Category: Eastern Europe

As prices of Ukraine’s chief exports continue to fall, uncertainty has arisen as to whether the Ukrainian government can continue to meet the stipulations of the International Monetary Fund’s (IMF) next installment of a US$16.4 billion loan.

The European Central Bank (ECB), nine leading international banks that operate in central and eastern Europe have gathered together to ask for help in the region, according to the Businessweek.

The banks argue that funds to boost liquidity and restart lending should not be limited to the new EU member states however, but instead should also be offered to states beyond the bloc, such as Serbia and the Ukraine. “We fought for 50 years, many of us, to get these countries away from communism and now we have a free market economy in the region, we can’t leave them alone when there is an extremely harsh wind blowing,” Herbert Stepic, chief executive of Raiffeisen International.

Civil unrest is spreading in eastern Europe as the economic crisis hits the region harder than western states, with anti-government riots kicking off in Lithuania and Bulgaria in recent days and with Estonia and Hungary at risk, reports EUObserver.

The riots are not isolated events but a wave of predictable reactions to the economic crisis, Dorothee Bohle, a political scientist at the Central European University in Budapest told the EUObserver. “After a few years of relatively high growth and social advancement, it’s all come to an abrupt end and they’ve been slapped with a very harsh austerity package,” she said. “This is essentially a return of the ‘IMF riots’ we were used to from Latin America in the eighties and nineties.”

Turkish President Abdullah Gul joined the leaders of Azerbaijan, Georgia, Lithuania, Poland and Ukraine for an energy meeting three months after Russia dropped bombs close to a crucial pipeline through the Caucasus state of Georgia in a brief war the AFP reported.

Amid renewed criticism of Russia by Georgian President Mikheil Saakashvili, Gul steered clear of inflammatory rhetoric towards Turkey’s historical rival Moscow.

However, Gul emphasised NATO member Turkey’s desire for a greater diplomatic role in the region, after his government earlier proposed a new forum for cooperation in the South Caucasus.

“The crisis which broke out last August in Georgia confirmed that unsolved conflicts in the region constitute a major threat from the perspective of security and stability,” he said.