Ukraine Factions Unite To Secure IMF Loan

KIEV, Ukraine -- Ukraine’s Parliament put aside weeks of political infighting on Wednesday to pass legislation aimed at securing an emergency loan from the International Monetary Fund as the country feels the effects of the global financial crisis.
The party of the prime minister, Yulia V. Tymoshenko, had put forward its own legislation. But it said it was burying its differences with the president, Viktor A. Yushchenko, and would vote for his proposals in order to secure the funds, which are needed to prop up the country’s ailing markets and relieve pressure on the public finances.“Now we have put our political ambitions off to the side,” said Nataliya Korolevskaya, a member of Ms. Tymoshenko’s party. “The health of the economy is now more important.”Together, the two parties have 227 votes, enough to secure the passage of the legislation in the 450 seat Parliament.Ukraine’s economy has been struggling, especially because of falling steel prices. The IMF is offering Ukraine a loan of as much as $15 billion to shore up the country’s finances as foreign investors flee, but requires a series of belt-tightening measures and spending cuts.In recent weeks, a delegation from the fund has been meeting with representatives of Ukraine’s prime minister and president, seeking assurances that next year’s budget will be balanced,However, the political differences between Mr. Yushchenko and Ms. Tymoshenko had threatened to derail agreement.The two have alternately collaborated and competed since they rallied crowds together on Independence Square in Kiev during the protests known as the Orange Revolution in 2004. Most recently, Mr. Yushchenko’s Our Ukraine bloc was in a coalition with Ms. Tymoshenko’s party, an arrangement that gave her the prime minister’s post.But the two split after the Russian invasion of Georgia in August. Mr. Yushchenko accused Ms. Tymoshenko of muting her criticism of the Russian military action to please the Kremlin. He has also been more vocal in his support of Ukrainian membership of NATO.The political turmoil has coincided with a steep economic decline. The international agency Fitch Ratings downgraded Ukraine’s sovereign debt rating and issued a negative outlook for the country.A Ukrainian shipping company, Industrial Carriers, has gone bankrupt. The government has frozen rail tariffs for steel companies, and as foreign investment dries up, speculators are betting on a decline in the national currency.In response, Ukraine plans to nationalize some commercial banks, which have liquidity problems, a member of Parliament told the IMF delegation on Friday.