LONDON, March 10 – Ukraine must honor its commitments while tackling economic crisis in order to win support from international financial institutions, European Bank for Reconstruction and Development President Thomas Mirow said Tuesday.

Ukraine, badly hit by the crisis, has been seeking to resume borrowing from the International Monetary Fund and other lenders to avoid default on foreign debts this year and next.

In a speech at the London School of Economics, Mirow said Ukraine was the “biggest concern” in the region, and that political instability there had been exacerbating a “grave economic situation.”

“In this context we call on the decision-makers in Ukraine to honor their commitments,” Mirow said. “Such a commitment will be backed by the strong partnership of the international financial institutions, including the EBRD.”

“This is not only about much-needed finance, but also about restoring trust in the country,” Morow said.

The IMF last month postponed disbursement of $1.84 billion installment to Ukraine within its $12.4 billion rescue loan package, citing the government’s failure to meet earlier commitments.

The commitments include keeping budget deficit from widening, as well as approving a number of amendments that bolster independence of the National Bank of Ukraine among other things.

The EBRD alone would invest up to 1 billion euros to finance various projects in Ukraine if the country was to secure an agreement with the IMF.

A week ago, President Viktor Yushchenko, Prime Minister Yulia Tymoshenko and Parliamentary Speaker Volodymyr Lytvyn all signed a letter asking the IMF to resume the lending to back anti-crisis measures.

Mirow, who praised Ukraine for “declaration of unity,” said the country was important for the stability of Europe.

He urged western European governments against restricting the flow of rescue cash from western banks to their subsidiaries in Ukraine.

“One can, of course, see Ukraine also as a test case for international solidarity,” Mirow said. “The stability of Ukraine is of crucial importance for the future of all Europe.”

Many European banks, such as Raiffeisenbank of Austria or BNP Paribas of France, own major subsidiaries in Ukraine that have been facing pressure caused by the credit turbulence in the region.

“We endorse the view that in providing support to their own banks, west European countries must not prevent those funds being used to help their subsidiaries in eastern Europe,” Mirow said.

“Maintaining the flow of credit and not retrenching behind national borders is crucial for all of Europe,” he said. “Shutting the door to our neighbors now will also mean shutting the door to our own future.” (nr/ez)