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Ukraine's New Finance Minister Says Country "on Brink Of Financial Disaster"

At a news conference unveiling the financial state of the nation, Ukraine's new Finance Minister has said the country is "on the brink of financial disaster."

Fedir Yaroshenko blamed the previous government of Yulia Tymoshenko for concealing the facts and "publicly boasting about achievements, whereas in reality the country was on the brink of a financial catastrophe."

He told reporters in Kiev Monday that Ukraine's total pension fund deficit in the first quarter was Hr 29.8 billion ($3.73 billion).

It comes a day after he said President Viktor Yanukovych and the new government have a program of stabilizing the financial system, and that they are experienced enough to drive the country out from the recession.

Viktor Suslov, head of the State Commission for Regulating Markets of Financial Services, had warned last month of Ukraine's possible default on external obligations.

He says that during the forthcoming year, Ukraine will have to repay about $30 billion, and this amount exceeds the gold and foreign currency reserves of the National Bank of Ukraine, which is estimated at $ 25.3 billion as of January 31, 2010.

Yaroshenko added that the Finance Ministry is able to ensure the timeliness of all necessary social payouts. He vowed that "We will not let a single disruption occur in the public finance system, and our citizens will always get their salaries and pensions on time."

Battered by the economic downturn, Ukraine was badly in need of a new, stable government to adopt a delayed 2010 budget and restart talks with the International Monetory Fund (IMF) on a suspended $16.4 billion bail-out package.

The emergence of a new administration has enlivened the country's bail-out prospects from international agencies.

The European Union has pledged Ukraine "more than half a billion euros (more than $6.75 million) in macro-financial assistance" on condition that it agrees on a new cost-cutting plan with the IMF.

World Bank Country Director for Ukraine, Belarus and Moldova Martin Raiser said last week the preparation and approval of a realistic national budget for 2010 must be among the new government's priority tasks. He suggested the government to foresee a decrease in budget expenses.

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