Ukrainians compensated for savings lost in Soviet collapse

Ukraine:Despite technical glitches, vast queues, occasional scuffles and the death of at least one pensioner, Ukraine's new prime minister looks set to reap a political dividend from compensating her people for the savings they lost when the Soviet Union collapsed.

Yulia Tymoshenko is making good on a campaign promise to give 1,000 hryvnia (€133) to anyone who can prove they had a bank account before the end of 1991, after which economic turmoil and hyperinflation rendered life savings all but worthless.

Opponents call the move a typically reckless, populist move by the feisty Ms Tymoshenko, and one which will fuel inflation and drain state coffers.

She dismisses their claims, however, and says she is only righting wrongs her corrupt and incompetent predecessors failed to address. Analysts also note the scheme is likely to boost her popularity outside her stronghold of western Ukraine, bolstering her position as premier and perhaps preparing the ground for a presidential bid in 2009.

Ms Tymoshenko's budget for 2008 allocated €2.7 billion for compensation, but hundreds of thousands of people who tried to claim their share found local banks unprepared for the rush.

One man died of heart problems after waiting outside a bank from 3am, while Ukrainian television showed pictures from around the country of long queues and scuffles breaking out between bank staff and people frustrated at having to wait outside in freezing weather. Minor injuries were reported at banks in several towns and cities.

When banks cited "technical problems" and briefly stopped paying people, memories of the post-Soviet banking collapse and the empty promises of compensation from previous leaders hardened the resolve of the mostly elderly claimants, who refused to go home.

"They're mocking us," said Ganna (70), who waited outside a bank from 6am. "I borrowed money to bury my husband, I need to pay back the debt."

Ms Tymoshenko insisted the technical problems would be solved and that anyone who could prove they had more than 1,000 hryvnia in savings in 1991 would be compensated for the rest in vouchers to pay for food and utilities.

Analyst Vadim Karasev said the scheme was sure to boost Ms Tymoshenko's popularity - to the annoyance of other party leaders. "It's already a presidential campaign in its approach," he said. "It's a wonder the others didn't think of it first."