Ukraine Gets Loans From 2 Countries

ReutersTymoshenko and her ministers singing Ukraine's national anthem during a new parliament session on Tuesday.
KIEV -- Ukraine, which needed aid from the International Monetary Fund to avert a default, has secured new loans from two countries to cover its budget deficit this year, Prime Minister Yulia Tymoshenko said Tuesday.

Ukraine is in talks with six "powerful and financially stable countries" on loans to cover the 2009 deficit of "slightly over" 2 percent, Tymoshenko said at a government meeting. Two have agreed, she added, without offering further details.

Eastern Europe's economies are being hit by the global financial crisis, which curbs demand for their exports while investors shun emerging-market assets, making it difficult to finance budget deficits.

Ukraine secured a $16.4 billion stabilization loan from the IMF in November.

Lawmakers on Dec. 26 approved the 2009 state budget, which would have a deficit of 2.97 percent of gross domestic product. That would violate the terms of the IMF loan, which call for a balanced budget.

Tymoshenko's government does not want to revise the budget, which is "being fulfilled as planned," she said Tuesday.

President Viktor Yushchenko called on the government to revise the budget, however, saying it was unrealistic. The government should balance spending and revenue to avoid "surging inflation and social catastrophe," he said Jan. 30.

Ukraine's opposition lawmakers physically blocked legislators from entering the parliament Tuesday until they won a promise to hold a no-confidence vote against the government on Thursday.

The Party of the Regions, led by pro-Russian Viktor Yanukovych, barred entrance to the assembly during the morning, hampering the opening of the first session following a holiday.