IMF offers Ukraine up to $18 billion in loans to stave off economic collapse

March 2014UKRAINE – The world rushed Thursday to help Ukraine, with the International Monetary Fund pledging up to $18 billion in loans, the U.N. condemning the vote that drove Crimea into Russian hands and the U.S. Congress backing even harsher sanctions against Russia. Yet even with such intensive help to prop up the teetering economy, Ukraine’s prime minister warned of painful times ahead from economic reforms that were sure to drive up energy prices. Meanwhile, Yulia Tymoshenko, one of the country’s most divisive figures, announced she would run for president — a move sure to impact Ukraine’s turbulent politics. President Barack Obama called the swell of international support a “concrete signal of how the world is united with Ukraine. The decision to go forward with an IMF program is going to require a lot of courage,” Obama said, speaking in Rome. “It will require some tough decisions.” In a passionate address to parliament in Kyiv, Prime Minister Arseniy Yatsenyuk warned that Ukraine was “on the brink of economic and financial bankruptcy” and laid out the fixes needed to put the country back on track. “The time has come to tell the truth, to do difficult and unpopular things,” Yatsenyuk said, adding that Ukraine was short $25.8 billion — “equivalent to the entire state budget for this year.” The IMF loan, which is expected to range between $14 billion and $18 billion, hinges on structural reforms that Ukraine has pledged to undertake. Ukraine’s new government finds itself caught between the demands of international creditors and a restive population that has endured decades of economic stagnation, corruption and mismanagement.
The reforms demanded by the IMF — which include raising taxes, freezing the minimum wage and hiking energy prices — will hit households hard and are likely to strain the interim government’s tenuous hold on power. Ukraine, a nation of 46 million, is battling to install a semblance of normalcy since President Viktor Yanukovych was ousted in February after months of protests ignited by his decision to back away from closer relations with the EU and turn toward Russia. Over the last few weeks, an interim government has formed, Ukraine lost Crimea to Russia and further possible military incursions by Russia are feared. “This is a kamikaze government that perfectly well understands that there is no other way to stabilize Ukraine,” said Viktor Zamyatin, analyst with the Kyiv-based Razumkov Center think-tank . “The catastrophic state of Ukraine’s economy has forced the government’s hand.” But he said it could pay a steep price. “It is hard to explain to the voter that the worsening of the economy has happened not because of the revolution, but because of Viktor Yanukovych’s policies,” he said. One unpredictable source of potential unrest comes from the nationalist Right Sector movement, which rallied hundreds of protesters outside parliament on Thursday in a demand for Interior Minister Arsen Avakov’s resignation following the killing this week of one of their leaders. The group played a key role in bringing about Yanukovych’s ouster. – Montreal Gazette
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This entry was posted in Apathy, Anger, Mistrust, Disillusionment, Bank Run, Banking Crisis, Boom and Bust Cycles, Civil Unrest, Conflict Among Nations, Economic Collapse, Economic Hardship or Loss, Economic impact of natural disasters, Fiat Money Printing Fiasco, Financial market turmoil, Flashpoint for war, Geopolitical Crisis, Infrastructure collapse, Political Corruption, Political turmoil, Protests, Resource War, Struggle for Survival, The Pyramid Model, Unemployment rising, Unsustainable Debt Burden. Bookmark the permalink.

2 Responses to IMF offers Ukraine up to $18 billion in loans to stave off economic collapse

  1. Joseph Sonny Skies says:

    Alvin; didn’t Russia first offer a bailout to Ukraine that was accepted by their leader…Perhaps most of the unrest was from western plants? Now IMF will bail out? I think the world just crashed.

  2. It’s truly very complicated in this active life to listen news on Television, thus I just use internet for
    that reason, and get the most up-to-date news.

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