KIEV, Ukraine (AP) — The president’s office says Ukraine has received enough donation pledges to begin construction of a new shelter over the site of the world’s worst nuclear disaster.
Foreign Minister Kostyantyn Hryshchenko was quoted Tuesday as telling President Viktor Yanukovych that work on the euro740 million ($1.04 billion) project at the Chernobyl nuclear plant can begin this year and should be completed in 2015.
Watchdog warns of official hostility towards journalists amid loss of TV station licences and mystery over fate of investigative reporter
The erosion of press freedom in Ukraine has been linked to the disappearance of journalist Vasyl Klymentyev, above, last month. Photograph: Petro Matvienko
It was 8.55am when the investigative journalist Vasyl Klymentyev set off from his home in Kharkiv, Ukraine’s second city. As editor-in-chief of Kharkiv’s Novy Stil (New Style) newspaper – a small publication known for unearthing juicy scandals about corrupt local officials – Klymentyev had many enemies and was rather cautious. He set the burglar alarm.
What happened next on that morning in early August is a matter of speculation. The one fact everyone agrees on is that Klymentyev vanished. His family reported him missing the next day and Kharkiv police opened a murder inquiry. His friends are convinced he is dead, though so far there is no body. On 17 August a boy discovered his mobile phone and keys in a small rubber boat floating in a rural reservoir.
For journalists, Klymentyev is a chilling symbol of how press freedoms are being curtailed in Ukraine seven months after the election of Viktor Yanukovych, the country’s new pro-Russian president. Yanukovych, his critics say, has set about reversing the gains of the 2004-10 Orange Revolution, in which newspapers and TV flourished. Reporters talk of a new era of fear and censorship.
Last week Kiev’s district court stripped two independent opposition television stations, TVi and 5 Kanal, of their licences. TVi has fallen off the main airwaves, while 5 Kanal – which came to prominence with its coverage of the 2004 pro-democracy demonstrations – has had its audience severely reduced. The winner is Valeriy Khoroshkovsky, owner of the pro-Yanukovych Inter Media television empire – and head of Ukraine’s SBU security service.
In a report last week the watchdog Reporters Without Borders (PDF) said broadcast media pluralism in Ukraine was being “seriously eroded”, warning of a “disturbing level of hostility towards journalists on the part of the authorities”, including “physical attacks”.
Ukraine’s apparent lurch towards authoritarianism has alarmed EU leaders and MPs. Germany’s chancellor, Angela Merkel, expressed her concerns during a visit to Kiev last week.
“We are going back to the USSR,” Petro Matvienko, the deputy editor of Novy Stil, said last week. “In the USSR the [Communist] party was in charge. Now we are in the hands of a criminal totalitarian gang. It’s worse.”
Dangerous investigation
Matvienko said he was certain Klymentyev was dead, killed by someone whose interests he had crossed. Shortly before his disappearance, Klymentyev had been preparing a story about the mansions of four top officials, one from Ukraine’s security service.
With the liquidity crisis surrounding the rollover of Greek debt subsiding, the probability of default for that country has plummeted from nearly even odds to just over one in three.
Last Week’s Numbers: 06 May 2010
Meanwhile, other state and national governments are showing continued stress. Venezuela tops the list with a CDS spread of 1049 and a risk of default now over 50%. Argentina and Pakistan are also now ahead of Greece which is now only the 4th most likely government in the world to default.
Most recent numbers: 11 May 2010
The usual suspects are on the list including Dubai, Ukraine and Latvia. The one thing to notice is that California has now cracked the top ten with a 20% default probability. For California muni bond holders, this number bears watching.
The best laboratory for free diagnosing virus influenza A/H1N1I of Eurolab clinic has been closed in Kyiv today, UNIAN quotes founder and president of the foundation Eurolab, head of headquarters Kyivers against influenza Andriy Palchevskyi.
“I think it is caused by the fact that we fix the real scope of epidemics of swine influenza. In recent days more than 100,000 people have appealed to us. Many of them could do tests free of charge. It is simply unacceptable and crime to close the laboratory during the epidemic. We believe it is score-settling”, – said Andriy Palchevskyi.
He presupposed that officials want to reduce the real scope of the swine flu epidemic in Ukraine. He doubts Ukraine’s Health Ministry is giving reliable information about scale of the epidemic and the real number of people ill with swine flu. “For example, in America during 6 months of the epidemic of swine influenza 22 mn people were infected with virus A/H1N1, about 4,000 people died, among them were 540 children. But in the United States there are more than 20 laboratories, and we have only 3,” – said Andriy Palchevskyi.
According to him, the laboratory Eurolab is closed by the municipal sanitary-epidemiological station, because allegedly, “there were some problems with the documents.” “But we have been working for 5 years. And there were no problems. We have the only Ukrainian private laboratory diagnosing influenza virus A/H1N1,” – said Andriy Palchevskyi.
Deadly flu continues to spread across Ukraine, criminal World Health Organization lies to the public, MSM maintains radio silence.
There are many aspects to this story. It is impossible to know where to begin — let alone cover all the pertinent facts in just one article. Those who have followed my Zerohedge columns in the past may be aware the subject of pandemic influenza has been a regular feature, precisely because there have been multiple signs indicating a global pandemic would be exploited (and perhaps even initiated) by governments and international banks for political purposes.
The signs have been building, including as I previously reported, forced quarantine orders inadvertently published by the CDC. What do these people know which the public does not?
SUMMARY
Over the past two weeks, what appears to be a particularly virulent form of the flu has been spreading in Ukraine and adjacent Eastern European countries. This new flu is, in my opinion, a lethal new strain which has mutated (or was released). I speak with a background in virology. This new mutated flu virus appears to have a remarkable affinity for the lungs and is causing deaths to a much higher extent than the previous swine flu. Something in the virus has changed. I have covered this incredibly important story for two weeks now in my weekly column This Week In Mayhem, which is generally published on Monday mornings.
Regardless, there has been almost zero (NOTHING. NADA. SILENCE.) mention of the Ukraine epidemic in the mainstream media, a fact which I find both astonishing and profoundly disturbing. There is apparently collusion at the highest levels of government and media to suppress this information. There are now 1.3 million infected in Ukraine, and over 75,000 hospitalized — IN FOURTEEN DAYS. This is very serious! Based on previous clinical data we can expect over 8,000 to be dead or soon to be dead. Forward projection of the epidemic is difficult because the clinical attack rate is unknown — but myself and my associates remain concerned it may be quite high. Deaths globally may be in the millions. Let’s hope this is not the case.
An example of viral pneumonia. Yeah, fail.
The new flu strain, which I contend is spreading in Ukraine and Belarus, is characterized by a lightning form of viral pneumonia — very similar to what happened in 1918. The new flu virus appears to have profound tissue affinity for sialic acid receptors deep in the lungs, replicating in the alveoli. To put it mildly, the lungs fill with blood. Quotes from Ukrainian officials included quotes such as “total destruction of the lungs.” Ukrainian Doctor Viktor Bachinsky has stated, “The virus causing the deaths is extremely aggressive — it doesn’t first infect the throat (as is common in flu), but strikes the lungs directly.” In Ukraine’s western Chernovetsky region, an epicenter of the outbreak, doctors have said lab tests showed at least some of the fatalties appeared to be caused by a flu dissimilar to both common flu and swine flu. In other words, a mutant flu. This claim of a ‘mutant flu’ has been echoed by Ukrainian public health officials such as Dr. Vasyl Lazoryshynetz. Unfortunately, as noted in the above Russia Today video, pharmacies across the country are sold out of antivirals. To the hard of thinking — yes, this is currently happening in Ukraine.
I have multiple sources confirming spot outbreaks of viral pneumonia in Eastern Europe, including official and non-official entities. In terms of the current situation, there appear to be a high number of pneumonia patients in Ukrainian and Belerusian hospitals. This epidemic has not shut down Ukrainian society yet, but it has caused many people to become concerned, and to buy up essential medicines. Reports from doctors in Belarus indicate they do not expect this deadly new flu epidemic to peak until Christmas or later. This is why it is important to analyze the situation and viral genetics now, and if necessary, contain the spread of the virus while it is still possible — something the criminals at WHO do not appear interested in doing. These idiots at WHO have yet to release the viral gene sequences (even though they have had them for two weeks), and are now outright lying in their press releases, which I detail later. In terms of how dangerous this new flu strain could potentially be, I conducted a rough analysis of the Ukrainian government statistics, yielding a projected case fatality rate (CFR) of 0.61% — over six times as lethal as seasonal flu.
The Ukrainian government has been releasing daily data updates on the numbers of “acute respiratory infections” , the number of related hospitalizations , and the number of deaths since Oct 28, 2009. These reported numbers have increased substantially over the past two weeks, from near zero before Halloween to over a million as of today. It is important to remember that these statistics are not laboratory confirmed H1N1 cases (due to the state of the Ukrainian medical system), but we can cautiously assume at this point the vast majority of ARI (acute respiratory infection) in Ukraine with rapid progression to viral pneumonia are caused by influenza A virus. This is because a large subset of these samples are coming up positive of Influenza A, and a smaller subset tested by rt-rtPCR are coming up positive for influenza A/H1N1, or what is more commonly known as ‘swine flu’. This suggests we are dealing with a viral epidemic of influenza.
(Click on images to enlarge.)
This is not ‘swine flu’ as previously known. Statistically, the only way for this to be ‘swine flu’ is if it has mutated (or if the data is wrong). . . We will get to that in a minute.
People receiving H1N1 vaccine shots right now need to know that currently-available H1N1 vaccine shots may offer no protection whatsoever against the “Ukraine Strain.”
– Mike Adams
Not only that the H1N1 swine flu vaccine won’t offer any protection, but also the effect of squalene in the vaccine will make the ‘average badly taken care of human body’ overreact even greater to any real ‘super flu’, than it would have done without the vaccine. The immune system in high alert will create a cytokine storm that many will not survive. People will die very quickly because they received the H1N1 vaccine.
Even without any ‘super flu’ around the vaccine alone is lethal stuff.
“No one should take the swine flu vaccine–it is one of the most dangerous vaccines ever devised. It contains an immune adjuvant called squalene (MF-59) which has been shown to cause severe autoimmune disorders such as MS, rheumatoid arthritis and Lupus. This is the vaccine adjuvant that is strongly linked to the Gulf War syndrome, which killed over 10,000 soldiers and caused a 200% increase in the fatal disease ALS (Lou Gehreg disease). This virus H1N1 kills by causing a “cytokine storm”, which means that it cause the body’s immune system to overreact and that is why it is killing young people and is a mild disease in the elderly. (The elderly have weakened immune systems.) This vaccine is a very powerful immune stimulator and carries the real possibility of making the lethality of the virus much greater.
– Dr. Russell Blaylock
‘Somebody’ decided to put 1 million times more squalene into the H1N1 swine flu vaccine than into the vaccine that has been linked to the Gulf War syndrome according to Dr. Rima Laibow and Dr. Anders Bruun Laursen.
So what if instead of the very mild swine flu there is a real ‘super flu’ coming?
PS: If you are really healthy and happy you will never ever get sick, even if all hell will break loose around you.
Ukrainian Prime Minister Yulia Tymoshenko, left, wears a face mask as she visits a regional hospital in Lutsk, about 400 km (247 miles) west of Kiev, Ukraine
(NaturalNews) Here’s what we know with some degree of certainty about the H1N1 virus in Ukraine right now: nearly 300 people have died from the viral strain, and over 65,000 people have been hospitalized (the actual numbers are increasing by the hour). The virus appears to be either a highly aggressive mutation of the globally-circulating H1N1 strain, or a combination of three different influenza strains now circulating in Ukraine. Some observers suspect this new “super flu” might be labeled viral hemorrhagic pneumonia (meaning it destroys lung tissue until your lungs bleed so much that you drown in your own fluid), but that has not been confirmed by any official sources we’re aware of.
Ukrainian President Viktor Yushchenko has issued emergency quarantine orders for nine of the country’s regions and ordered the deployment of mobile military hospitals. He announced that the nation had been simultaneously hit with two different seasonal flu strains plus H1N1 — and then hinted that all three might have recombined into the deadly new Ukrainian super flu.
In his own words, as reported by Daily Mail, “Unlike similar epidemics in other countries, three causes of serious viral infections came together simultaneously in Ukraine: two seasonal flus and the Californian flu. Virologists conclude that this combination of infections may produce an even more aggressive new virus as a result of mutation.”
On November 6, Ukraine’s Deputy Health Minister Zinovy Mytnyk announced that over 600,000 citizens had already caught the new flu. British scientists are now conducting tests on the new viral strain to find out why it appears to be so deadly (http://www.dailymail.co.uk/news/wor…).
The mainstream media is blaming Ukraine’s poor health care system for the relatively high rates of hospitalization and death (http://www.nytimes.com/2009/11/14/w…), but they refuse to mention (yet again) the vitamin D deficiency found across this population living at high latitude in the winter, where sunlight is relatively scarce.
Arrest of objectors ordered as President says “We must change the entire system of government in Ukraine”
Ukrainian President Victor Yushchenko has all but declared martial law in the country as he announced yesterday that the National Security and Defense Council will become the supreme ruling authority in the wake of a mystery epidemic sweeping the country.
Yushchenko has made high ranking health ministers members of the NSDC, a government body consisting of the president himself, the chairman of parliament, the prime minister Yulia Tymoshenko (pictured), the head of the Security Service of Ukraine and other high ranking ministers.
Yushchenko told reporters Wednesday night that “the non-fulfillment of its decisions will be prosecuted,” adding “We need to change the system. We need to change the whole system of the state power organization in Ukraine. We have no time for remonstrance no time for waiting”.
The President reiterated his statements in an official address to the Ukrainian people yesterday, in which he states “Failure to comply with [NSDC] orders will immediately result in application to the law enforcement authorities.”
KIEV (AFP) – Prime Minister Yulia Tymoshenko on Friday ordered a three-week closure of Ukraine’s schools and cinemas in the toughest measures adopted yet to combat the swine flu virus in Europe.
“From today, all the school establishments in Ukraine — be they private or public — will be put on three weeks of holiday,” she told her cabinet in comments carried on Ukrainian television.
Tymoshenko said the government would also be banning “all public gatherings, every concert and every cinema showing for three weeks.”
As the world enters the H1N1 Swine Flu Pandemic season, another possible virus emerges as 30 people in the Eastern European country of Ukraine have died from this latest flu.
Each country is dealing with their own cases of the H1N1 Swine Flu and many have even taken the vaccination but is H1N1 the only flu out there? A viral infection in Ukraine has taken the lives of 30 people and at first it seemed like an ordinary flu but after a week the symptoms became worse.
Radio Netherlands Worldwide reports 40,000 Ukrainians have contracted the disease and at least 100 are in the hospital. Tests are currently being conducted and all is known is that it is not the H1N1 Swine Flu. A large number of schools and childcare facilities are being shut down, especially in the city of Lvov.
Also, government agencies are handing out surgical masks and gloves to people in the western part of Ukraine.
However, Russia Today is reporting that it is A/H1N1 or Californian Flu and the total number of deaths is closer to 40. Prime Minister Timoshenko stated, “Express-tests cannot provide a hundred percent verification of the virus, they give only 50% accuracy.
That’s why blood probes of those who died were sent to special laboratories for further testing. And only this morning it was confirmed that at least 11 deaths were caused by the A/H1N1 virus.”
Western European banks are exposed to over £1 trillion of eastern European debt, leading to comparisons with the subprime crisis in the United States. Austria is particularly affected, with an outstanding loan portfolio to eastern Europe of £213 billion, 71 per cent of GDP.
Ukraine and Latvia have warned that Western Europe faces financial disaster unless it unites to help stricken countries in the former Soviet bloc.
Government officials from the two countries, which are at risk of bankruptcy as a result of the global financial crisis, told the Daily Telegraph that the European Union’s biggest powers were in danger of repeating the worst mistakes of the 1930s depression by retreating into isolationism and protectionism.
Grigory Nemyria, Ukraine’s deputy prime minister, said that the EU had to overcome bitter internal differences over how to deal with the economic crisis in eastern Europe when world leaders met next month at the G20 summit in England.
“The EU should not just be helping Ukraine because Ukraine is helpless,” Mr Nemyria said. “It should be doing so because it is in the EU’s self-interest.
“There is a high exposure in the [Western European] banking sector to Ukraine, Latvia etc that can only be addressed by acting in concert. The cost of inaction will be far greater than the cost of action.”
Europe’s institutions are scrambling for ways to prevent financial contagion from Ukraine and the rest of Eastern Europe from setting off a full-blown banking crisis in Austria, with risks of systemic contagion across the eurozone.
Joaquin Almunia, EU’s economic commissioner, said Brussels is ready to co-ordinate a pan-EU response to contain the crisis before matters get out of hand.
“I share with the Austrian authorities their concern about the situation of these economies. Everybody shares their concern about the risks involved. We are extremely concerned about the difficulties with the Ukrainian government,” he said.
Jan. 19 (Bloomberg) — Four years after Ukraine embraced the West with the election of President Viktor Yushchenko in the Orange Revolution, the former Soviet nation’s economy is collapsing and investors expect the country to default.
Even with the International Monetary Fund’s $16.5 billion bailout, Ukraine’s finances are deteriorating as the country battles with Russia over natural gas prices and the cost of steel, its biggest export, sinks.
Yields on Ukraine’s $105 billion of government and company debt are the highest of any country with dollar-denominated bonds except Ecuador, which defaulted in December. The currency, the hryvnia, weakened 38 percent in the past 12 months against the dollar. The benchmark stock index lost 85 percent in 2008, the biggest drop in the world after Iceland, data compiled by Bloomberg show.
“The market is telling us there is a high probability of a default,” said Tom Fallon, head of emerging-markets at La Francaise des Placements in Paris, which manages $11 billion and sold its Ukrainian holdings six months ago. “It’s an advantage that the country is committed to policy measures that the IMF is prepared to back, but that is no guarantee it won’t default.”
The gap in yields between Ukraine’s bonds and Treasuries tripled in the past four months to 25.1 percentage points. The country’s bonds yield 9.6 percentage points more than debt sold by Argentina, which defaulted in 2001 and has yet to compensate all holders, according to JPMorgan Chase & Co. data.
Riot police officers, in front of Lithuania’s Parliament building, confronted about 7,000 demonstrators in Vilnius on Friday. Ints Kalnins/Reuters
MOSCOW – Riots broke out once again in the Baltic states on Friday, this time in the Lithuanian capital, Vilnius, where a group of 7,000 gathered to protest planned economic austerity measures. A smaller group began throwing eggs and stones through the windows of government buildings until the police moved in, using tear gas and rubber bullets to disperse the crowd.
The episode was nearly identical to one on Tuesday in Latvia, when a peaceful protest of 10,000 people erupted into violence. And on Wednesday, a gathering of 2,000 in Sofia, the Bulgarian capital, began throwing stones and snowballs at the Parliament building, calling for the nation’s leaders to resign.
In all three countries, years of steady economic growth have come to a jarring halt, and citizens are facing layoffs and cuts in wages. In each case, the authorities were left wondering whether they were facing organized activism or just the anger of people whose expectations have been disappointed. “I think this is just the beginning,” said Anders Aslund, a senior fellow at the Peterson Institute for International Economics in Washington. “We should expect this to happen in many places.”
Like its neighbor, Latvia, Lithuania has enjoyed a reputation as a “Baltic Tiger,” buoyed by foreign investment, a housing boom and annual growth rates of around 8 percent. Although Lithuania is not facing as dire an outlook as Latvia, economists predict a 5 percent drop in gross domestic product there next year, and the newly elected Parliament has announced tough austerity measures: workers in the public sector will see pay cuts of up to 15 percent, pensions will fall and an array of taxes will rise.
Russia has halted all gas supplies to European countries including Turkey and Greece.
The move comes amid a deepening rift between Russia and Ukraine, which hosts a pipeline supplying gas from its bigger neighbour to countries across Europe.
Bulgaria and Macedonia also reported that all supplies of Russian gas had been cut, while Romania’s pipeline operator said that its supplies had been cut by 75 per cent.
Bulgaria’s finance ministry said the country was facing a crisis. Petar Dimitrov, the economy and energy minister, said: “Russia and Ukraine must find an urgent solution because the energy systems of dozens of countries are at risk.”
The European Commission condemned the cuts as “completely unacceptable”. In an unusually strongly worded statement, it demanded that Russia restore supplies “immediately”.
Russia ordered a reduction in gas flow to Europe via Ukraine on Monday, a measure it said was to stop its neighbour from stealing fuel. Ukraine said the move would jeopardise supplies to the rest of Europe, which is facing freezing temperatures.
Vladimir Putin, Russia’s prime minister, yesterday ordered Gazprom, the Russian energy giant, to reduce gas supplies to Ukraine bound for Europe in a move that escalates the dispute between the two countries, writes Isabel Gorst in Moscow .
Gazprom claims Kiev has been stealing gas from transit pipelines since it cut off supplies to Ukraine on January 1 after talks about a new gas deal collapsed.
Mr Putin ordered Alexei Miller, chief executive of Gazprom, to cut supplies to the Ukrainian transit system by the same volume as Ukraine had taken.
Naftogaz, Ukraine’s state gas company, said it had been notified by Gazprom that it would cut transit supplies to Europe by 65.3m cubic metres a day to 221.8m cubic metres per day. “Gazprom has in fact cut volumes of transit gas to European customers,” Naftogaz said.
A Ukrainian worker at a gas storage and transit point in Boyarka, outside Kiev (Sergei Chuzavkov/AP)
Nine countries in and around Europe have now reported problems with their gas supply as a result of Russia’s dispute with the Ukraine, after Slovakia, Greece and Croatia today disclosed they were experiencing drops in gas pressure.
The development comes as an emergency mission from the European Commission in Brussels and the Czech Presidency of the EU left this morning, bound for Kiev for talks with the Ukrainian authorities as the international crisis deepened.
The delegation of Czech diplomats and senior European officials also plans to meet senior officials from Gazprom, the Russian state gas monopoly, which cut supplies to Ukraine on January 1
Gazprom chief executive says full gas shipments to European Union will continue uninterrupted
Russia cut natural gas deliveries to Ukraine today after negotiations failed to resolve a dispute over unpaid bills and the price for supplies this year.
Gazprom, the Russian state-owned gas provider, lowered pressure at 7am GMT in pipelines to Ukraine which also carry in transit about 80% of Russian gas consumed by other countries in Europe.
Ukraine said yesterday that it had paid $1.5bn (£1bn) in debts for supplies in November and December but Gazprom said it had not received that money from RosUkrEnergo, an intermediary company. It is also demanding a further $600m in fines which Ukraine said it is not yet prepared to pay.
The last time exports were terminated – in January 2006 – there was an immediate impact elsewhere in Europe as Ukraine allegedly siphoned off gas meant for onward transit. But the Gazprom chief executive, Alexei Miller, said it would continue full shipments to the European Union, which gets about a quarter of its gas from the Russian company, most of it through pipelines that cross Ukraine.
Rich governments and corporations are triggering alarm for the poor as they buy up the rights to millions of hectares of agricultural land in developing countries in an effort to secure their own long-term food supplies.
The head of the UN Food and Agriculture Organisation, Jacques Diouf, has warned that the controversial rise in land deals could create a form of “neo-colonialism”, with poor states producing food for the rich at the expense of their own hungry people.
Rising food prices have already set off a second “scramble for Africa”. This week, the South Korean firm Daewoo Logistics announced plans to buy a 99-year lease on a million hectares in Madagascar. Its aim is to grow 5m tonnes of corn a year by 2023, and produce palm oil from a further lease of 120,000 hectares (296,000 acres), relying on a largely South African workforce. Production would be mainly earmarked for South Korea, which wants to lessen dependence on imports.
“These deals can be purely commercial ventures on one level, but sitting behind it is often a food security imperative backed by a government,” said Carl Atkin, a consultant at Bidwells Agribusiness, a Cambridge firm helping to arrange some of the big international land deals.
Turkey is reported to be in negotiations with the International Monetary Fund for a $40 billion loan. Very shortly, the Baltic States and at least a dozen developing countries will be filing for IMF handouts. But how will the venerable lender of last resort fund itself?
According to a fact sheet posted on its website in October, the IMF had $200 million available for emergency loans to the third-world, and another $50 billion in “additional resources”. But the IMF’s liquidity is rapidly dwindling. Between the crisis facilities concluded with Ukraine, Hungary, Serbia, Iceland and Pakistan, and the expected spate of new loan requests, the IMF should be running out of money within the first quarter of next year. Quite simply, unless the rich nations (including American tax-payers) can add to the IMF’s funding capabilities, the global recession will cause unprecedented havoc, chaos, hunger and turmoil in the world’s poverty pockets.
The Hungarian National Bank stands in Budapest, Hungary, on Oct. 16, 2008. Photographer: Balint Porneczi/Bloomberg News
Oct. 31 (Bloomberg) — Imre Apostagi says the hospital upgrade he’s overseeing has stalled because his employer in Budapest can’t get a foreign-currency loan.
The company borrows in foreign currencies to avoid domestic interest rates as much as double those linked to dollars, euros and Swiss francs. Now banks are curtailing the loans as investors pull money out of eastern Europe’s developing markets and local currencies plunge.
“There’s no money out there,” said Apostagi, a project manager who asked that the medical-equipment seller he works for not be identified to avoid alarming international backers. “We won’t collapse, but everything’s slowing to a crawl. The whole world is scared and everyone’s going a bit mad.”
Foreign-denominated loans helped fuel eastern European economies including Poland, Romania and Ukraine, funding home purchases and entrepreneurship after the region emerged from communism. The elimination of such lending is magnifying the global credit crunch and threatening to stall the expansion of some of Europe’s fastest-growing economies.
The International Monetary Fund may soon lack the money to bail out an ever growing list of countries crumbling across Eastern Europe, Latin America, Africa, and parts of Asia, raising concerns that it will have to tap taxpayers in Western countries for a capital infusion or resort to the nuclear option of printing its own money.
IMF’s work in countries such as Turkey is only just beginning
The Fund is already close to committing a quarter of its $200bn (£130bn) reserve chest, with a loans to Iceland ($2bn), Ukraine ($16.5bn), and talks underway with Pakistan ($14.5bn), Hungary ($10bn), as well as Belarus and Serbia.
Neil Schering, emerging market strategist at Capital Economics, said the IMF’s work in the great arc of countries from the Baltic states to Turkey is only just beginning.
“When you tot up the countries across the region with external funding needs, you get to $500bn or $600bn very quickly, and that blows the IMF out of the water. The Fund may soon have to start calling on the West for additional funds,” he said.
Brad Setser, an expert on capital flows at the Council for Foreign Relations, said Russia, Mexico, Brazil and India have together spent $75bn of their reserves defending their currencies this month, and South Korea is grappling with a serious banking crisis.
“Right now the IMF is too small to meet the foreign currency liquidity needs of the larger emerging economies. We’re in a dangerous situation and there is the risk of extreme moves in the markets, as we have seen with the Brazilian real. I hope policy-makers understand how serious this is,” he said.
The IMF, led by Dominique Strauss-Kahn, has the power to raise money on the capital markets by issuing `AAA’ bonds under its own name. It has never resorted to this option, preferring to tap members states for deposits.
The nuclear option is to print money by issuing Special Drawing Rights, in effect acting as if it were the world’s central bank. This was done briefly after the fall of the Soviet Union but has never been used as systematic tool of policy to head off a global financial crisis.
“The IMF can in theory create liquidity like a central bank,” said an informed source. “There are a lot of ideas kicking around.”
Russia’s financial crisis is escalating with lightning speed as foreigners pull funds from the country and the debt markets start to price a serious risk of sovereign default.
S&P has cut its outlook for Russia, which has been propping up the rouble: a man on a phone passes a board displaying currency exchange rates in Moscow Photo: Reuters
Russia’s financial crisis is escalating with lightning speed as foreigners pull funds from the country and the debt markets start to price a serious risk of sovereign default.
The cost of insuring Russian bonds against bankruptcy rocketed to extreme levels yesterday. Spreads on credit default swaps (CDS) reached 1,123, higher than Iceland’s debt before it sought a rescue from the International Monetary Fund.
Moves by Hungary, Ukraine and Belarus to seek emergency loans from the IMF have now set off a dangerous chain reaction across Eastern Europe.
Romania had to raise overnight interest rates to 900pc on Wednesday to stem capital flight, recalling the wild episodes of Europe’s ERM crisis in 1992. The CDS spreads on Ukraine’s debt have topped 2,800, signalling total revulsion by investors.
Rating agency Standard & Poor’s issued a downgrade alert on Russian bonds yesterday, warning that a series of state rescue packages worth $200bn (£124bn) could start to erode the credit-worthiness of the state.
Ukraine, Hungary, and Serbia are all in emergency talks with the International Monetary Fund, raising fears that an exodus of foreign investors will set off a systemic crisis across Eastern Europe.
A team of IMF trouble-shooters rushed to Kiev on Wednesay to draw up a possible standby loan to help Ukraine stabilize its bank after a panic run on deposits this month.
A string of countries face the risk of “going bust” as financial panic sweeps Asia, Eastern Europe, and Latin America, raising the spectre of a strategic crisis in some of the world’s most dangerous spots.
Nuclear-armed Pakistan is bleeding foreign reserves at an alarming rate leading to fears that it could default on its loans.
There are mounting fears that Ukraine, Kazakhstan, and Argentina could all now slide into a downward spiral towards bankruptcy, while western banks exposed to property bubble across Eastern Europe have seen their share price crushed.
The markets are pricing an 80pc risk that Ukraine will default, based on five-year credit default swaps (CDS) – an insurance policy on a country being able to pay its debts.
The country’s banking system has begun to break down after years of torrid credit growth; its steel mills are shutting as demand collapses; and the political crisis is going from bad to worse.
Oct. 8 (Bloomberg) — Russia, Indonesia, Ukraine and Romania shut their stock exchanges after shares plummeted in the worst week for emerging-markets in at least two decades.
Russia’s Micex Index dropped 14 percent, having already slumped 20 percent this week, before trading stopped at 11:05 a.m. in Moscow. The exchange won’t reopen until Oct. 10 unless the Federal Financial Markets Service says otherwise, Micex spokesman Alexei Gerasyuk said by phone. The Jakarta Composite index fell 21 percent in its biggest weekly slump in at least 25 years, according to data compiled by Bloomberg.
Investors are fleeing on concern the worsening global credit crisis will cause more banks to collapse and push the global economy into recession, lowering the price of the commodities that drive developing nation economies. The benchmark MSCI Emerging Markets index is headed for its worst weekly decline since it was established in 1987 after falling 21 percent.
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Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
