Economic situation forces Ukraine to postpone signing of EU association agreement

Ukrainian Prime Minister Nikolai Azarov told parliament that Ukraine had to halt signing of an association agreement with the EU due to economic factors, Interfax reports.The official clarified that the position of the IMF expressed in a letter on November 20 was the final straw in the process. He said that the document had very harsh demands for the refinancing of loans granted in 2008-2010.Azarov listed factors: increase of gas and heating prices by 40%; freezing of basic salaries, minimal salaries at the current level; reduction of expenses for budget purposes, reduction of subsidies in energy; gradual lift of the VAT in agriculture and other fields.Ukraine halted the EU association process yesterday in order to develop relations with Russia and other CIS states.

Ukrainian Prime Minister Nikolai Azarov told parliament that Ukraine had to halt signing of an association agreement with the EU due to economic factors, Interfax reports.

The official clarified that the position of the IMF expressed in a letter on November 20 was the final straw in the process. He said that the document had very harsh demands for the refinancing of loans granted in 2008-2010.

Azarov listed factors: increase of gas and heating prices by 40%; freezing of basic salaries, minimal salaries at the current level; reduction of expenses for budget purposes, reduction of subsidies in energy; gradual lift of the VAT in agriculture and other fields.Ukraine halted the EU association process yesterday in order to develop relations with Russia and other CIS states.