Ukrainians feel the pinch as Crimea crisis simmers

Ukrainians feel the pinch as Crimea crisis simmers

As world powers and international institutions cobble together aid packages for a debt-laden Ukraine on the brink of default, regular Ukrainians feeling the pinch fear they will see none of the cash.

A woman looks at food products in a market in Kiev on December 18, 2013

At an outdoor market north of Kiev's city centre on Friday, stallholders sold everything from colourful stuffed toys to freshly baked pastries and bouquets of flowers for International Women's Day.

But buyers were few and far between.

"People have started to buy much less, they're being more economical," said Sonya, 59, wrapped in a thick coat despite the spring weather and selling jars of honey and beeswax candles outside the Petrivka metro station.

Nikolay, a 23-year-old from Crimea, said: "I think everyone is trying to save their money because they're getting ready in case the situation changes for the worse" on the tense Black Sea peninsula.

He, too, has seen a drop in customers at his tiny shop, where he sells sunglasses and US-style baseball caps.

Irina and Sergiy Lutay, a retired couple shopping for household appliances at a nearby chain store, said they had taken their savings out of the bank in January, before pro-Moscow president Viktor Yanukovych was ousted.

"We fear the situation will escalate so we want our money to be safe," said Irina.

The escalation in Ukraine -- which began with violent clashes that killed 100 people in three months and has now moved over to Crimea -- has added one more headache to a country already struggling with massive debt and a huge fiscal deficit.

The European Commission and United States this week pledged billions of euros in aid to shore up the stricken economy after dramatic warnings the country could default within days.

A mission of the International Monetary Fund also arrived on Tuesday to assess the situation in view of further aid to Ukraine's new government, which has said it will need 25 billion euros ($35 billion) over two years.

But regular Ukrainians were distrustful of any deals, even as the national currency -- the hryvnia -- has tumbled and many have complained of higher prices.

- 'Politicians will steal aid' -

"The aid will not help Ukrainians," said Lutay.

"The prospects are unclear because sooner or later Ukraine will have to give the money back to the EU," said his wife Iryna.

"Before this escalation of the situation, Ukraine had lots of debt. Now there will be more."

Sunglasses salesman Nikolay agreed: "This money proposed by the EU and other institutions will not reach ordinary people.

"There are a lot of fears that politicians will steal this money," he added, reflecting the widespread notion in Ukraine that most politicians are corrupt -- even with a new government in place.

For small and medium-sized companies however, the only hope lay in international aid that would help revive the economy and force the government to carry out necessary reforms, said Oleksandra Selina, the executive director of a motor oil importing company.

"Ukraine needs help," she told AFP.

"Only if we have help from outside, the IMF, European countries and the United States, will we have some changes.... Without this help we will not survive."

Russian energy giant Gazprom on Friday warned Ukraine it could cut off gas supplies if Kiev did not pay a bill for debt that now stands at $1.89 billion.

But after meeting with interim prime minister Arseniy Yatsenyuk and his economic team, the IMF's European Department Director Reza Moghadam sounded an upbeat note.

Moghadam said he was "positively impressed with the authorities' determination, sense of responsibility and commitment to an agenda of economic reform and transparency".

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