IMF yanks Ukraine back over its free-spending habits

By Daily Maverick Legacy 11 December 2009

The International Monetary Fund is holding back its latest $3.5 billion tranche of a $16.8 billion loan to the Ukraine, saying the country’s politicians can’t seem to control their budgetary spending. There’s a presidential election next month, so the IMF is sending a clear message to old rivals, President Viktor Yushchenko and Prime Minister Yulia Tymoshenko, to get their acts together. As opponents in the upcoming election, each has tried to show more largesse than the other. But while the voters may think it’s Christmas, the Ukraine is struggling with the worst economic crisis in nearly 20 years. The economy is expected to shrink by a massive 15% this year. Despite that, Yushchenko last month decided to dole out wage and pension increases of about 20%. The IMF said this would quickly feed inflation and unemployment. This means the dole-out would rapidly become the dole for many workers. Read more: The New York Times

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