The Washington Times - March 2, 2009, 10:44AM

I know this week is health-care week at the White House, but it’s hard to ignore the dramatic news and ominous signs coming out of Eastern Europe this morning.

A flurry of stories from the Economist, the New York Times and the International Herald Tribune all tell different angles of the same story: Eastern Europe is in big financial trouble, and it could destabilize the entire region.

Clifford Levy’s story on Ukraine raises a very specific scenario that would be of great concern to the U.S.:

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It is not hard to understand why world leaders are increasingly worried about the discontent and the financial crisis in Ukraine, which has 46 million people and a highly strategic location. A small country like Latvia or Iceland is one thing, but a collapse in Ukraine could wreck what little investor confidence is left in Eastern Europe, whose formerly robust economies are being badly strained.

It could also cause neighboring Russia, which has close ethnic and linguistic ties to eastern and southern Ukraine, to try to inject itself into the country’s affairs. What is more, the Kremlin would be able to hold up Ukraine as an example of what happens when former Soviet republics follow a Western model of free-market democracy.

“Ukraine is a linchpin for stability in Europe,” said Olexiy Haran, a professor of comparative politics at Kiev Mohyla University. “It is a key player between the expanding European Union and Russia. To use an alarmist scenario, you could imagine a situation in Ukraine that Russia tried to exploit in order to dominate Ukraine. That would make for a very explosive situation on the border of the European Union.”

— Jon Ward, White House reporter,The Washington Times

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