Trade unions outside the IMF office in Kiev
Ukraines largest trade union federation is urging that
a public sector pay freeze, energy price rises for households
and an increase in the retirement age for women all key
conditions of the IMFs lending programme be
Vasyl Khara, general secretary of the Trade Union Federation
of Ukraine, said the demand to ditch the measures was put to
the IMF and government in tripartite talks last month in
Khara said he had put the unions demands in writing to
the Fund, and is awaiting a response. There was no comment from
If union demands are not heeded, we will picket the
IMF. We will tell the Ukrainian people that they have come here
with evil intent, Khara told Emerging
Khara, a parliamentary deputy for the ruling Party of
Regions, led by president Viktor Yanukovich, has been
criticised by other party members for his anti-IMF stance.
The public split shows how sensitive the party is to popular
hostility to the austerity measures linked to the Funds
$15 billion programme for Ukraine, approved in July, which
followed and partly refinanced a $10.5 billion programme
approved in October 2008.
People have an extrem- ely negative view of the
IMF, Khara said. The financial crisis struck a
colossal blow to employment and living standards. One third of
the industrial capacity has stood down or been closed. Now
people are being asked to make more sacrifices.
Analysts doubt that the IMF will soften its stance on
austerity measures, but say that the Party of Regionss
resolve could be weakened.
Olga Pogarska, chief economist at the Sigma Bleyzer
investment group in Kiev, said: The market responded well
to Ukrainian debt issuance in part because the government has
demonstrated willingness to cooperate with the IMF. This
cooperation will be essential for continued refinancing.
The main thing that could affect the outlook is poor
implementation of the measures, related, for example, to the
local elections at the end of October.
Critics of the fund programme fear that it could tip Ukraine
back into recession. Mark Weisbrot, co-director of the Centre
for Economic and Policy Research, said: The last thing
the Ukrainian economy needs is a fiscal tightening on this
scale. This could be a big negative shock.
Popular opposition to austerity packages is a wild card in
countries across Europe with IMF loan programmes.
Latvias Unity alliance, led by conservative prime
minister Valdis Dombrovskis, won a general election decisively
at the weekend, taking 63 of 100 parliamentary seats in a
result seen as an endorsement of austerity policies.
Public opposition to austerity measures may not unfold in
eastern Europe as rapidly as in western Europe, Weisbrot
The eastern European countries have taken a beating,
but civil society is weaker there than in the west, he
said. In Spain, Portugal and elsewhere in western Europe
governments have to reckon with a high level of opposition from
civil society and the unions.