Ukraine crisis could have severe economic impact

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BERLIN: International Monetary Fund chief Christine Lagarde warned in a German newspaper interview on Monday that the Ukraine crisis could have “severe” economic consequences for other countries.

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Lagarde also told the Han–delsblatt business daily that a $17-billion aid package granted to Ukraine by the IMF would not be enough.

“The crisis in Ukraine is a danger which is very difficult to gauge (and) whose contagion risk for other countries can barely be predicted,” she said.

“All the same, it can have severe economic consequences.”

Lagarde will meet German Chancellor Angela Merkel in Berlin on Tuesday for annual talks, alongside the heads of the OECD, World Bank, World Trade Organization and International Labor Organization, on the global economic situation.

Asked where the biggest dangers lay, the IMF chief pointed to the turmoil in Ukraine having an impact on international trade, foreign direct investment, international capital flows and Europe’s energy supply.

“Ukraine needs much more than $17 billion. For example, bilateral help from abroad and financial help from other international financial institu–tions,” Lagarde said, adding that the international com–munity had no choice.

“We can’t simply say the situation is too precarious, therefore we’re not giving money at the moment.”

Pro-Russian rebels have claimed voters in two eastern Ukrainian regions massively backed independence in a disputed poll Sunday, as Uk–raine gears up for presidential elections on May 25 after protests in February forced out pro Moscow president Viktor Yanukovych.

AFP

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