Even as political leaders were negotiating a ceasefire for eastern Ukraine, the IMF has unveiled a new bailout package for Kyiv. The battle with the separatists has left Ukraine on the brink of bankruptcy.
The International Monetary Fund (IMF) and embattled Ukraine have reached an initial deal on a new financial rescue package worth $17.5 billion, a potential “turning point” for Kyiv, IMF chief Christine Lagarde confirmed on Thursday.
The IMF’s contribution is part of a total of $40 billion Ukraine is set to receive from the international community.
Talks on the country’s fourth bailout in 10 years had been underway in the Ukrainian capital for days after the last aid program from April 2014 failed to stabilize Ukraine’s finances as it battles pro-Russian separatists in the east.
“I am pleased to announce that the IMF team working in Kyiv has concluded a staff-level agreement with the Ukrainian government on a new economic reform program that would be supported by an extended fund facility… from the IMF,” Lagarde said during the press conference in Brussels.
Lagarde explained that the new deal would support “bold policy reforms” in Kyiv, which is under pressure from abroad to cut corruption and overhaul its finances. The reforms will include an in-depth restructuring of Naftogaz, Ukraine’s state-owned natural gas firm.
The four-year plan is an “ambitious program; it is a tough program and it is not without risk,” said the IMF leader, adding “but it also a realistic program and its effective implementation, after consideration and approval by our executive board, can represent a turning point for Ukraine.”
Lagarde’s comments came as intense negotiations in the Belarusian capital of Minsk between Ukrainian, rebel, Russian, German, and French leaders tried to resolve deep disagreements about the future of the country.
es/jil (AFP, Reuters)