Skip to main content
Advertising

Originally published May 1, 2014 at 6:18 AM | Page modified May 1, 2014 at 8:03 AM

  • Share:
           
  • Comments (0)
  • Print

IMF board approves $17 billion for Ukraine

The International Monetary Fund board on Wednesday approved a two-year, $17 billion loan package for cash-strapped Ukraine as it seeks to regain stability following Russia's annexation of Crimea.


Associated Press

advertising

WASHINGTON —

The International Monetary Fund board on Wednesday approved a two-year, $17 billion loan package for cash-strapped Ukraine as it seeks to regain stability following Russia's annexation of Crimea.

The IMF assistance pledged in March was hinged on economic reforms in Ukraine, including raising taxes, freezing the minimum wage and raising energy prices -- all steps that could hit households hard and strain the interim government's tenuous hold on power.

"Urgent actions were necessary. Urgent decisions were taken by Ukraine and decisions now have just been taken by the IMF," IMF Managing Director Christine Lagarde told reporters at the monetary fund's headquarters.

Ukraine's interim government finds itself caught between the demands of international creditors and a restive population that has endured decades of economic stagnation, corruption and mismanagement.

The IMF's decision to approve the $17 billion loan paves the way for Ukraine to receive $15 billion in additional assistance pledged by the World Bank, the European Union, Canada, Japan and other European entities, and $1 billion in loan guarantees from the U.S. that Congress recently approved. As part of the deal, Ukraine will be required to use some of the $17 billion loan to repay money it already owes the monetary fund.

Ukraine, a nation of 46 million, is in turmoil after Russia annexed Crimea. Russian President Vladimir Putin has massed 40,000 troops on Russia's border with Ukraine in what many fear is the first step to an invasion. Russia's actions have created a standoff with the United States and many European nations.

"Today's final approval for the $17 billion IMF program marks a crucial milestone for Ukraine," Treasury Secretary Jacob Lew said in a statement. "The IMF program, in conjunction with bilateral assistance from the United States and other nations, will enable Ukraine to build on the progress already achieved to overcome deep-seated economic challenges and help the country return to a path of economic stability and growth."

Lagarde said there were risks to the IMF loan but that Ukraine had demonstrated during the past few weeks that it can undertake reforms, such as ones addressing its exchange rate and the price of natural gas. "We believe that Ukraine has an opportunity to seize the moment," she said.

Asked about recent sanctions that the U.S. and European Union have imposed on Russia, Lagarde said only that the IMF was not designing sanctions, but was trying to improve the situation in Ukraine so that stability can be restored.

"We very strongly encourage the parties to negotiate to come to terms, and whether it's a question of the future price of gas, the payment of arrears -- we very much hope the partners will find an agreement," she said.



Want unlimited access to seattletimes.com? Subscribe now!

News where, when and how you want it

Email Icon

The Seattle Times Historical Archives

Browse our newspaper page archives from 1900-1984

Career Center Blog

Career Center Blog

The power of good manners


Advertising
The Seattle Times

The door is closed, but it's not locked.

Take a minute to subscribe and continue to enjoy The Seattle Times for as little as 99 cents a week.

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited seattletimes.com content access is included with most subscriptions.

Subscriber login ►
The Seattle Times

To keep reading, you need a subscription upgrade.

We hope you have enjoyed your complimentary access. For unlimited seattletimes.com access, please upgrade your digital subscription.

Call customer service at 1.800.542.0820 for assistance with your upgrade or questions about your subscriber status.

The Seattle Times

To keep reading, you need a subscription.

We hope you have enjoyed your complimentary access. Subscribe now for unlimited access!

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited seattletimes.com content access is included with most subscriptions.

Activate Subscriber Account ►