Ukraine Passes Laws to Battle Financial Crisis

Ukrainian lawmakers on Thursday backed severe restrictions on public spending and a government-wide hiring freeze to help the economy survive the global financial turmoil, the Associated Press reported. As the Ukrainian currency hit a new low, parliament gave tentative approval to legislation that would limit spending on renovating government buildings, purchases of automobiles and other public expenses. The law would be the latest in a series of measures to battle the crisis. Ukraine has been one of the hardest-hit emerging markets during the global crisis, its export-oriented economy battered by the drop in world price for steel, the heart of the economy. The ex-Soviet republic has already received more than a quarter of a $16.4 billion emergency loan from the International Monetary Fund. "An immediate meltdown has been avoided by the IMF deal...but a lot of challenges lie ahead," said Ozgur Guyuldar, emerging markets strategist at Raiffeisen Centrobank in Vienna. Analysts said the IMF's severe fiscal restrictions will lead to a sharp drop in domestic demand. That, coupled, with a fall in exports of steel, could lead to the bankruptcy of a number of corporations, unable to service or refinance debts. Read more.