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To: Ahda who wrote (22853)	11/11/1998 1:41:00 PM
From: Alex	Respond to of 116791

Soros: Social Pressures Threat to Ukraine Stability KIEV, Nov. 11, 1998 -- (Reuters) U.S. financier George Soros said on Tuesday that pressure was building up within Ukraine's economy that could push the country into a Russia-type crisis if serious steps were not taken. "The situation in Ukraine is better than in Russia, mainly because Ukraine has an IMF program, but ... there are tensions building up," Soros told journalists after a meeting with Ukrainian President Leonid Kuchma. Soros, who said he had no investments in Ukraine and was visiting the Ukrainian branch of his philanthropic fund, said he and Kuchma had discussed the IMF's opposition to Ukraine's wish to print money to pay off state sector wage and pension arrears. "This is some kind of a stalemate situation and it is very dangerous, because without the IMF program Ukraine could follow in Russia's footsteps," Soros said. The cash-strapped government is under pressure from parliament to make social payments, but it must at the same time stick to demanding fiscal and reform targets if it is to receive installments of a $2.2 billion IMF loan. The fund said last week the government's plans to print money risked aggravating inflation and increasing pressure on the foreign currency exchange market, where the hryvnia, effectively devalued in September, has recently stabilized and even firmed. "The indicators so far are better and stability is maintained, but the pressure is building up because this is achieved at the cost of not meeting social obligations," said Soros. A senior government official told a government meeting on Tuesday that the government owed 3.8 billion hryvnias ($1.1 billion) in state sector wages, pensions, stipends and other payments as of Oct. 1. The Finance Ministry wants to raise up to 500 million hryvnias by the end of the year via treasury-bill sales, which other government officials have suggested might be done through the central bank purchasing the bills. "I am sure that there is a way out for Russia, just as there is a way out for Ukraine, but it requires political will and leadership," Soros said, adding that he did not see the necessary qualities in either country. ( (c) 1998 Reuters) russiatoday.com