Ukraine's interim government said the country needs $35 billion of financial assistance to avoid default as it issued an arrest warrant for fleeing ex-President Viktor Yanukovich for his role in last week's violence.
Lawmakers in Kiev are working on a coalition government after ousting Yanukovych from the presidency, while the US and the European Union have pledged aid for a new cabinet. Yanukovich and others were placed on a wanted list for their role in violence that killed at least 82 people last week. Ukrainian assets gained.
"The situation in the financial sphere in general is difficult but controllable," acting Finance Minister Yuriy Kolobov said on the government body's website. The ministry and the central bank are working around the clock to shore up the financial system, he said. With protesters in control of the capital, Yanukovich's opponents face a contentious period after the release from prison of former Prime Minister Yulia Tymoshenko, who vowed to return to the fractured political scene before a presidential election May 25.
While a new government needs to be established before Ukraine can receive aid, the first payments may arrive next week, Elmar Brok, the head of the European Parliament's foreign affairs committee, told reporters in Kiev today.
Bonds gain
Ukrainian assets have benefited from the momentum for financial aid, with the yield on the government's dollar bond maturing in 2023 falling 84 basis points, or 0.84 percentage point, to 9.36 per cent, the lowest since January 28. The UX Index of stocks soared 9 per cent, the most since 2012.
Cause of unrest in Ukraine
Kolobov proposed calling an international conference of donors with the European Union, the US and other countries, according to the statement.
The $35 billion financing package is needed for this year and next, the ministry estimated.
Mykola Tomenko, a member of Tymoshenko's Batkivshchyna party, said she was a candidate for the premiership, along with party leader Arseniy Yatsenyuk and billionaire ex-Economy Minister Petro Poroshenko.
Tymoshenko, who was imprisoned more than two years ago for abuse of power, later ruled out the role for herself, as did Vitali Klitschko, who heads the UDAR party.
Parliament Speaker Oleksandr Turchynov, handed presidential powers as the government is being formed, warned late yesterday that the economy was in a "pre-default situation." Ukraine's economy "is spinning out of control," he said on the parliament's website.
'Stop slide'
"The new government's task is to stop the country's slide, to stabilise the currency rate, to ensure timely salary and pension payments, to win back investors' trust, and to create new jobs," he said. "Another priority is to return to the European integration path."
The Yanukovych administration in 2012 started negotiations for a $15 billion International Monetary Fund bailout, the country's third since 2008. Talks stalled as the government rejected demands by the Washington-based lender to cut household heating subsidies. The fund's most recent mission left Kiev in October, when the two sides said discussions were continuing.
Ukraine needs to renew the program immediately after its Treasury was "robbed," Yatsenyuk, the head of Tymoshenko's party, said at a parliamentary committee meeting today. The new government will ready for "unpopular, but necessary reforms, according to Yatsenyuk, who also called for a change of leadership at the central bank.
Nation Divided
Ukraine spiralled into crisis in November when protesters took to the streets to oppose Yanukovych's rejection of a deal to deepen ties with the EU. Violence crested last week in fighting in central Kiev before a peace agreement brokered by EU foreign ministers ended the clashes and triggered Yanukovych's flight from Kiev.
Yanukovych went to Crimea in southern Ukraine after his plane in the eastern city of Donetsk was denied permission to leave the country, acting Interior Minister Arsen Avakov said on his Facebook page. Stopping at a private residence also in the country's south, Yanukovych was denied entry by state guards and departed ''in an unknown direction in three cars," he said.
"A criminal case was opened into the mass murder of civilians," Avakov said. "Yanukovych and other officials have been declared wanted."
IMF Pledge
With western nations and Russia tussling for sway over the country of 45 million people, the IMF is ready to help Ukraine "not only from a humanitarian point of view but also from an economic point of view," Managing Director Christine Lagarde told reporters in Sydney following a meeting of Group of 20 officials yesterday.
German Chancellor Angela Merkel called on the new leadership to ensure the country's unity, government spokesman Steffen Siebert said in Berlin. Ukraine needs a "multinational" financial assistance program, including the IMF, Siebert said.
Treasury Secretary Jacob J. Lew said the U.S. was prepared to help Ukraine return to a path of democracy, stability and growth. U.K. Chancellor of the Exchequer George Osborne agreed.
"We are here ready to help just as soon as there is someone at the end of the telephone," Osborne said in an interview yesterday in Sydney. "We should be there with a checkbook to help the people of Ukraine rebuild their country."
Ashton Visit
The EU's foreign policy chief, Catherine Ashton, will travel to Ukraine today to meet party leaders. Russia halted a $15 billion bailout for its neighbor after the unrest and talks on resumed financing may continue only after a new government is formed, RIA Novosti reported yesterday, citing Russian Finance Minister Anton Siluanov in Sydney.
In Ukraine, the political crisis polarized sentiment between its western and central regions bordering the EU and those in the south and east that are home to more Russian speakers and ethnic Russians.
While people toppled Vladimir Lenin's statues across the country in protests, according to Ukraine's Channel 5, more than 2,000 rallied for closer ties with Russia in the southern city of Odessa. In Kerch, also in the south, marchers replaced a Ukrainian flag at the mayor's office with Russian and Crimean flags, the Unian news service reported.
The opposition is following the lead of "armed extremists and thugs whose actions pose a direct threat to the sovereignty and constitutional order in Ukraine," Russian Foreign Minister Sergey Lavrov said in a statement On Feb 22.
White House National Security Adviser Susan Rice said the U.S. would work with European partners to help finance Ukraine's economic recovery, while warning Russia that any insertion of its troops would be "a grave mistake."
"It's not in the interests of Ukraine or of Russia or of Europe or of the United States to see the country split," Rice said on NBC's "Meet the Press" program.
