WASHINGTON: The IMF handed Ukraine a $17.5 billion lifeline as the United States agreed to send military aid to bolster its forces against pro-Russian rebels — but stopped short of promising weapons.
The United States also expanded the reach of its economic sanctions, targeting a Russian bank and separatist officials in eastern Ukraine — a move Moscow branded a “political provocation” that would only worsen the crisis.
Ukrainian President Petro Poroshenko welcomed the increased US support in the face of what he called the separatists’ “barbaric aggression,” despite Washington snubbing growing calls for arms and ammunition.
After a call with US Vice President Joe Biden and a meeting in Kiev with sympathetic US congressmen, Poroshenko thanked the United States for the offer to send military equipment — but not weapons — worth $75 million.
Ukraine has asked Western powers for weapons to help it fight the rebellion, but Washington remains cautious and key ally Germany remains flat-out opposed to supplying munitions.
White House spokesman Josh Earnest said President Barack Obama was concerned that sending more weapons to an already unstable region would lead to greater bloodshed.
“The president is mindful of the fact that there is not a military solution to this problem,” he said.
“It is unreasonable to suggest that the United States would be able to provide enough military support to the Ukrainian military that they could overwhelm the military operations that are currently being backed by Russia.”
US officials said the package would include 230 Humvee vehicles, unarmed Raven drones, counter-mortar radars, night vision devices and various medical and communications gear.
Meanwhile, new US sanctions targeted officials in the separatist self-proclaimed Donetsk People’s Republic in Ukraine, as well as a Russian bank and a nationalist group.
The Russian National Commercial Bank has become the largest bank in Crimea since Russia seized the region from Ukraine last year.
Also listed was the Eurasian Youth Union, a nationalist Russian group said to recruit fighters to join the rebels.
Three officials of the pro-Moscow government of former Ukraine president Viktor Yanukovych, who was overthrown in an uprising in February 2014, were also added to US sanctions lists.
The sanctions freeze any assets the individuals and institutions hold on US territory and ban Americans from doing business with them.
Russia’s deputy foreign minister Sergei Ryabkov said that Washington’s allegations that Moscow is backing the separatist movement were “dreary and pointless,” as he slammed the new sanctions.
“It’s difficult to understand what is guiding the US Treasury Department and other authorities in introducing sanctions and expanding the sanctions lists,” he told the Interfax news agency.
“We see no logical link that would in some way explain such decisions, given Washington’s declaration that it is interested in the situation returning to normal.”
The Washington-based International Monetary Fund, meanwhile, gave Kiev breathing room to rebuild its shattered finances, reeling from the fighting in its industrial heartland.
The four-year, $17.5 billion (15.5 billion euro) aid plan replaces an existing IMF program, less than a year old, that proved inadequate to stabilize Ukraine’s finances.
Five billion dollars will be disbursed immediately and a total of 10 billion in the first year. The “heavily front-loaded” program will support “deep and wide-ranging policy reforms,” IMF managing director Christine Lagarde said.
First outlined by Lagarde in early February, after the IMF reached a preliminary agreement with Ukrainian authorities on economic reforms, the IMF aid is to be part of about $40 billion in assistance from the international community.
The White House welcomed the plan and made it clear it saw it as part of the international effort to shore up Ukraine against its foes.
“The United States is working alongside international partners to provide Ukraine with the financial support it needs,” it said.
Ukrainian Prime Minister Arseniy Yatsenyuk told a briefing in Kiev that the bailout was a reward for reforms already undertaken and he vowed the government would continue.
“It obliges us to keep going, not to stop,” he said.
Despite a February 12 agreement in Minsk to halt hostilities, fighting has continued around Debaltseve, Donetsk and the port of Mariupol, killing at least 65 Ukrainian troops.
There has also been an escalation of tensions between Russia and the West.
Moscow has withdrawn from the landmark Treaty on Conventional Forces in Europe, and the United States has begun to deploy 3,000 troops on a three-month exercise to the Baltic region.
“If Russia continues to support destabilizing activity in Ukraine and violate the Minsk agreements and implementation plan, the already substantial costs it faces will continue to rise,” the US Treasury warned.
President Vladimir Putin’s Russia, meanwhile, denies allegations from Kiev and Western capitals that it has sent heavy weapons and thousands of troops to support the rebels.