West rushes to save Ukraine from 'abyss'

A man holds a Ukrainian flag as he stands on Kiev's Independence Square.

LONDON - Western governments are scrambling to contain the fallout from Ukraine's revolution, offering political support, money and even eventual membership of the European Union in a bid to avoid further instability.

Two critical tasks are already pressing for immediate attention: The formation of a new government following the ouster of former president Viktor Yanukovych, and financial aid.

Ukraine's Finance Ministry on Monday appealed for urgent help, saying it needed US$35 billion (S$44 billion) over two years to stop the economy from tipping "into the abyss". Interim Finance Minister Yuriy Kolobov called on Western countries and the International Monetary Fund (IMF) to convene a donor conference in the next two weeks.

There is also the matter of forming a new government. Mrs Yulia Tymoshenko, the former prime minister and opposition leader, has spent her first hours of liberty after her release from jail huddled in talks with the US and EU ambassadors to Ukraine. But Mrs Tymoshenko, who has her eyes on the presidency, remains a controversial figure and may be persuaded not to assume a formal role at this stage.

However, all other opposition leaders have less experience than Mrs Tymoshenko in running a national administration.

Mr Vitali Klitschko, a former world heavyweight boxing champion and the darling of the street protesters, is clearly a front runner for the prime minister's job. So is Mr Arseniy Yatsenyuk, Mrs Tymoshenko's deputy and the manager of her party in Parliament. He has the added advantage of previously serving as foreign minister and as deputy governor of the national bank.

Much more tricky, however, would be to include the leaders of the fervently nationalist Svoboda (Freedom) Party or the populist Right Sector, who were also at the forefront of the street protests. Both are suspected of authoritarian tendencies.

Complicating the formation of a government is uncertainty over the fate of Mr Yanukovych's Party of the Regions. The party has already split, but its deputies continue to vote in Parliament.

Yet, nobody doubts that a new government needs to be sworn in urgently, for Ukraine's precarious finances brook no delay.

Its hard-currency reserves have halved, from US$35 billion to US$17 billion, since the political crisis began last November, and the nation needs to borrow US$2 billion by the end of this month and another US$11 billion by the end of the year just to keep up its debt repayments.

"The International Monetary Fund is ready to help Ukraine not only from a humanitarian point of view, but also from an economic point of view," IMF managing director Christine Lagarde said at the weekend. It was a pledge that British Chancellor George Osborne reinforced on Monday during a visit to Singapore.

"We should be there ready to provide financial assistance," he said, hinting that apart from IMF money, individual government loans will also be considered.

Other European leaders are even willing to contemplate Ukraine's eventual membership of the EU.

"We are at a historical juncture, and Europe needs to live up to its historical moment and be able to provide Ukraine with an accession perspective in the medium to long term," said Mr Olli Rehn, the official responsible for the EU's economies.

But, at least for the moment, the main task for Ms Catherine Ashton, Europe's foreign policy chief who arrived in Kiev on Monday, is to persuade opposition leaders to abandon the barricades, shed their revolutionary attire and get on with the business of governing. For, as Mr Osborne put it, all the promised assistance ultimately depends on having "someone at the end of the telephone".

Jonathan.eyal@gmail.com

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