Ukraine’s Tymoshenko warns of a new Iron Curtain

After Europe emerged from the worst war in human history, its cities lay in ruins. Its economy was in tatters. It was in this environment that an Iron Curtain fell over Europe dividing it into east and west, separating Europeans from each other for four decades. Now, another twenty years later, we risk another great divide in Europe, the Ukrainian Prime Minister Yuliya Tymoshenko has warned.

Below is my translation of a German-language article in Austrian daily Der Standard. 

The Ukrainian Prime Minister Yuliya Timoshenko warned in a newspaper commentary of a new “Iron Curtain” in Europe and calls on the European Central Bank to support those countries not in the euro zone. The euro should not lead to an Iron Curtain, which puts non-Euro countries into a  higher risk class, which investors would no longer dare trust, Timoshenko wrote in Le Figaro.

Ukraine has asked the International Monetary Fund (IMF) for emergency aid to stabilize the economy. The country has been hit hard by the global crisis. The currency has lost more than 40 percent of its value since the autumn. The IMF, however, has delayed the transfer of the second loan tranche of a total of 16.4 billion U.S. dollars (13 billion euros) and called on the country to make its crisis management more urgent.

After the Fed also offered currency swaps to Brazil, Mexico and South Korea, Tymoshenko has  called for a similar scheme in Europe: “The ECB should also provide access to these tools to countries outside the monetary area.”

My view here is that Tymoshenko is going to be one of the last countries in the queue, so she had better demonstrate some seriousness about managing this crisis domestically or even the monies promised by the IMF will not be forthcoming.  The EU has its hands full with the Baltics and Central Europe, not to mention Club Med’s economic woes and Ireland and Austria’s banking crises.

Does this mean a new ‘Iron Curtain’ is forming?  I doubt it.  However, one should be very concerned here given the strategic importance of Ukraine as a transit route for gas.  Having them fall into the abyss is good for no one in Europe.

By the way, the term Iron Curtain comes from a famous 1946 speech by Winston Churchill:

From Stettin in the Baltic to Trieste in the Adriatic an “iron curtain” has descended across the Continent. Behind that line lie all the capitals of the ancient states of Central and Eastern Europe. Warsaw, Berlin, Prague, Vienna, Budapest, Belgrade, Bucharest and Sofia; all these famous cities and the populations around them lie in what I must call the Soviet sphere, and all are subject, in one form or another, not only to Soviet influence but to a very high and in some cases increasing measure of control from Moscow.

Sources
Timoschenko warnt vor einem neuen “Eisernen Vorhang” – Standard Austria
Iron Curtain – Wikipedia