[LINK] Two Bloomberg links on economic crisis in Ukraine

[rfmcdonald]

First is "Ukraine’s Economy Set to Drop 7.5% in Full-Blown Crisis".

Ukraine’s economy probably shrank 7.5 percent this year, after the conflict with eastern separatists and Russia’s takeover of Crimea helped trigger a “full-scale” financial crisis, central bank Governor Valeriya Gontareva said.

The Ukrainian banking system is “non-functioning,” and the rate of the hryvnia, which has fallen 48 percent against the dollar this year to become the world’s worst-performing currency, reflects its true value, Gontareva said today at a central bank briefing in Kiev. When asked whether Ukraine would default on its debt, she said: “I don’t think Ukraine needs to be a pariah country.”

The conflict has killed more than 4,700 people, according to a UN estimate, while Prime Minister Arseniy Yatsenyuk said this month that the fighting wiped out 20 percent of Ukraine’s economic potential. The central bank has spent $1.3 billion of its reserves supporting the hryvnia and will continue taking steps to limit its decline, the governor said.

“There is a full-blown financial crisis,” Gontareva told reporters. “We can only overcome it if we implement quick and even extreme reforms.”

Ukrainian lawmakers approved a 2015 budget yesterday, taking another step toward unlocking future tranches of a $17 billion International Monetary Fund-led bailout. The central bank expects to receive three tranches in early 2015, including two delayed tranches that were due this year.

The second is "Ukraine to Import Coal From ‘Far Away’ as War Curtails Mines".

Ukraine’s coal supplies are at unprecedentedly low levels because of the conflict with pro-Russian rebels, requiring imports from as far away as Asia to avert rolling blackouts this winter.

The former Soviet, which had about 1.4 million tons of coal in reserve stockpiles as of Dec. 1, needs another 1 million tons to get through the winter, said Energy Minister Volodymyr Demchyshyn today at a briefing in Kiev.

Ukraine, which blames Russia for supporting a violent separatist movement in the east that has killed more than 4,700 people, is looking for alternative fuel sources as supplies are curtailed at coal mines in the war-stricken regions of Luhansk and Donetsk and the country faces the possibility of blackouts if temperatures suddenly plunge this winter.

“We are incapable of independently supplying our power plants with coal,” said Demchyshyn. “Money was designated to purchase additional volumes of coal and negotiations were held with all participants, starting from Australia, South Africa and Kazakhstan, to work on the possibility of shipping coal from far-away countries.”

Historically coal self-sufficient and a net exporter of the fuel, Ukraine has seen its carbon production decimated because of the separatist conflict and after rail transport became unavailable or uncertain.