President of Ukraine Viktor Yuschenko on Monday offered a fund that could purchase out firms and banks in financial trouble to shield Ukraine, seeking a multi-million dollar IMF loan, from the world financial crisis.

V. Yuschenko, addressing officials after negotiations with the International Monetary Fund, reported state spending had to be cut to achieve a balanced budget. He offered cutting the civil service by 25 percent.

"I hereby offer an initiative to create a state stabilization fund," Yuschenko was shown on live television speaking to Ukraine's National Security and Defense Council.

"It is not headed out that resources from this fund could be used to buy enterprises deemed critical to the economy, including commercial banks."

Ukraine had the first symptom of the global crisis when its sixth largest bank, Prominvest, was placed in receivership on October 8. Officials and power authorities stress that a run on the bank was caused by rumors of a murky takeover.

Hence analysts worry about the ability of the authorities, companies and banks to refinance their debts as global lending grinds to a halt.

The Ukrainian currency hit an all time low this month at 5.8 to the dollar, undermined by a gaping current account deficit. Many of Ukraine's steel firms -- vital for economic development -- have cut production dramatically due to a lack of orders as global consumption slows.

Rows between President of Ukraine Viktor Yushchenko and Prime Minister of Ukraine Yulia Tymoshenko have stalled reforms in the last year since she became prime minister for the second round.

The two heads met an IMF delegation separately for the second time on Monday to discuss the conditions of a potential loan, which officials have reported could total up to USD 14 million.

"A row of measures was discussed which, if fulfilled, give the possibility to Ukraine to obtain financial and stabilization support," a statement on the government Web site noted.

The presidential Web site quoted the head of the delegation, Ceyla Pazarbasioglu, as saying that the Fund had already "formulated a row of measures that are required".

Analysts have added the Fund is likely to require greater fund flexibility, higher interest rates and more reforms of the banking field, though demands were expected to be less stringent than during the 1998 Asian crisis.

Hungary, Iceland and Serbia are also searching for help from the IMF to cushion them from the impact of the global crisis.