As the political crisis continues to deepen here, worries are mounting that the battle over the flawed presidential election could bring Ukraine to the brink of financial collapse - a sharp turnaround for a young democracy that has shown promising economic growth.

Wednesday, opposition candidate Viktor Yushchenko won a symbolic victory when Ukraine's parliament voted to dismiss the government of Prime Minister Viktor Yanukovich, the declared winner in the election. Mr. Yanukovich and Mr. Yushchenko - who both claim the presidency - sat down for talks Wednesday in the presence of European mediators and outgoing President Leonid Kuchma.

The Supreme Court has yet to decide whether the disputed Nov. 21 vote will be declared fraudulent. And while the nation waits for a decision from the court, the effect of the high-stakes political drama on the economy is coming under increasing scrutiny.

Monday, President Kuchma spoke darkly of the consequences of continued turmoil. "In a few more days, the financial system will fall apart like a house of sand and neither the president nor the government can be held responsible for that," he said.

An international economic analyst, speaking off the record, said panic must be nipped in the bud. "Unfortunately, Mr. Kuchma may have generated a self-fulfilling prophecy," he said.

"When the president of a country speaks of financial collapse, people run for the exits, and a run on the banks can be provoked," he continued. "Things are now on a knife edge. There could be a self-perpetuating downward economic spiral whose initial spark was political. There is a real danger that Kuchma might have provoked the very thing he was warning against."

Indeed, there were reports of people in industrial regions of the east lining up to make withdrawals from cash machines, fearing a collapse of Ukraine's banking system similar to the great crash and national default in Russia in 1998. There was no such panic in Kiev, but the US dollar was becoming harder to obtain in some downtown currency-exchange kiosks.

"I am afraid this peaceful revolution is going to hit working people very hard," says one driver, who gave his name as Viktor. "There is Viktor Yushchenko, Viktor Yanukovich, and I am Viktor the working man. I do not like what I see. We are facing an economic disaster, like in Russia in '98."

"No, no, no, no, no," says Tomas Fiala, the Managing Director of Dragon Capital, a brokerage firm in Ukraine, in soft and reassuring tones. "There is no reason to think so negatively, just because Kuchma has made a political threat. Of course, it was not a sensible thing to say. But he's in agony now, trying to hang onto power and blame the opposition."

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