While Ukraine's political situation remains uncertain, its economy teeters on the brink

If the political instability is not reined in soon enough, the currency will spiral out of control.

As the protests in Ukraine have escalated over the last three months, President Viktor Yanukovych has appeared progressively weaker. The timing of his sick leave last week could not have been more apt. The president has now offered a raft of substantive concessions in a bid to appease the protesters, not least the chance to lead a new cabinet, but in every instance he has been rebuffed. His subsequent decision to take leave was a signal that his options have rapidly reduced.

The government’s resignation was a serious blow to Yanukovych’s legitimacy. Without a cabinet underneath him he has become an isolated figure. The opposition recognises this and in the ensuing negotiations will maintain their stance of demanding early presidential and parliamentary elections.

As a western observer, one could be forgiven for thinking that there is an overwhelming majority of Ukrainians in favour of EU integration, with Vladmir Putin and Yanukovych the only figures standing in their way. But in reality the country is bitterly divided: Western Ukraine has very strong cultural and linguistic ties with Russia, and its inhabitants are deeply concerned about the impact of competition from the EU on its dilapidated, yet important industrial sector. Even the opposition is not unified, and it is difficult to reconcile the views held by the far-right nationalist party, Svoboda (which is at the vanguard of the current movement), with the EU’s supranational mantra. In any case, an election held in the current atmosphere would surely serve as a de facto referendum on EU integration, but it would undoubtedly be a close-run contest.

While Ukraine’s future continues to be contested, its economy teeters on the brink. So far Russian bond purchases and gas price concessions have provided a financial buffer, but if Yanukovych’s grip on power is eroded further and an opposition-led government becomes more likely, this support could be revised and potentially withdrawn. The EU would not be able to step in without major political reforms inside the country and in the meantime bond yields would rise amid sustained downward pressure on the currency.

Moody’s have already downgraded Ukraine’s sovereign rating to Caa2 with a negative outlook, citing growing strains on liquidity caused by the surging demand for dollars as the domestic population seek to convert their savings. On 31 January the hryvnia fell 2.5 per cent against the dollar – the largest single-day loss in almost five years. This is of significant concern, as with a USD15 billion loan from Russia, the government had spent several weeks using its financial reserves to prop up the country.

As the central bank has scaled back its commitment to maintaining a dollar-peg, this downward pressure is manageable in the short-term. Within the context of low inflation and slow export growth, it could even provide a boost. The danger, however, is that if the political instability is not reined in soon enough, the currency will spiral out of control, placing increased pressure on the corporate and financial sectors so as to impinge on their ability to service foreign debt.

The insurance market is acutely aware of this risk, and accordingly, capacity for credit cover on Ukrainian counterparties is exceedingly tight. It is set to remain so for the rest of Q1 and beyond.

Anti-government protesters on a barricade in Kiev on 7 February, 2014. Photograph: Getty Images.

JLT Head of Credit & Political Risk Advisory

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Let's face it: supporting Spurs is basically a form of charity

Now, for my biggest donation yet . . .

I gazed in awe at the new stadium, the future home of Spurs, wondering where my treasures will go. It is going to be one of the architectural wonders of the modern world (football stadia division), yet at the same time it seems ancient, archaic, a Roman ruin, very much like an amphitheatre I once saw in Croatia. It’s at the stage in a new construction when you can see all the bones and none of the flesh, with huge tiers soaring up into the sky. You can’t tell if it’s going or coming, a past perfect ruin or a perfect future model.

It has been so annoying at White Hart Lane this past year or so, having to walk round walkways and under awnings and dodge fences and hoardings, losing all sense of direction. Millions of pounds were being poured into what appeared to be a hole in the ground. The new stadium will replace part of one end of the present one, which was built in 1898. It has been hard not to be unaware of what’s going on, continually asking ourselves, as we take our seats: did the earth move for you?

Now, at long last, you can see what will be there, when it emerges from the scaffolding in another year. Awesome, of course. And, har, har, it will hold more people than Arsenal’s new home by 1,000 (61,000, as opposed to the puny Emirates, with only 60,000). At each home game, I am thinking about the future, wondering how my treasures will fare: will they be happy there?

No, I don’t mean Harry Kane, Danny Rose and Kyle Walker – local as well as national treasures. Not many Prem teams these days can boast quite as many English persons in their ranks. I mean my treasures, stuff wot I have been collecting these past 50 years.

About ten years ago, I went to a shareholders’ meeting at White Hart Lane when the embryonic plans for the new stadium were being announced. I stood up when questions were called for and asked the chairman, Daniel Levy, about having a museum in the new stadium. I told him that Man United had made £1m the previous year from their museum. Surely Spurs should make room for one in the brave new mega-stadium – to show off our long and proud history, delight the fans and all those interested in football history and make a few bob.

He mumbled something – fluent enough, as he did go to Cambridge – but gave nothing away, like the PM caught at Prime Minister’s Questions with an unexpected question.

But now it is going to happen. The people who are designing the museum are coming from Manchester to look at my treasures. They asked for a list but I said, “No chance.” I must have 2,000 items of Spurs memorabilia. I could be dead by the time I finish listing them. They’ll have to see them, in the flesh, and then they’ll be free to take away whatever they might consider worth having in the new museum.

I’m awfully kind that way, partly because I have always looked on supporting Spurs as a form of charity. You don’t expect any reward. Nor could you expect a great deal of pleasure, these past few decades, and certainly not the other day at Liverpool when they were shite. But you do want to help them, poor things.

I have been downsizing since my wife died, and since we sold our Loweswater house, and I’m now clearing out some of my treasures. I’ve donated a very rare Wordsworth book to Dove Cottage, five letters from Beatrix Potter to the Armitt Library in Ambleside, and handwritten Beatles lyrics to the British Library. If Beckham and I don’t get a knighthood in the next honours list, I will be spitting.

My Spurs stuff includes programmes going back to 1910, plus recent stuff like the Opus book, that monster publication, about the size of a black cab. Limited editions cost £8,000 a copy in 2007. I got mine free, as I did the introduction and loaned them photographs. I will be glad to get rid of it. It’s blocking the light in my room.

Perhaps, depending on what they want, and they might take nothing, I will ask for a small pourboire in return. Two free tickets in the new stadium. For life. Or longer . . . 

Hunter Davies is a journalist, broadcaster and profilic author perhaps best known for writing about the Beatles. He is an ardent Tottenham fan and writes a regular column on football for the New Statesman.

This article first appeared in the 16 February 2017 issue of the New Statesman, The New Times