January 29, 2015

U.S. to provide Ukraine $2 B in loan guarantees


KYIV – The United States has pledged $2 billion in loan guarantees to Ukraine to help Kyiv with “near-term social spending” this year, and said it was ready to step up sanctions against Russia if needed.

The loan agreement was signed by U.S. Treasury Secretary Jack Lew and Ukrainian Finance Minister Natalia Jaresko in Kyiv on January 28.

Mr. Lew said the loan guarantees were contingent on Ukraine continuing with fiscal and anti-corruption reforms and remaining on track to meet the conditions of its loan program with the International Monetary Fund (IMF).

An IMF delegation is now in Kyiv negotiating a bailout package that is currently worth $17 billion. The European Union earlier this month made a similar pledge of 1.8 billion euros ($2.1 billion U.S.) to strengthen Ukraine’s economy.

After the signing, Ms. Jaresko said that the loan agreement will allow Ukraine “to more actively implement reforms.”

Mr. Lew told reporters the U.S. was prepared to step up sanctions against Russia over its support for separatists who have seized parts of two eastern provinces and are fighting government forces. “We remain prepared to do more [on sanctions] if necessary. To that end, we will continue to work with our allies to increase the pressure on Russia,” Lew said.

However, Mr. Lew said existing sanctions could be eased if Russia abided by the terms of a ceasefire deal signed in Minsk in September 2014.

With reporting by Reuters, Agence France-Presse, the Associated Press and Interfax.