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Financier's warning to EU over Ukraine

Thursday, January 08, 2015 - 02:07

Billionaire financier George Soros has urged the West to step up aid to Ukraine in order to protect itself against an increasingly aggressive Russia. As Sonia Legg reports his comments come as Ukraine's Prime Minister meets the German Chancellor in Berlin.

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Ukraine has made no secret of its financial predicament since Russia invaded Crimea. And the IMF has already agreed a $17bln aid package. The Prime Minister is paying for it with reforms. During a visit to Berlin he was keen to share his achievements. (SOUNDBITE) (Ukrainian) UKRAINIAN PRIME MINISTER, ARSENY YATSENIUK, SAYING (ACCORDING TO OFFICIAL GERMAN TRANSLATION): "We are successfully fighting corruption in the energy sector. We don't have any billions wandering into the pockets of oligarchs. We are working openly and we are buying gas with the help of transparent contracts from German and European companies." Last month the IMF identified a further $15bln funding gap. But no new money is being offered. That says billionaire financier George Soros is a mistake. Writing in the New York Review of Books he said western leaders are underestimating the threat to the EU. A weak Ukraine, he argues, fuels Russian nationalism, making Putin stronger and less likely to buckle under the pressure of sanctions. He believes as much as $50bln is needed to prop up Ukraine. But CMC Market's Michael Hewson says reform must come first. (SOUNDBITE) (English) CMC MARKETS, MICHAEL HEWSON, SAYING: "It is all very well for Mr Soros to basically pluck this number out of the air but how do we know that that will be the end of the matter? How do we know that two or three years down the line after the two bailouts that they have had already that essentially we are not sinking more money into a black hole" Hungarian born Soros has a vested interest in Ukraine - he established a foundation there in 1990. But his wake-up warning will be welcomed by Ukraine's leaders. "Assisting Ukraine should be seen as a defence measure by European countries," he said. "The US and the Europeans are determined to avoid a war but unless they balance sanctions with support for Ukraine they may well have one" Merkel's unlikely to be too influenced by his comments - but she is keen to resolve the crisis. She's hoped a meeting of key foreign ministers can be arranged in the near future before the economic situation in both Ukraine and Russia gets even more precarious.

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Financier's warning to EU over Ukraine

Thursday, January 08, 2015 - 02:07