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Ukraine Parliament Fails To Act On IMF Credit


KYIV (Reuters) -- Ukraine's parliament, mired in a long-running political row over a snap election, failed again on October 28 to consider legislation needed to secure an IMF bailout program of credits worth $16.5 billion.

Supporters of Prime Minister Yulia Tymoshenko, who opposes the election, charged up to the chairman's rostrum to prevent what they suspected would be a move to put election finance on the agenda alongside the IMF legislation.

Chairman Arseniy Yatsenyuk acknowledged deadlock over the agenda. He scolded deputies for blocking debate -- and approval of the International Monetary Fund credit officials say is needed to stabilise Ukraine's financial and banking systems.

"Everything came down to what was supposed to be examined first -- measures to tackle the crisis or a bill on holding an early election. And that's where matters have ended," he said.

"I understand that adopting the package of measures will not save us from everything ... We cannot subdue the economic and political crisis entirely. But let's set down as a priority the economic and political baselines."

Parliament, the chairman said, would be called into session on October 29 to approve the measures in a first reading. Parties would then submit proposals for a second and final reading.

Yatsenyuk had asked deputies to consider a compromise package to satisfy what are believed to be IMF demands for the credit. Analysts say these include a balanced 2009 budget, greater currency flexibility, and banking sector reforms.

The IMF and the government announced preliminary agreement on the loan package at the weekend. The Fund has made no comment on what conditions it has set and it was unclear whether the package under consideration met the demands.

Markets remained unimpressed by the agreement. The hryvnia currency traded at 6.3-6.4 to the dollar, close to its all-time low, despite daily central bank intervention.

Ukraine was pitched into its latest bout of political upheaval by President Viktor Yushchenko's dissolution of parliament last month and call for a December election, which would be the third in as many years in the ex-Soviet state.

Both Tymoshenko and Yushchenko, allies from the pro-Western 2004 "Orange Revolution" now turned rivals, want quick adoption of the anti-crisis measures to secure IMF help.

A government statement said Tymoshenko and IMF Managing Director Dominique Strauss-Kahn had spoken by telephone, urged parliament to act promptly and called for political stability.

But Tymoshenko says an election would be "criminal" amid the world crisis. Her allies vow to disrupt debate until they get assurances no move will be made to finance the contest.

Yushchenko blames the premier for the collapse of the latest governing "orange coalition" and says only an election can solve the impasse.
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