Welcome to the U.S.-Ukraine Business Council

THE FINANCIAL CRISIS AND UKRAINE, FIVE NEWS ARTICLES

1.  UKRAINE MAY BORROW UP TO $15 BILLION FROM IMF
By Stefan Wagstyl in London and Roman Olearchyk in Kiev, Financial Times, London, UK, Thu, Oct 16 2008

2.  UKRAINE MAY SIGN IMF DEAL NEXT WEEK
We hope that the IMF will encourage the authorities to weaken the currency more aggressively.
We hope that the Fund will press for deeper seated structural reforms.
Timothy Ash, Head of CEEMEA research,  Royal Bank of Scotland, London, UK, Thu, Oct 16, 2008

3.  IN UKRAINE, IMPACT OF GLOBAL CRISIS BEGINNING TO STING
By Maryana Drach, Iryna Shtogrin, RFE/RL, Kyiv, Ukraine, Thursday, October 16, 2008

4.  EASTERN EUROPE IS IN THE RED
By Stefan Wagstyl, Financial Times, London, UK, October 16 2008

5.  UKRAINE PRIME  MINISTER SAYS IMF PROPOSES CREDIT, OPPOSES NEW ELECTIONS
Reuters, Kiev, Ukraine, Thursday, October 16, 2008
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1.  UKRAINE MAY BORROW UP TO $15 BILLION FROM IMF

By Stefan Wagstyl in London & Roman Olearchyk in Kiev, Financial Times, London, UK, Thu, Oct 16 2008

Ukraine may borrow between $10bn and $15bn from the International Monetary Fund to “strengthen its position” during the global financial crisis, the country’s deputy Central Bank governor Oleksandr Savchenko, said on Thursday as an IMF delegation arrived Kiev.

“We may not need all of the sum. We’re now meeting with IMF representatives, examining the situation, and are deciding how much money we need.’’ Mr Savchenko said in a telephone press conference. Ukraine may sign the agreement as soon as next week, added Mr Savchenko, who headed the country’s delegation at the IMF’s annual meeting in Washington last week.

Officials in Kiev said they were seeking to shore up confidence in their under-pressure economy. But they insisted that the economy remained in good shape, accusing western experts of exaggerating the risks facing Ukraine, and saying the IMF delegation would be in Kiev for one week “to personally study the situation”. Bogdan Danylyshyn, economy minister, said: “Altogether, Ukraine’s macroeconomic situation is not dangerous.”

Economists suggested that Ukraine’s government may seek a credit facility to fill a widening current account deficit left by sharp declines in the prices of steel; credit-financed import increases; and rising prices for gas imports. In the first half of this year the deficit rose to 7.9 per cent of gross domestic product from 4.2 per cent last year.

Heavy borrowing by Ukraine’s budding banking sector has swelled the country’s total foreign debt to some $100bn, according to July figures. Of, this, just $15bn is government debt. Foreign exchange reserves stand at $37.5bn.

Ali Aleyd, an emerging markets economist at Citigroup, said “external financing requirements for Ukraine next year could total $55-66bn, assuming all maturing external debt must be repaid. I think Ukraine would benefit from IMF help to bring further creditability to the policy framework.

2.  UKRAINE MAY SIGN IMF DEAL NEXT WEEK
We hope that the IMF will encourage the authorities to weaken the currency more aggressively.
We hope that the Fund will press for deeper seated structural reforms.

Timothy Ash, Head of CEEMEA research,  Royal Bank of Scotland, London, UK, Thu, Oct 16, 2008

LONDON - Deputy  National Bank of Ukraine governor, Savchenko, is reported by Bloomberg as suggesting that an IMF deal maybe signed as early as next week. Savchenko is known to be leading negotiations with the Fund.

He was in Washington last week as head of an NBU/MOF team. He said that they were still thinking about the size of the programme, with US$10-15bn
appearing as a possibility.

Note that earlier in the week we sensed that they thought they could get away with just US$3-5bn, but given our assumptions that they actually needed more like US$10-15bn, they seem to be adjusting their expectations; we have made our feelings known in terms of the size of funding now needed and we think the message is finally getting thru. They seem to be responding.

There has been talk about a Stand-by arrangement, rather than a precautionary arrangement. This would be positive, as it would imply regular
disbursements, plus much tougher conditionality.

Savchenko is suggesting that IMF $$ will be deposited at the NBU, suggestive that this will be BOP/banking sector support, rather than budget financing
support which is arguably not needed.

WE HOPE THE IMF WILL ENCOURAGE AND PRESS THE AUTHORITIES
[1] We hope that the IMF will encourage the authorities to weaken the currency more aggressively to enable the external financing gap to be partially closed. The backing of an IMF programme will more likely allow them to do this while also shoring up broader confidence in the banking sector.

[2] We hope that the Fund will press for deeper seated structural reforms, including hikes in domestic gas/energy prices, which would help alleviate some of the problems for the state-owned gas transit company, Naftogaz.

Our sense is that there would be pretty broad cross party support for cutting a deal with the IMF. Yushchenko's Our Ukraine control the central
bank, via governor Stelmakh, and the chairman of the NBU board, Poroshchenko both allies of Yushchenko) and the NBU seems to be driving momentum to an IMF deal.

Perhaps Yushchenko is hopeful that he will gt plaudits for securing IMF cash and saving the economy/banking sector - kind of zero to hero line, modelled
on "Just Gordon" Brown.

Meanwhile, ministers from the BYUT-led government, including Pynzenyk, and Turchynov, have spoken out in favour of an IMF deal; arguably having the
external anchor of an IMF programme also will help them drive through difficult structural reforms, including domestic gas price liberalisation
and privatisation.

Presumably the man on the street can be sold the line that the choice is either hike domestic gas prices, and get an IMF programme, or wave goodbye
to bank deposits, a la Icesave. And, lastly, oligarchic backers of Regions (Akhmetov et al), are eager to get external financing for their
banks/corporates and they know now that without an IMF deal their financing options will be severely restricted for the foreseable future.

3.  IN UKRAINE, IMPACT OF GLOBAL CRISIS BEGINNING TO STING

By Maryana Drach, Iryna Shtogrin, RFE/RL, Prague, Czech Republic, Ukraine, Thu, Oct 16, 2008

KYIV -- Political uncertainty is nothing new for Ukrainians. But financial uncertainty is something different -- and deeply unwelcome. As the effects of the global financial crisis take hold around the world, money flows have become a source of extreme anxiety in Ukraine. On the streets of the capital, many residents expressed worry about the fate of their savings.

"I went to Privatbank to withdraw money from my active account, which I'm supposed to be able to use any time," says one man. "They told me to go away; they didn't give me anything. I'm still fighting about it. Tomorrow I'm going to go and file a lawsuit." "I have doubts," says another. "This is one of those situations where money is controlling people, rather than people controlling their money."

Others were more sanguine. "I trust the banks. The interest rates haven't gone down and our bank is working normally," says one woman, adding, as an afterthought: "When my deposit comes in December, I can take the money out and put it someplace else."

'STRICT, BUT CORRECT'
Officials at Ukraine's central bank are all too aware of the risks of public jitters. Citing a "psychological factor," the National Bank of Ukraine (NBU) this week decided to impose limits on lending, foreign-currency trade, and early withdrawals of certain deposits.

The decision, taken October 13, came after National Bank depositors -- unnerved by mounting inflation and a weakening currency -- withdrew more than $1.3 billion from their accounts in just under two weeks. It's hoped the steps will prevent a full-scale run on the bank by panicking citizens.

The NBU was also forced to provide a $1 billion stabilization loan to the country's sixth-largest bank, Prominvestbank, which failed after panicked depositors in the eastern region of Donetsk rushed to withdraw their money.

Vyacheslav Yutkin, who serves as chairman of the board of the Ukrainian branch of Russia's Sberbank, says the NBU's measures were appropriate but too slow in coming.

"The methods of the Ukrainian National Bank are strict, but correct. It's an important and necessary preventive measure," Yutkin says. "If the National Bank had reacted two weeks earlier, banks would have had the chance to hold on to at least $1.5 billion in accounts, and the current liquidity crisis wouldn't be so bad. But it took a long time for them to make a decision, and that made the crisis even worse."

PIECES OF THE PUZZLE 
Some officials are still offering an upbeat assessment of the economic climate. Economy Minister Bohdan Danylyshyn on October 15 noted Ukraine's 2008 GDP growth stayed steady at 7 percent through September, and still remains strong despite "some decline" in certain sectors.

Other authorities have expressed confidence that Ukraine will escape the worst of the damage brought on by the global financial crisis because the country's still-developing stock exchange is less vulnerable to the vagaries of market fluctuations.

It is difficult to gloss over other indicators, however. Inflation peaked in May at 31 percent -- putting Ukraine higher than any other country except Zimbabwe and Venezuela -- before dropping to a less alarming 16 percent in September. The value of the local currency, the hryvnya, last week sank by 20 percent, forcing the NBU to intervene and sell dollars at an artificially low rate.

With such figures in mind, many economy-watchers acknowledge Ukraine will not be able to avoid the long-term effects of the crisis.

This will be particularly true if a global economic and construction slowdown shrink the global market for commodities like steel, which is Ukraine's top export and responsible for 40 percent of its hard-currency earnings. Many steel mills have already slowed or stopped production because of a drop in worldwide demand.

A global recession would also have a dramatic impact on remittances for Ukraine's large migrant workforce. Ukraine is second only to Russia in remittances in Central and Eastern Europe, sending home nearly $8.5 million a year -- an estimated 8 percent of the country's GDP.

WILD CARD
Then there is the critical factor of the price Ukraine will pay for Russian gas in 2009. Ukraine currently pays just $180 per 1,000 cubic meters. But Russia has repeatedly said it wants former Soviet states to switch to market prices, and has pointedly noted its fees for Western European markets exceeded $500 in October. A sudden hike in Ukraine's gas prices could have a devastating effect on the country's financial reserves -- although not everyone is worried.

"We shouldn't forget that Ukraine has almost $40 billion in reserves; that's more than enough," says Oleksandr Suhonyako, the head of the Association of Ukrainian Banks, a grouping of the country's major commercial banks and credit institutions.

"But the financial crisis isn't going to be over soon, and it just keeps growing every day. I think it's not a matter of a month, but half a year, or even more. In order the meet the problems of the future, we need to start thinking about international loans now."

Prime Minister Yulia Tymoshenko, speaking at a news conference on October 14, avoided answering a question of whether Ukraine was seeking help from the International Monetary Fund (IMF).

Such a move would be interpreted by many as a sign that Ukraine's economy was in deep trouble. Instead, Tymoshenko -- perhaps looking ahead to a presidential bid in 2010 -- stressed that the government was doing "everything possible and impossible" to minimize the impact of the global crisis on Ukraine.

But an NBU official said on October 15 that Ukraine might seek support from an IMF credit program. Hungary, Serbia, and Iceland have already said they will approach the IMF for help gaining access to credit and defending their currencies investors' risk aversion.

Finance Minister Viktor Pynzenyk has begun meeting with members of an IMF expert mission that arrived on October 15, and the two sides "discussed the situation concerning the world financial crises and the challenges facing Ukraine's financial system," Reuters reported.

The statement added that both sides agreed to produce "recommendations for Ukraine vital for the operation of the banking sector and macroeconomic stability for Ukraine, based on the experts' assessment and taking account of the experience of other European countries."

Reuters reported that the IMF's Kyiv office made no comment on the mission, adding that it was expected to remain in Ukraine for at least a week. It cited estimates of the potential IMF largesse to Ukraine at $3 billion-$5 billion.

Speaking to reporters after a cabinet session on October 16, Reuters quoted Tymoshenko as saying that "we have information" that the IMF "is ready to examine special credits from $3 billion-$14 billion to stabilize the financial system," but that it would be contingent on Ukraine calling off early elections announced last week by President Viktor Yushchenko.

NO RAPID REACTION?
Accordingly, it's the government's own internal struggles that may prove one of the greatest liabilities as the country fights against impending economic woes.

Ukraine in December is facing its third set of parliamentary elections in as many years, a result of intractable squabbling between Tymoshenko and Yushchenko. The pair's Orange Revolution partnership in 2004 quickly devolved into an intense political rivalry that has mired Ukraine in a protracted political standoff and may continue until 2010, when the two are expected to face off for president.

Yutkin says Ukraine has grown accustomed to political uncertainty, and that the ongoing political drama will not have a noticeably adverse affect on economic conditions.

"I think politics are having only minimal influence in this situation," he says. "The economic system in Ukraine adapted a long time ago to the conditions of political instability and inflation. Higher prices and political upheaval aren't the main factors causing panic among bank depositors."

The World Bank, however, warned this week that policymakers in Eastern Europe and Central Asia "need to be prepared to respond quickly to the rapidly changing international financial environment." Some worry that Ukraine's constant cycle of elections and political infighting mean little, if any, decision making will be done in the interim.

4.  EASTERN EUROPE IS IN THE RED

By Stefan Wagstyl, Financial Times, London, UK, Thursday, October 16 2008

When Lev Partskhaladze, a Ukrainian property developer, was preparing to float his company on the London stock market three years ago, he saw no end to his country’s home and office construction boom. Today, with cranes standing idle over Kiev building sites and property sales evaporating, he admits the global credit crunch is bringing the boom to a halt.

“We are seeing a financial crisis transforming into an economic crisis in the world. It has not fully hit Ukraine yet but it’s close,” says the chairman of XXI Century Investments. With its shares down 97 per cent from their peak, the company is trying to raise cash by offloading projects to other developers.
Mr Partskhaladze is not alone in having to confront the region’s changed realities.

Across central and eastern Europe, the global crisis is biting hard, albeit very unevenly. In Russia, the authorities have set aside nearly $200bn (pounds116bn, euro149bn) for a financial market rescue, Ukraine is in talks with the International Monetary Fund over emergency loans of up to $14bn, Hungary was on Thursday bailed out with a euro5bn ($6.7bn, pounds3.9bn) loan facility from the European Central Bank.

Latvia and Estonia are suffering the region’s first recessions in a decade, while growth in oil-rich Kazakhstan has slowed to a crawl. Even in Poland, where Donald Tusk, the prime minister, insists his country is “an island of stability”, the crisis has raised doubts about Warsaw’s euro entry plans.
Stock markets have plunged accordingly, with Polish shares trading at less than half their peak levels and Ukraine’s down by three-quarters.

Property markets have slowed, even if developers are still trying to hold up prices. After riding high earlier in 2008, some currencies have come under pressure, notably the Hungarian forint. In Ukraine, where the central bank has intervened to support the hryvnia, the credit default swap rate, a risk measure, has soared 1,400 points to 1,900, among the world’s worst.

The financial whipsaw has cut billionaires down to size, not least Oleg Deripaska, the Russian metals oligarch, who has sold valuable stakes to raise cash. Others are grabbing opportunities to buy cheaply: Mikhail Prokhorov, the Russian nickel investor, acquired 50 per cent of Renaissance Capital, a Moscow bank, for $500m – about one-quarter of its value of a year ago.

With the global crisis still raging, despite the calming effects of this week’s support moves in the US and the European Union, it is impossible to predict how events will play themselves out in a region increasingly important to the west as an export market and low-cost production base. But hopes it might escape unscathed have evaporated. Apart from corporate casualties, some countries could run into difficulties funding current account deficits.

Erik Berglof, chief economist of the European Bank for Reconstruction and Development, says: “There is enormous uncertainty right now ... These countries could deal with rising borrowing costs and an economic slowdown coming from the US and western Europe, but a complete shutdown of international borrowing – nobody can withstand that.”

The result of this shock will, as in the west, increase the state’s role in the economy once more – and possibly provoke political conflicts over the share-out of scarce financial resources. As in the west, there could be public anger against those who profited from the boom years, often spectacularly so. Hungary, which first ran into economic trouble two years ago, has already experienced social tensions.

Economic growth is slowing sharply, with the IMF forecasting a decline in real gross domestic product growth for central and south-east Europe from 5 per cent this year to just 3.5 per cent in 2009. For Russia and the former Soviet Union, it predicts around 7 per cent for this year and 5.5 per cent for 2009.

By global standards, with the US and western Europe facing recession, these are respectable numbers. In non-crisis circumstances, a moderate slowdown would even have been welcome in some countries. Until the summer their main danger was overheating, with inflation running as high as 31 per cent in Ukraine. Thanks to bumper harvests, tumbling food costs are helping to curb consumer price rises but inflation is still high in some countries, notably Russia, with 15 per cent.

Also, the region as a whole is less exposed to financial turmoil because companies and households have mostly taken less credit than in the west. Raiffeisen International, the Austrian bank, says bank assets were just 90 per cent of GDP in 2007 in central Europe and 65 per cent in Russia, compared with 250 per cent in the eurozone.

But these generalisations conceal many country risks. As Jan Krzysztof Bielecki, chief executive of Poland’s Bank Pekao, says: “The development of the situation over the last few weeks has shown that there is nothing more mistaken than calling this a single region. The differences between Poland and Kazakhstan are like the difference between heaven and hell.”

A key danger is the region’s dependence on external finance, especially bank credit. According to the Institute of International Finance, total private capital and credit flows into “emerging Europe” (including Turkey) are likely to fall from a record $394bn last year to $322bn in 2008 and $262bn in 2009.

Given that $262bn is still a high figure by historical standards, there is great scope for a much bigger drop. Within this total, bank credit is set to fall particularly fast, from $219bn in 2007 to $155bn in 2008 and just $74bn next year.

While foreign direct investment is forecast to increase modestly to nearly $90bn next year, it cannot compensate for the dramatic decline in bank lending. Nor will portfolio investment save the day: the flows are far too small, peaking last year at just $8.5bn.

The biggest financing needs are in Russia, where the central bank estimates $39bn in debt falls due this year and $116bn in 2009. Little wonder that bankers and oligarchs are queuing for credits the authorities are distributing from their $560bn in foreign exchange reserves. Russia is in no danger of default but banks are under pressure – with fears of a panic increasing this week after Globex, a midsized lender, banned depositors’ withdrawals.

If the crisis persists, even the wealthy Russian state will have to count its roubles. Relative to the size of the national economy, Moscow’s financial rescue package is bigger than the $700bn programme launched by the US. Russia’s budget spending is more than doubling to $586bn in 2010, just as the oil price has roughly halved from its peak. Further declines will put spending under pressure.

But with inflation high, driving up pay and pensions, there is little scope for painless cuts, especially as Russia is committed to huge infrastructure projects, including the Sochi 2014 winter Olympics.

IN UKRAINE ------------
In Ukraine, banks have also borrowed heavily overseas to finance credit growth and are struggling to refinance themselves. At the same time, the current account deficit is widening as prices for steel, Ukraine’s main export, plummet. So Kiev’s external financing needs are growing just as credit is short and foreign direct investment, a big source of finance in recent years, is slowing.

Ukraine’s authorities insist the economy is in good shape. The central bank has maintained order by taking control of one bank and supporting 20 other lenders. But efforts to ease the crisis are hampered by political turmoil, with president Viktor Yushchenko calling early parliamentary elections for December. Yulia Tymoshenko, prime minister, on Thursday confirmed Kiev was turning to the IMF, which she said was considering lending “$3bn-$14bn”.

In central and south-east Europe and the Baltic states, many economists assumed countries would be protected from the global storm because their banks’ finance came not from markets but from the multinational banks that have bought most local lenders. But as Mr Berglof of the EBRD says, with parent banks now under pressure, this assumption may no longer apply. “This strength is turning into a vulnerability,” he warns.

Individual banks deny they have plans to pull out. But they have been raising the costs of foreign exchange denominated loans, which account for around half of corporate and household lending in central Europe. This week, leading Hungarian banks cut such foreign exchange lending, in moves which on Wednesday precipitated the biggest daily drop in the forint in five years.

On Thursday the currency rallied sharply after the authorities announced public support from the ECB – unprecedented for a country outside the eurozone – and liquidity boosting measures. Janos Veres, finance minister, says the IMF stands by to support Hungary but will intervene only in extremis.

Poland, the Czech Republic and Slovakia are in better economic condition than Hungary, having avoided the profligate public spending in which Budapest indulged until running into financial difficulties in 2006. The Czechs, with low local interest rates, are free of foreign exchange loans. But like Hungary, these countries are exposed to another painful shift – an expected steep decline in demand from western Europe. Slovakia, with its heavy dependence on a single industry – cars – is particularly vulnerable.

Except for Hungary, however, bankers are less concerned about central Europe than the Baltic states and south-east Europe, where current account deficits are high. All have relied heavily on a mix of foreign direct investment and credit for financing recent rapid growth. But with economies slowing, bankers wonder which countries can avoid a hard landing – or worse.

Estonia and Latvia, which ran into financial difficulties even before the global crisis, are already in recession. Lithuania is not far behind. But at least Baltic current account deficits are falling, from 18 per cent of GDP on average last year to 8.6 per cent in 2009, according to the IMF.

In south-east Europe, the Fund predicts deficits to stay at 14 per cent next year, including 21.5 per cent for Bulgaria. “Action is needed to rein in rising external and internal imbalances, mindful of more volatile external financing conditions,” the IMF says But whether that action will come in time is a moot point. Analysts at Citigroup rank Romania and Bulgaria alongside the Baltic states, Hungary and Ukraine as countries vulnerable to “a risk to financial stability”.

As credit growth decelerates across the region, putting a brake on economies, current account deficits should decline as credit-financed imports fall. So soft landings are certainly well within reach. The difficulty comes in bridging the financing gaps that are bound to emerge in the most hostile financial conditions in 60 years. If there is a crumb of comfort, it is that these ex-communist states have more experience than most of implementing tough economic policies under pressure. [Additional reporting by Jan Cienski in Warsaw, Roman Olearchyk in Kiev and Thomas Escritt in Budapest]

5.  UKRAINE PRIME  MINISTER SAYS IMF PROPOSES CREDIT, OPPOSES NEW ELECTIONS

Reuters, Kiev, Ukraine, Thursday, October 16, 2008

KIEV - The IMF may lend Ukraine a sum ranging from $3-14 billion to shore up its financial system but has made any credit contingent on calling off a snap election, Prime Minister Yulia Tymoshenko said on Thursday.

The IMF office in Kiev declined to comment. But the Fund, while setting financial conditions for credits, almost never takes a position on internal political issues in a country with which it negotiates an assistance programme.

Political woes in Ukraine, which faces its third parliamentary poll in as many years, have been compounded by fears that government and banks may not be able to refinance debt as its currency weakens and global lending dries up.

IMF officials arrived on Wednesday to discuss how it could help cushion the impact of the global financial crisis. It has also been approached for aid by Iceland, Hungary and Serbia.

'We have information today that the International Monetary is ready to examine special credits from $3-14 billion to stabilise the financial system,' Tymoshenko told a news conference after a cabinet meeting.

'At the same time, the IMF said it finds it very difficult to talk with Ukraine amid all these proposals for an early election. 'Let me stress that in order to receive this standby credit needed to stabilise the currency and financial system, it is vital to postpone the election. The IMF also said this.'

Ukraine has so far avoided direct blows to its economy from the global financial crisis, but the hryvnia currency fell when investors rushed out of emerging assets and scrambled for dollars. It hit an all-time low last week of 5.9 to the dollar.

The central bank has a difficult balancing act -- letting the hryvnia weaken under the weight of the current account gap would take away one of the few constants in a country gripped by political turbulence since the 2004 'Orange Revolution'. Propping it up would deplete hard currency reserves which now amount to the equivalent of $37.5 billion.

Authorities are also keen to calm depositors' fears after speculation of a takeover deal led to a run on Ukraine's sixth largest bank, Prominvest.

POLITICAL BATTLES
The central bank's First Deputy Chairman, Anatoly Shapovalov, said the size of the credit from the IMF would depend on Ukraine's quota subscription in the Fund. 'At the moment, we do not need these funds, but who can say how the global crisis will develop tomorrow?' he said.

Another central bank official declining to be identified said Ukraine's quota was the equivalent of $2 billion and that countries can receive 3-5 times their quota -- amounting to a total of $6-10 billion. The rest could come from other international organisations.

Ukraine is used to political turmoil since Yushchenko came to power seeking NATO and European Union membership. But its economy had been growing at about 7 percent annually. Now, growth is expected to slow substantially -- the IMF says to 2.5 percent next year from 6.4 percent this year.

Tymoshenko, the president's estranged ally, restated her opposition to the Dec. 7 poll, called after Yushchenko blamed her for breaking up the government and dissolved parliament. Citing the background of the financial crisis, Tymoshenko offered to accept 'any conditions' to persuade the president to call off the election. Her allies have launched court action suspending preparations for the vote.

Analysts in Ukraine saw her comments as yet another political manoeuvre in her standoff with Yushchenko. 'If Tymoshenko secures IMF support, it will be a very strong argument for the political elite, for people in the know,' said Oleksander Dergachyov, an independent political analyst. 'If she doesn't get it, Yushchenko will look the guilty party. Her argument allows her to get the support of business.' (Additional reporting by Yuri Kulikov and Pavel Polityuk; Writing by Ron Popeski and Sabina Zawadzki)