US welcomes IMF deal on aid to Ukraine

[WASHINGTON] The United States welcomed Thursday the International Monetary Fund's announcement of a new US$17.5 billion bailout deal for Ukraine, urging the crisis-torn country to undertake the reforms required by the program.

"Fully implemented, this ambitious IMF programme will play an important role in helping to unleash Ukraine's considerable untapped economic potential," said treasury secretary Jacob Lew in a statement.

The IMF on Thursday gave preliminary approval of a US$17.5 billion four-year loan in exchange for economic reforms.

The new loan replaces a previous two-year, US$17 billion programme announced in April that has proven inadequate to stabilise Ukraine's finances as the country fights a pro-Russia insurgency in the industrialised east.

In total, Kiev is expected to receive US$40 billion in aid from the international community. A cease-fire agreement between Ukraine and the rebels was announced Thursday, with the truce to take effect on Sunday.

"The United States, along with its international partners, remains committed to ensuring that Ukraine has the financial and technical assistance it needs as it undertakes its far-reaching reform programme," Mr Lew said.

In mid-January, the United States pledged a new loan guarantee of US$2 billion on condition that Ukraine remained on track with its IMF programme.

Two IMF programmes for Ukraine, in 2008 and 2010, had been abandoned after the Ukrainian authorities refused to implement unpopular reforms, including ending subsidies for the gas sector.

AFP