IMF to give Ukraine $17 billion

WASHINGTON – The International Monetary Fund board approved a two-year, $17 billion loan package Wednesday for cash-strapped Ukraine as it seeks to regain stability following Russia’s annexation of Crimea.

The IMF assistance pledged in March was hinged on economic reforms in Ukraine, including raising taxes, freezing the minimum wage and raising energy prices – all steps that could hit households hard and strain the interim government’s tenuous hold on power.

“Urgent actions were necessary. Urgent decisions were taken by Ukraine and decisions now have just been taken by the IMF,” IMF Managing Director Christine Lagarde said.

Ukraine’s interim government is caught between the demands of international creditors and a restive population that has endured decades of economic stagnation, corruption and mismanagement.

The IMF’s decision to approve the $17 billion loan paves the way for Ukraine to receive $15 billion in additional assistance pledged by the World Bank, the European Union, Canada, Japan and other European entities, and $1 billion in loan guarantees from the U.S. that Congress recently approved. As part of the deal, Ukraine will be required to use some of the loan to repay money it already owes the monetary fund.

Ukraine, a nation of 46 million, is in turmoil after Russia annexed Crimea. Russian President Vladimir Putin has massed 40,000 troops on Russia’s border with Ukraine in what many fear is the first step to an invasion. Russia’s actions have created a standoff with the United States and many European nations.