US urges countries to help Ukraine's economic rescue

 
Pro-Russian activists warm themselves by a fire outside the Security Service building in the eastern Ukrainian city of Lugansk on 11/04/14 Protests continue in Ukraine, but its economy needs international help, says the US

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US Treasury Secretary Jacob Lew has urged other countries to contribute more to the economic rescue of Ukraine.

He told the International Monetary Fund (IMF) that Ukraine's "sizeable financing needs" meant other nations must add to its $1bn (£597m, 720m euros) loan guarantee.

The appeal came as Ukraine's interim prime minister offered to devolve more powers to eastern regions.

Pro-Russian separatists there are defying the government.

Meanwhile, Washington on Friday announced a third round of sanctions against individuals it has linked to Russia's annexation of Crimea.

The US Treasury said it had frozen the US-based assets of one former Ukrainian official, a Crimea-based energy firm and six Crimean leaders, including the chairman of the Crimea electoral commission and the mayor of Sevastopol.

Immediate steps 'critical'

Mr Lew says the US is "bolstering the IMF program through a complementary aid package, which includes a $1bn loan guarantee and additional technical assistance," in a statement to the IMF.

"It is critical that the international community - multilateral development banks and bilaterals - take immediate steps to also support the IMF program by providing financing support, given the sizeable financing needs," he adds.

US Treasury Secretary Jack Lew speaking in Washington on 11 April 2014 US Treasury Secretary Jack Lew has described Russia's annexation of Crimea as "illegal and illegitimate"

The IMF announced a rescue package worth as much as $18bn last month in a bid to aid Ukraine's economy, and this has been bolstered to $27bn with contributions from Europe and the US.

In exchange, the IMF has demanded from Ukraine strict government spending cuts and tax increases.

Ukraine is being squeezed by Russia's decision this month to stop providing Ukraine with subsidised natural gas.

That discount had been agreed between Russian President Vladimir Putin and Ukraine's then President Viktor Yanukovych, in which Russia also said it would buy $15bn-worth of Ukrainian government bonds.

Interim Ukrainian Prime Minister Arseniy Yatsenyuk: "We've made an offer... but it's up to them [the separatists] to decide"

Separately on Friday, Ukraine's interim Prime Minister Arseniy Yatsenyuk offered to devolve more powers to the east of the nation and is holding talks with regional leaders in Donetsk, where activists demanding self-rule had occupied a government building.

The separatist protests in Ukraine's eastern cities follow Russia's annexation of Crimea last month - described as the biggest political confrontation in Europe since the end of the Cold War.

The IMF is also asking Ukraine to crack down on corruption and end central bank support for the Ukrainian currency.

Ukraine's new government has said it needs $35bn to pay its bills over the next two years.

Ukraine has not paid off its debt to Russian gas supplier Gazprom despite the passing earlier this week of a deadline for the nation to start reducing its debt. Gazprom says Ukraine owes it $2.2bn.

European Energy Commissioner Guenther Oettinger told Austria's ORF radio he was working on a plan to help Ukraine pay its gas bills to ensure its debts do not rise.

Gas supplies

On Friday, President Putin moved to assure the EU it would not cut off gas supplies. Brussels said it would stand with the new authorities in Kiev if the Kremlin carries out a threat to turn off the tap to Ukraine.

"I want to say again: We do not intend and do not plan to shut off the gas for Ukraine," Mr Putin said in televised comments at a meeting of his advisory Security Council, the Reuters news agency reported.

A pressure gauge at an underground gas storage facility in the village of Mryn, 120 km (75 miles) north of Kiev taken on 21 May 2013 The EU says it can pump gas back to Ukraine using reverse-flow pipeline technology

Russia has turned off the gas tap to Ukraine before, in 2006 and 2009. As the 2009 row escalated, gas supplies to Europe through Ukraine were suspended for two weeks.

But Russia may be reluctant to do it again as it is dependent on revenue from EU customers.

The EU and US have imposed sanctions on a number of Russian and Ukrainian officials in response to Russia's annexation of Crimea.

The US Treasury says its latest round of sanctions target the US-based assets of one former Ukrainian official, a Crimea-based energy firm and six Crimean leaders, including the chairman of the Crimea electoral commission and the mayor of Sevastopol.

Talks between Russia, Ukraine, the US and the EU - the first four-way discussions since the crisis began - are scheduled to take place on 17 April in Geneva.

 

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  • rate this
    -2

    Comment number 67.

    I think Russia is helping Ukraine.... By slowly taking it over.

    It just shows how weak and pathetic the EU is.

  • rate this
    -4

    Comment number 66.

    55smudge
    I agree will everything you say except, "Putin, is very smart". Putin is a cold war relic; a died-in-the-wool soviet communist gangster who has surrounded himself with sycophants. The longer he stays in power, the more unstable, belligerent and dangerous Russia will become. He is not smart; he is cunning, but he has shown he is slipping over this affair.

  • rate this
    +4

    Comment number 65.

    It is easy comment when the situation does not affect you.
    For those of us living in this region, we wand the US and the EU involved.

    This situation arose when Russia tried to stop Ukraine from signing co-operation agreements with the EU. This is what the MAJORITY of people in the Ukraine want, they also want similar agreements with Russia. Ukraine does not want to choose, it can be a bridge.

  • rate this
    -4

    Comment number 64.

    For those who question why the EU and USA are anxious about Putin and their motivations go and read a bit of history concerning the run up to the 2nd World War. There are a lot of parallels between events then and now.
    The military build up, the reassurances of no conflict, the test of wills, the scrapping of democracy, it's all there. I bet people back then also buried their heads in the sand.

  • rate this
    +5

    Comment number 63.

    I was keen to help Ukraine at first, but when learning the new government started from Neo-Nazis, my sympathy and support for them dropped. I like the idea of helping others, but that doesn't mean I'm right and I personally don’t like the idea of the Russian government saying they can go anywhere in the world to help those who were from Russia, and I think Putin is very dangerous.

  • rate this
    +32

    Comment number 62.

    How is it that the U S A & Western Europe, supposedly struggling so with the effects of the financial meltdown can still afford to fight wars and offer billions in aid via the I M F to aid the Ukraine economy?

    If the West keeps expanding East with its greedy intentions how do we expect the Russians to react.
    We did encourage the unrest in the first place to get access to ukraine.

  • rate this
    +5

    Comment number 61.

    The US has already "helped" Ukraine, providing funding for the recent coup. NGO's, like National Endownment for Democracy, and USAID, have stoked the troubles, paid "protesters" and mercenaries, and helped overthrow an unpopular, but democratically elected government. Maybe it's time the west stopped interfering in a situation which it has provoked, but cannot win.

  • rate this
    +16

    Comment number 60.

    Ordinary Ukrainians have already seen their heating and gas bills skyrocket (with more increases to come). Add higher taxes and austerity measures as a condition of all those US/EU/IMF loans and they'll be wishing they were back with Russia in no time.

  • rate this
    +10

    Comment number 59.

    There should be a clearer policy on when or if to intervene in a country - sovereign rights of a country should not allow it to mistreat its citizens - but on the other hand its up to those citizens to reclaim their rights - In balance maybe it is best if we kept out of it and tried to make our own country better...

  • rate this
    +2

    Comment number 58.

    49. Greg

    There are MANY people in Ukraine who are Russian and found themselves in Ukraine when the USSR broke up.

    For sure Mr Putin seeks to motivate these people by hysterical references to the "Neo Nazis"

    The interim UA govt. didn't help by having too many members of an ultra right wing party & abolition of the law allowing the country’s regions to make Russian a 2nd official language

  • rate this
    0

    Comment number 57.

    Greg @49
    "Warning
    all pro-Moscow
    propaganda"

    And in Moscow, "Warning, it's all Western propaganda"

    The clue to reality, for citizens everywhere, is in the question, "What freedom is yours, in speech, and spend, and vote, and representation?"

    Unless you KNOW that your colleague, your boss, your banker and your leader is your EQUAL partner, you should allow yourself just a little home skepticism?

  • rate this
    +6

    Comment number 56.

    Let the Ukrainian anarchists dig themselves out of the hole they dug for themselves. In other words, let them wipe their own backsides.

  • rate this
    -2

    Comment number 55.

    Putin, is very smart, but also very dangerous and needs to be nipped in the bud. Due to the Ukraine crisis, he feels, it's also an opportunity to rankle US, by upsetting the stability of the West through his bullying actions, which he likes playing. The West, is no threat to Russia, and he know's it, but he has this bent notion, that he can resurrect the Soviet past in all its maligned glory.

  • rate this
    +4

    Comment number 54.

    Why are we dealing with the issues of a Sovereign Nation, who have massive debts to the Russians, when we have more important matters at home to resolve.

    We need an ethical foreign policy and that does not mean religiously following the " shoot first ask questions later" USA policy.

  • rate this
    +4

    Comment number 53.

    South Stream gas pipeline project linking Russia to Central Europe which when built will bypass Ukraine . This is being built by Russian & German partners, completed by 2015

    So the Russians may not turn Ukraine gas of now, but by the end of 2015 they will be doing.

    Russia is the only country with the kahunas to stand up to the west. But not stupid enough to turn the gas off just yet.

  • rate this
    +3

    Comment number 52.

    Why is it we always look to Team America for help whenever there are problems in the world. More often than not, the USA is the ultimate cause of the problem and most definitely not part of the solution!

    The problems being faced by Ukraine are reminiscent of the cold war. Russia and the USA are using the citizens of Ukraine like a rope in a tug of war. It's pathetic, quite frankly.

  • rate this
    +2

    Comment number 51.

    I've got an idea, stay out of it. The UK is in major amounts of debt and all we need is paying for weapons to use in a silly war. It makes the debt rise. Soldiers get killed and our millitary gets smaller.

  • rate this
    -2

    Comment number 50.

    32. Fujikid : Yanukovych ran UA largely for his family's benefit.He wanted terms that the EU could not accept.

    For sure,the US,EU and Russia all made plays to influence. It was a broad spectrum of UA ppl - for the second time - that ended Yanukovych.

    Putin has already seized Russian assets of the future next President

    'Russian interests' in Crimea ? ! RU agreed Crimea part of UA in' 91.

  • rate this
    -2

    Comment number 49.

    WARNING to other readers: take with a big pinch of salt what you read in this forum, most comments here are not genuine - it doesn't take a genius to see that it's all pro-Moscow propaganda, masterminded and paid for by the Kremlin, and designed to stir mistrust of the US & the rest of the free world. They are out in their numbers to build a favourable view of the Kremlin and its bullying tactics.

  • rate this
    0

    Comment number 48.

    Too late we cry, 'not our fight!'

    From aggressive to pacifist but piano keys, the score Mammon's.

    We don't trust ourselves as equal partners, so ruled by fear & greed, around the world driving 'hard bargains' with good & bad alike, our 'commerce' backed by super-power might & secret services.

    Why should any client state or any rival or any opponent afford trust in either us or our governments?

 

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