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IMF approves $17bn Ukraine bailout package | IMF approves $17bn Ukraine bailout package |
(about 3 hours later) | |
The International Monetary Fund (IMF) has approved a $17.1bn (£10.1bn) bailout for Ukraine to help the country's beleaguered economy. | |
The loan comes amid heightened military and political tension between Ukraine and neighbouring Russia. | |
The loan is dependent on strict economic reforms, including raising taxes and energy prices. | |
The money will be released over two years, with the first instalment of $3.2bn available immediately. | The money will be released over two years, with the first instalment of $3.2bn available immediately. |
The head of the IMF, Christine Lagarde, said the IMF would check regularly to ensure the Ukrainian government followed through on its commitments. | |
In March Ukraine put up gas prices by 50% in an effort to secure the bailout. | |
The government has also agreed to freeze the minimum wage. | |
The bailout had to be approved by the IMF's 24-member board, which includes a Russian representative. | The bailout had to be approved by the IMF's 24-member board, which includes a Russian representative. |
The IMF loan will also unlock further funds worth $15bn from other donors, including the World Bank, EU, Canada and Japan. | |
Russian recession | |
In December last year, Ukraine agreed a $15bn bailout from Russia, but this was cancelled after protests forced out pro-Russian President Viktor Yanukovych. | |
On Wednesday, the IMF warned that Russia was "experiencing recession" because of damage caused by the Ukraine crisis. | |
The fund said $100bn (£59bn) would leave Russia this year, partly caused by US and EU and sanctions. | |
The sanctions were imposed after Russia annexed the Crimea region from Ukraine last month. | |
Pro-Russian activists have taken over scores of government buildings in cities and towns across eastern Ukraine, though the Kremlin denies its forces are involved. | |
The activists have also taken hostages including international monitors. | |
Tens of thousands of Russian troops are stationed close to the Ukrainian border, and Moscow has warned that its soldiers will act if Russian interests in eastern Ukraine - where a majority of the population are Russian-speaking - are threatened. | |
The US and EU have accused Russia of failing to implement the terms of a deal agreed in Geneva aimed at defusing the crisis by disarming illegal militias. | |
They have both stepped up sanctions against Russia this week, naming more individuals and companies facing travel bans and asset freezes. | |
Moscow blames Kiev for the unrest and has condemned the sanctions | |
Further funds | Further funds |
The IMF bailout will also make available $1bn in loan guarantees from the US, which was recently approved by Congress. | |
"Today's final approval for the $17bn IMF programme marks a crucial milestone for Ukraine," said US Treasury Secretary Jacob Lew in a statement. | "Today's final approval for the $17bn IMF programme marks a crucial milestone for Ukraine," said US Treasury Secretary Jacob Lew in a statement. |
He added that the bailout will "enable Ukraine to build on the progress already achieved to overcome deep-seated economic challenges and help the country return to a path of economic stability and growth". | He added that the bailout will "enable Ukraine to build on the progress already achieved to overcome deep-seated economic challenges and help the country return to a path of economic stability and growth". |
Earlier on Wednesday, an international conference in London ended with a commitment to help Ukraine recover tens of billions of dollars worth of assets which were allegedly stolen by the ousted President Yanukovych and his allies. | |