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June 28, 2017

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IMF readies Ukraine bailout as UN rejects Russia's Crimea annexation

KIEV -- The IMF announced a US$14 billion-US$18 billion bailout for Ukraine on Thursday as the U.N. General Assembly refused to recognize Russia's annexation of the Crimea peninsula.

The vital economic breakthrough was reached just as Ukraine's presidential campaign heated up, with the announcement by opposition icon Yulia Tymoshenko that she would contest the race to replace the ousted pro-Russian regime that sent her to jail.

Washington and its 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.

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.

In New York, the non-binding U.N. General Assembly measure passed with a comfortable majority in the 193-member body, with 100 votes in favor and 11 votes against. But 58 abstained and more than 20 did not vote.

Ukraine, which drafted the resolution, welcomed its adoption and called for a "stronger and more concrete" united, international front against Russian aggression.

However Moscow's U.N. envoy Vitaly Churkin claimed the vote was a "moral victory" for Russian diplomacy, saying that "almost half" the U.N. membership refused to support the resolution.

U.N. Secretary-General Ban Ki-moon was due Friday to brief the Security Council on his recent mediation visits to Moscow and Kiev.

German Chancellor Angela Merkel said on Thursday she hoped the threat of further sanctions would 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.

US$27 Billion in World Aid

Kiev's International Monetary Fund agreement — worth the equivalent of 10.8 to 13.1 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," U.S. 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 US$27 billion (19.6 billion euros) over the next two years.

Western support became essential for Ukraine once Russia froze payments on a US$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.

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