Ukraine in deep economic and political crisis
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Ukraine has become another country in Europe seriously hit by economic crisis. The stock market has plunged by nearly 80% this year. Last week the hryvnia, the national currency, hit a seven-year low against the dollar. This is very threatening for the economy, since many credits were taken in hard currency (dollars) and, therefore, it will be increasingly hard to pay them off both for businesses and individuals.
The sixth-largest bank, Prominvestbank, was nationalized to be saved from bankruptcy. The bank system has also come under threat, after in October the panicking population took deposits worth 20 billion hryvnas (around 3.5 billion dollars) out of banks.
Furthermore, the demand on steel making up a lion’s share of Ukraine’s export has recently drastically fallen worldwide. Therefore, steel and metal industries face large job cuts which might seriously aggravate the economic situation in the industrial backbone of Ukraine – the East. An expert of the International Center of Strategic Studies based in Ukraine Ildar Gazizulin claims that due to the financial crisis, unemployment in Ukraine may raise up to 8%. Employees in metallurgy, construction and banks will be most affected.
The IMF is ready to provide a huge loan package of USD 16.5 billion to ease the effects of the global financial crisis. However, the condition is that Ukraine’s parliament approves a package of measures aimed at tackling the crisis. Yet the politicians don’t show a willingness to compromise – representatives of the Bloc of Yulia Tymoshenko are blockading parliamentary proceedings again, protesting against the bill to finance early parliamentary elections. Competing packages of financial measures have been drawn up and it is not clear which of them is to be passed.
Meanwhile trust in all current leaders of Ukraine has drastically fallen. According to the latest sociological polling, the rating of the President Viktor Yuschenko has plunged down to a stunningly small figure – 4.1 %! But the ratings of his main potential rivals at the presidential elections next year have also slumped – Viktor Yanukovych is supported by 18.8 %, Yulia Tymoshenko – by 16.7 %. It is important that almost one third of voters is disappointed in all current leaders - 20.9% admitted they would not go to presidential poll if it took place now, and 16.2% are undefined. It is clear that the demand for a new political elite is higher than ever. It might happen that the economic recession and quickly deteriorating living standards of Ukrainians will sweep off all major politicians of today – both the leaders of the Orange Revolution and their rivals. And who’s to come next?
