Russia's gas price dispute with Ukraine escalated Tuesday, disrupting deliveries to the European Union in the midst of a bitter cold spell, with a number of countries reporting that gas supplies had been suspended or reduced, and Germany predicting a possible shortage, the International Herald Tribune reported. Bulgaria, Romania, Croatia, Macedonia, Turkey, Greece, the Czech Republic and Austria reported that gas supplies had been suspended or reduced after Gazprom, the Russian gas monopoly, reduced gas shipments through Ukraine.

The quickening pace of Russia's rouble devaluation is piling pressure on the currencies of its neighbours and putting those without Moscow's sizeable reserves at risk of foreign debt default and further capital flight, Forbes reported. Investors are shying away from currencies such as Ukraine's hryvnia as the world economic slowdown crushes demand for its exports, global risk aversion shines a harsh light on Kiev's turbulent politics and Russia demonstrates its stranglehold on the country's energy supplies.

Ukrainian state energy company Naftogaz said on Tuesday it has published its 2007 audited accounts, allowing it to avoid technical default on a $500 million Eurobond, Reuters reported. Bondholders had agreed in November to extend the deadline for receiving the accounts--one of the conditions of the bond--until the end of this year after the financially ailing company missed a summer deadline.

The Financial Times reported that, as a symbol of the extraordinary boom of the past decade, the rise of the big emerging economies rivalled the soaring US housing market. China led the way, followed at a slower pace by the likes of India and Brazil. Though they tried to insulate themselves against the boom-bust cycle by building up foreign exchange reserves, no amount of inoculation could render them completely immune to the virulence of the financial contagion that swept the world in September and October.

Ukraine’s hryvnia pared a record two-day plunge after the central bank said a rate above 9 per dollar was “unacceptable,” Bloomberg reported. The currency fell 1.7 percent to 9.1000 per dollar by 6:28 p.m. in Kiev. It pared an earlier 18 percent two-day drop to a record 9.78 after the central bank sold reserves to support the currency. Petro Poroshenko, head of the central bank council, said at a press conference a weak hryvnia is a threat to the economy.

Ukraine’s hryvnia plunged 17 percent in two days to a record low against the dollar as a pledge by President Viktor Yushchenko to support the currency failed to ease concern that most of the country’s loans risk default, Bloomberg reported. The currency fell 7 percent today, reaching 9.65 per dollar at 2:30 p.m. in Kiev, adding to a 44 percent drop this year. It continued to slide after Yushchenko said Ukraine will buy hryvnia and called for licenses to be revoked for lenders found speculating against the currency.

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.

Icelanders will take to the streets in the thousands tomorrow to protest the government's failure to clinch a $6 billion International Monetary Fund-led loan while countries in less dire economic straits jump the IMF queue, Bloomberg reported today. Weekly protests in downtown Reykjavik may swell to 20,000 soon, or 6 percent of the population, said Andres Magnusson, chief executive of the Icelandic Federation of Trade and Services. The Atlantic island, which had the fifth-highest per capita income in the world last year, needs the money to finance imports and revive the banking system.

Japan will offer up to 10 trillion yen ($105 billion) to the International Monetary Fund to bailout nations reeling from the global financial crisis, The Nikkei newspaper reported Thursday. Japanese officials have repeatedly said Tokyo is ready to provide some of its ample cash for IMF loans if the multilateral group doesn't have enough funds for bailouts. But the ministers have not given an amount. The Nikkei, the nation's top business daily, said the amount is likely to be about 10 percent of Japan's $1 trillion foreign currency reserves.

The International Monetary Fund has “record levels of liquidity” to combat the global economic crisis and debate over new ways of supplementing its coffers was not “today’s problem”, according to John Lipsky, IMF first deputy director. With the Fund facing unprecedented calls on its resources, some policymakers have raised concerns about its continued capacity to react to demands such as its $16.5 billion loan to Ukraine and $2 billion loan to Iceland, the Financial Times reported yesterday.