Ukraine: Current Issues and U.S. Policy
LIBRARY OF CONGRESS WASHINGTON DC CONGRESSIONAL RESEARCH SERVICE
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In January 2005, Viktor Yushchenko became Ukraines new President after massive demonstrations helped to overturn the former regimes electoral fraud in what has been dubbed the Orange Revolution, after Yushchenkos campaign color. Some hoped Ukraine might finally embark on a path of comprehensive reforms and Euro-Atlantic integration after 15 years of half-measures and false starts. However, infighting within his governing coalition hampered economic reforms and led to disillusionment among Orange Revolution supporters. The global economic crisis has hit Ukraine harder than perhaps any other eastern European country. Ukraines currency, the hryvnya, has lost over 40 of its value and continues to face speculative pressure in international markets. Ukraines banking sector also is in crisis. In November 2008, the International Monetary Fund approved a 16.4 billion standby loan for Ukraine to bolster its finances. The loan was conditioned on a commitment from Ukraine to allow its currency to depreciate in a controlled way, to recapitalize the banking sector, and to pursue more rigorous fiscal and monetary policies. However, it is unclear whether the fractious Ukrainian leadership will be willing or able to take the needed steps to receive all of the IMF loan and restore the confidence of international markets. Ukraine joined the World Trade Organization WTO in May 2008. In the longer term, Yushchenko seeks Ukrainian membership in the European Union and NATO. Relations with Russia have been tense over such issues as Ukraines NATO aspirations and energy supplies. U.S. officials have remained upbeat about Ukraines success in securing WTO membership, holding free and fair elections, and improving media freedoms, while acknowledging Ukraines difficulties in fighting corruption, establishing the rule of law, and constitutional reforms. The Bush Administration strongly reiterated its support for Ukraine in the wake of the Russia-Georgia conflict of August 2008.
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