Ukrainians queue for lost savings

The cash is being widely welcomed

Millions of Ukrainians have queued at banks across the country to claim compensation for bank savings lost in the collapse of communism.

Claimants braved freezing temperatures - with at least two pensioners dying in the process.

Each applicant is able to withdraw a maximum of 1,000 hryvnas ($198; £101).

They are being encouraged to put the money - the equivalent of a month's wages for the average Ukrainian - into a savings account.

Economists have warned that a sudden cash injection into the economy could worsen inflation in Ukraine, currently running at 16%.

Chaos

Many Ukrainians built up savings during the Soviet era because, with consumer goods rare, there was little to spend money on.

But when communism collapsed and market reforms were launched in the early 1990s, inflation made the savings almost worthless

The move to honour accounts that effectively ceased to exist after the collapse of the Soviet savings bank has proved hugely popular.

It has bolstered the approval ratings of new Prime Minister Yulia Tymoshenko - who has earmarked about 6bn hryvnas in this year's budget to redeem some of the savings.

People began queuing last week to secure the money. However, many banks have insufficient cash to cope and chaos ensued around the country.

Reports suggest that one bank worker in central Kiev was beaten up by frustrated customers.

Observers say that many thought it best to queue on the first day that payments were set to be made - largely because Ukraine has a history of government decisions being overturned.