Ukraine: First snowfall already turning to slush

By Conal Campbell of

The week started with twin signs of optimism with the government of Mykola Azarov resigning (with the hope being that he may be replaced as PM by National Bank governor and relative liberal Sergiy Arbuzov) and announcement of an official IMF visit aiming to restart cooperation to help Ukraine meet its $10bn of sovereign external debt maturing next year. However, much like the snow that everyone seemed to briefly enjoy when it arrived early in the week, by the weekend everything had turned to slush.

Firstly, just to remind everyone of the root of all problems, Transparency International released its annual Corruption Perceptions Index, ranking Ukraine 144th in the world (Belarus – 123rd; Russia -133rd). Secondly President Yanukovych announced that 64-year-old Azarov may well be reappointed PM (with his opposition to IMF-required domestic gas price hikes being well known). The final disappointment of the week was the news that Kiev has requested a delay of the IMF mission so that the new government can get its feet under the table, leading many international investors to again sigh that Ukraine’s leaders “just don’t get it” (but were I to also be worth tens of millions of dollars like Ukraine’s leaders I wouldn’t lose too much sleep on the issue either).

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