to keep Ukraine going. It is an economy in a similar situation to Russia - the impact of external events has weighed so heavily here it is going to take a long time for them to find good solid economic growth." Ukraine has so far received two tranches of aid worth $4.6 billion - that's less than a third of the package agreed in April. A new IMF mission is due to visit in mid-January - around the time President Poroschenko says he will meet the leaders of Russia, France and Germany to try again to restore peace.

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New talks to help solve Ukraine crisis

Monday, December 29, 2014 - 01:50