KIEV: The International Monetary Fund (IMF) announced on Thursday (Friday in Manila) a $14-billion to $18-billion bailout for Ukraine that requires the crisis-hit country to pursue painful and unpopular reforms to avert bankruptcy amid its escalating standoff with Russia.
The vital economic breakthrough was reached just as Ukraine’s presidential campaign heated up with the announcement by opposition icon Yulia Tymoshenko that she will contest the race to see who will replace the ousted pro-Russian regime that sent her to jail.
Washington and its European Union (EU) allies hope the rescue and a mounting diplomatic offensive against Russia should keep Ukraine on a stable enough footing to conduct snap polls on May 25 that could help unite the culturally splintered country of 46 million behind one democratically elected leader.
But the pledge of Western assistance comes amid growing worries about a rapid Russian buildup at Ukraine’s eastern border that one Kiev official said had now reached 100,000 troops.
German Chancellor Angela Merkel said on Thursday she hoped the threat of further sanctions would be enough to keep Russia’s expansionist ambitions in check following its annexation of Crimea—an incursion that has left the Kremlin more isolated from the West than at any stage since the 1989 fall of the Berlin Wall.
$27 billion in world aid
Kiev’s IMF—worth the equivalent of 10.8 billion to13.1 billion euros—imposes tough economic conditions that will alter the lives Ukrainians who have grown accustomed to the comforts of Soviet-era subsidies and welfare benefits.
But it also appears to herald a fundamental shift from a reliance in Kiev on Russian help to save a crumbling system, to a commitment to the types of free-market efficiencies that could one day bring Ukraine far closer to the West.
“This significant support will help stabilize the economy and meet the needs of Ukrainian people over the long term because it provides the prospect for true growth,” US President Barack Obama said in Rome.
The Fund’s “standby arrangement” will form the heart of a broader package released by other governments and agencies amounting to $27 billion (19.6 billion euros) over the next two years.
Western support became essential for Ukraine once Russia froze payments on a $15 billion (10.9 billion euro) loan it awarded ousted President Viktor Yanukovych for his decision to ditch a historic EU trade and political relations pact.
Prime Minister Arseniy Yatsenyuk has now made sure that Ukraine will be getting even more money from the West after earlier signing the political portion of the EU deal ditched by Yanukovych—moves that are likely to further unsettle the Kremlin.