Extreme Right Gains Ground As Ukraine Falls Into Crisis

MOSCOW, Russia -- Europe's economic crisis has allowed the extreme right in Ukraine to capitalise on the turmoil engulfing the former Soviet republic.
An unexpected regional election victory by a previously marginal ultra-nationalist party is among a string of developments in Ukraine that threaten to fulfil the worst fears of G20 leaders as they gather for their summit in London.Lacking the protection of European Union membership, Ukraine has few of the safeguards that prevent its Western neighbours from falling into ruin.A sharply weaker currency, a collapse in exports and an economy expected to contract by at least six per cent this year has forced the country to seek £11 billion from the International Monetary Fund. Even this lifeline is endangered by a poisonous feud between President Viktor Yuschenko and Yulia Tymoshenko, the prime minister.The two rivals led the Orange Revolution in 2004, before falling out in spectacular style. As Mrs Tymoshenko plots to take Mr Yuschenko's job, ordinary Ukrainians are showing signs of rejecting them both.On March 15, voters in the Ternopil region of western Ukraine elected a new regional assembly. This was an Orange Revolution bastion, a region that has long sought to embrace the West and shun Russia.But it is also has Ukraine's highest unemployment. In a crowded field, the previously little-known Freedom Party won 50 of the regional assembly's 120 seats as voters embraced its hard Right leader, Oleg Tyagnibok, who has urged the expulsion of all Jews and Russians from Ukraine."The problem is less the popularity of the nationalists than the universal disappointment with mainstream parties," said Viktor Chumak, a political scientist in Ukraine's capital, Kiev. "Voters are sympathising with radicals more and more as a result of the crisis."So concerned are the authorities with the Ternopil result, which they claim was rigged, that commentators are predicting the presidential election could be postponed. Some commentators even say that the constitution may be changed so that the president is chosen by parliament rather than by the people.Critics argue that mainstream politicians - both the squabbling Orange Revolution ruling alliance and the equally discredited pro-Russian opposition - only have themselves to blame because of their failure to give a lead in a time of crisis.As the danger of political radicalism grows, Ukraine is in danger of formal bankruptcy. Oleksandr Suhonyako, the president of the Association of Ukrainian Banks, gave warning that the country could default on its sovereign debt because of political division and ineptitude."In a way, the crisis in Ukraine is less an economic one than a political one," he told the Daily Telegraph. "The key political leaders do not understand how to lead the country out of crisis. If the political crisis continues, we could see the worst case scenario. The threat of sovereign default is there."The country's government debt, at only 20 per cent of GDP, is well below the recognised danger threshold. The main concern is over corporate debt, with fears that banks could collapse, triggering crises in the financial sectors of western European countries like Austria, which is significantly exposed to Ukraine.Earlier this month, Western diplomats and politicians forced Mr Yuschenko and Mrs Tymoshenko to pledge to work together to fulfill the IMF's conditions for the rescue package.The prime minister, however, quickly reneged. On the day she pledged to use her parliamentary majority to pass the laws recommended by the IMF, Mrs Tymoshenko instead marshalled her forces to sack the foreign minister, one of the president's most important allies.The IMF's money is still being withheld.