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Ukraine Grapples With Vacant Presidential Post, Poor Economy

Ukraine faces bankruptcy if it cannot raise billions of dollars within the next few months. An offer of aid from Moscow, made before the revolution, now appears to be in doubt.

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And I'm David Greene, good morning.

There is still uncertainty hanging over Ukraine. The country still has no new government after the ouster of President Viktor Yanukovych. The European Union's foreign policy chief is in Kiev voicing support for Ukraine's acting leadership. But as much as Ukraine needs political support, the country also needs money. A $15 billion bailout from Russia is now in doubt because Russia says it won't move forward until a stable government is in place.

Members of Parliament say they hope to appoint a new government by Thursday, and that government's first task will be dealing with an imminent economic crisis.

We begin with NPR's Peter Kenyon in Kiev.

(SOUNDBITE OF SINGING)

PETER KENYON, BYLINE: The faithful are still filling Independent Square. An older crowd gathers around traditional drummers who for a half-remembered old Cossack song, while others bring flowers for the memorials marking the scores of people killed last week. Some of these people want to be here when ex-President Viktor Yanukovych is arrested. But many stay to urge their leaders to finally lift their country out of the swamp of corruption and incompetence that has Ukraine drowning in debt.

Oleksiy Karaulny, a long-time opposition supporter, says the freedoms people are calling for here include freedom from foreign lenders. But right now Ukraine needs to reach out, cap in hand, once more.

OLEKSIY KARAULNY: (Through Translator) Now our economy needs support from Europe and the West and starting an economic engine may take years. So we need stability to give it a chance to work.

KENYON: The International Monetary Fund is making no promises, only saying it's ready to talk. Washington and London say they will help but no figures have been announced. Ukraine's acting finance minister says the country need $35 billion by the end of next year just to keep up with debt payments, and he called for an urgent donors' conference. Ukraine has already had an IMF loan, which came with requirements for financial reforms and belt tightening, most of which Yanukovych ignored, Ukrainians say.

Then the Pro-Russian Yanukovych rejected an EU trade agreement and was rewarded with a $15 billion aid package from Moscow. But after paying the initial three billion, Russia halted the aid.

The business community is watching warily. Edward Klaeger has run an alternative energy company in Ukraine for more than eight years. He says the toppling of Yanukovych likely ended Russia's willingness to bail Ukraine out, and it's not just the direct aid that may now be lost.

EDWARD KLAEGER: Nobody knows what will happen with the remaining Slovene and U.S. in aid that was promised to Ukraine, and then also their 30 percent discount on their natural gas.

KENYON: That discount was part of the bailout Moscow offered to Ukraine. Russia has not announced the end of the lower price, but Ukrainians fear that will come. And Klaeger says Russia could also squeeze Ukraine in other ways, by blocking agricultural imports or calling in debts.

KLAEGER: Two point sixty-three billion U.S. is owed by a Ukrainian state gas company, Naftagas, to Gasprom. Ukraine does not have the money and Naftagas doesn't have the money - it's a state owned enterprise. And then they can always increase the price of natural gas to Ukraine, which, in this area, Ukraine has really no options.

KENYON: Brian Mefford, an American political consultant in Kiev, says the new government has a lot to do very quickly. It will first have to confirm how much is left in reserves and how much money has left the country. And then it must convince Western lenders that while at the moment Ukraine is showing many signs of being in a pre-default state - as the acting finance minister put it - the country is still a relatively good bet for a rescue package.

BRIAN MEFFORD: Credit card terminals around the country are virtually not working. There's a shortage of dollars and euros. Clearly they're going to need an IMF and European-U.S. bailout package. I think we're talking about 35 billion over the next two years - not a small sum. But in comparison to the $150 billion bailout for Greece, that gives you an idea of what amounts we're talking about.

KENYON: Ukraine's election commission has set out a timeline for presidential elections on May 25th. The winner can only hope he or she has a solvent, sovereign country to work with.

Peter Kenyon, NPR News, Kiev. Transcript provided by NPR, Copyright NPR.

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