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REFILE-Ukraine PM urges ECB to offer E.Europe euro funding

Published 03/04/2009, 04:47 AM
Updated 03/04/2009, 04:48 AM

(Refiles to delete extraneous word "no" in fifth para)

PARIS, March 4 (Reuters) - The European Central Bank should offer non-euro zone countries in eastern Europe access to funding in euros, Ukrainian Prime Minister Yulia Tymoshenko said in a column published in French daily Le Figaro on Wednesday.

Ukraine has got help from the International Monetary Fund to ease its economic crisis, but the Fund has yet to release its latest tranche of funding due to differences with Kiev.

Noting that the U.S. Federal Reserve has opened currency swap lines offering countries including Brazil, Mexico, Singapore and South Korea access to U.S. dollars, Tymoshenko said a similar arrangement should be looked at in Europe.

"The European Central Bank should consider offering this type of facility to European countries outside the euro zone to make trade and commercial exchanges more fluid," she said in the column, which appeared the day she is due in Paris for a meeting with French President Nicolas Sarkozy.

The ECB is already providing central banks in Denmark, Poland and Hungary with access to euro liquidity, but she made no reference to this. An ECB spokesman declined comment on the article.

The IMF has suspended release of a second tranche of its loan to Ukraine -- worth about $1.84 billion -- due to a number of differences with Kiev, including the size of the budget deficit and a lack of political unity to battle the economic crisis that has gripped the country.

Tymoshenko urged European countries to reject protectionism and called on euro zone members not to abandon eastern Europe.

"We should not let the euro become an iron curtain that would consign non-members to a high-risk zone where investors dare not venture," she wrote. (Writing by James Mackenzie; editing by David Stamp)

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