A SUPPLEMENT TO EUROMONEY/APRIL 1998: EASTERN EUROPE
In November, as Ukrainian government officials huddled around a table conferring about the country's escalating fiscal crisis, the Asian crisis seemed at best an annoying aside. Indeed, some sitting at the table expected that if the IMF was willing to help countries such as Korea, then it would certainly help Ukraine - which is, after all, the third-largest recipient of US aid.
"They were saying 'Korea? How many people do they have anyway? And they got $57 billion. If they got it, we'll get it too,'" recalls one western adviser who attended those talks.
Reality since then has been rather different. Now, rather than lavishing fresh money on Ukraine, both the IMF and the US are playing hardball. They are both demanding that the country act immediately on its liquidity crunch, persisting budget deficit, mounting payroll arrears and unfriendly habits toward foreign investors - or face a damaging loss of financial help.
With nowhere else to turn at the moment, the government has sought temporary refuge in the international bond markets. In February, Ukraine made its debut issue in the Eurobond markets, offering Dm750 million ($410 million) for three years through joint lead managers Merrill Lynch and Commerzbank at an eye-popping yield of 16.2%.