Exchange rates displayed in Kiev. Photo: Olaf Koens.
After the financial crisis hit Western Europe, it snowballed towards the east, forcing heavily indebted states like Ukraine to take strict measures to avoid economic collapse.
The former Soviet state has already nationalised two of the country's banks and asked for a $15 billion (€11.6bn) bailout from the International Monetary Fund. In recent weeks, the national currency has tumbled 12%, while demand for raw material exports from the country continues to fall. The effects are even being felt on the street, after several banks put a €150-equivalent cap on daily withdrawals from ATMs.
The country's already unstable political situation worsened after President Viktor Yushchenko was forced to recall the parliament that he had dissolved two weeks ago. Parliamentary elections have since been postponed until 14 December.
CORRECTION: although there was talk amongst ministers of nationalising some of the country's banks, thanks to a comment we received on the French version of this post, we have since found out that this has not actually happened. One bank was placed under the administration of the central bank, but this was not directly related to the current crisis. UPDATE: on Sunday the IMF agreed to loan $16.5bn (€5.2bn) to the country.
Nic Turchak is a
25-year old entrepreneur from Kiev.
He works with web 2.0 start-ups and is affiliated with HomeMoney.com.ua, a website that gives people an
online overview of their expenses.
Ever since the start of the financial crisis we've seen a big increase in
the use of the site. These days, everybody's worried about their finances. Many
people are having to recalculate their budgets. Inflation is the biggest
problem. You feel it everyday. People are stocking food in their homes for
I don't trust banks [and] this crisis explains very
well why I don't keep my money there. I invest my savings instead. There are
many densely populated areas in Kiev,
so I buy parking lots there. That's a smart investment."
Pavel Tytyuk is a 21-year-old
student from Kryvoy Rig, a small city in the Dnipropetrovsk area in
My city relies heavily on the steel industry, and it's here that people
feel the impact of the international crisis really badly. Right now around 30
percent of people are out of work and without means. In my case, I just have a
little bit of money in my pocket, and that's it.
I would never buy anything on credit. My parents never did, so [I think] it's
very stupid to spend money that you don't have. If I had a lot of money I
wouldn't put it in the bank. It could easily disappear. I would probably invest
it in some kind of internet project instead."
Djellid is a young
professional who works in Kiev.
The Ukraine has developed a lot during the past four years [pro-Western president
Yushchenko came to power four years ago] but it has probably failed to reach its
full potential because of the ongoing political crisis.
There's a problem here with the distribution of
wealth; it's not proportional, both in social and regional terms. The gap
between the capital city and the rest of the country is enormous. But this is
also related to the foreign investment as around 70 per cent of it is
concentrated in Kiev
and its surroundings. Real estate prices in Kiev are crazy. How can a person earning €400
- which is the average monthly wage - afford a one-bedroom apartment in a
suburb costing around €120,000 with an annual bank interest of 15%?
I put my own savings in deposits at the bank, but I spread the risk both in
gold and different currencies. I'm thinking about investing in the
stock market, but certainly not in the current financial environment. If the
people in power would cut out the political mess and start doing business in a
smart way rather then caring about their own political ambitions and pockets,
then the Ukraine
might have a bright financial future. With further investment from abroad, more
people from different social backgrounds will be able to access funds and the market in general will open up,
then there will be a strong and sustainable future for the country."