IMF Agrees On $14-18 Billion Bailout Package For Ukraine
http://www.rferl.org/content/ukraine-imf-loan-agreement-us/25311500.html
By RFE/RL
March 27, 2014
The International Monetary Fund (IMF) has promised to loan of between $14 billion and $18 billion to cash-strapped Ukraine.
After two weeks of talks in Kyiv, the IMF said in statement on March 27 that it had reached "a staff-level agreement with the authorities of Ukraine on an economic reform program that can be supported by a two-year Stand-By Arrangement with the IMF."
It said the precise amount would be determined "once all bilateral and multilateral support is accounted for."
The loan will help prop up Ukraine's struggling economy, further weakened lately by three months of antigovernment protests and the subsequent annexation of its Crimean Peninsula by Russia.
The IMF said Ukraine "has achieved some stability" following the "intense economic and political turbulence of recent months" but said it still faces "difficult challenges."
The loan, which hinges on structural reforms that Ukraine has pledged to undertake, will unlock further credits to reach a total of $27 billion in international support over the next two years.
It is subject to approval by the IMF's Executive Board, expected to come in April.
In Washington, the White House welcomed the agreement as "a powerful sign of support from the international community for the Ukrainian government."
Acting Prime Minister Arseniy Yatsenyuk said on March 27 that Ukraine's gross domestic product could fall 10 percent in 2014 if the IMF loan is not approved, causing Ukraine to default.
Speaking in parliament, he said inflation this year would be between 12 and 14 percent.
Ukraine's confrontation with Moscow over Crimea is likely to deal a further blow to its economy.
Yatsenyuk said the price Ukraine paid for Russian gas supplies would rise 79 percent from April 1 -- to $480 per 1,000 cubic meters.
Moscow claims Kyiv also owes it more than $10 billion for gas deliveries.
According to Yatsenyuk, "Ukraine is on the edge of economic and financial bankruptcy."
Based on reporting by Reuters, AP, AFP, and RFE/RL
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