Ukraine Joins The Swooning Bout And Heads For The IMF

Ukraine has joined the growing list of Eastern European countries who have now entered some form of “consultation” process with the IMF and today formally requested “systemic support” and “active cooperation” from the fund. The government will meet with IMF representatives in the “coming days,” according to a statement from First Deputy Prime Minister Oleksandr Turchynov. He declined to give further details about Ukraine’s request.

“Now, the IMF is coming and the Finance Ministry is starting to work with them actively,” Turchynov said. The IMF will meet the Prime Minister Yulia Timoshenko “to discuss the financial system’s stability.”

Contracts on Ukraine’s debt were today being traded at 1,500 basis points,as compared with 440 on Russia and 337.5 on Hungary, according to CMA Datavision in London.

Even as late as yesterday central bank Governor Volodymyr Stelmakh had been saying IMF help wasn’t needed. The banking system is “normal and reliable,” he said in an interview.

All the relevant background and analysis to this situation can be found in this post which I put up on Sunday.

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About Edward Hugh

Edward 'the bonobo is a Catalan economist of British extraction. After being born, brought-up and educated in the United Kingdom, Edward subsequently settled in Barcelona where he has now lived for over 15 years. As a consequence Edward considers himself to be "Catalan by adoption". He has also to some extent been "adopted by Catalonia", since throughout the current economic crisis he has been a constant voice on TV, radio and in the press arguing in favor of the need for some kind of internal devaluation if Spain wants to stay inside the Euro. By inclination he is a macro economist, but his obsession with trying to understand the economic impact of demographic changes has often taken him far from home, off and away from the more tranquil and placid pastures of the dismal science, into the bracken and thicket of demography, anthropology, biology, sociology and systems theory. All of which has lead him to ask himself whether Thomas Wolfe was not in fact right when he asserted that the fact of the matter is "you can never go home again".

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