Russia Says No To Ukraine $5 Billion Loan Request

MOSCOW, Russia -- Russia has decided not to lend Ukraine $5 billion, Deputy Finance Minister Dmitry Pankin told Reuters on Wednesday.
Ukraine asked for the funds in February to help its economy withstand the economic downturn and help pay for Russian gas."They proposed to borrow and the decision to offer such a loan was not made ... We analysed the situation and we said no," Pankin said, speaking in English.Ukrainian President Viktor Yushchenko, swept to power by the pro-Western "Orange Revolution" mass protests, has strained ties with Russia which fiercely opposes his goal of Ukraine joining the NATO military alliance.Europe, which depends on Russia for a quarter of its gas, is closely watching turbulent relations between Moscow and Kiev for signs of any future threat to European energy security.Ukraine received a second IMF loan tranche worth $2.625 billion last week, part of a $16.4 billion loan programme. It had been held up for three months in a dispute over budget policies.Pankin also said Russia had not made a decision about whether to loan money to Iceland, which asked for funds last autumn."About Iceland we didn't take any decision up to now. There are some questions about Iceland's financial situation ... And the second part of the story is that when we started our discussion then it was a different financial situation for us, we expected that our problems would not be so serious," he said."The question for us is are we ready to invest our National Wealth Fund in a not very liquid instrument ... I cannot say it is off the table but (it is) still under analysis."Iceland's economy nearly collapsed last year under the weight of billions of dollars of foreign debts, racked up by its now bankrupt banks, forcing it to take a $10 billion IMF-led rescue package.