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IMF offers Ukraine up to $18B in loans

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By The Associated Press
Thursday, March 27, 2014, 9:21 p.m.
 

KIEV, Ukraine — The world rushed on Thursday to help Ukraine, with the International Monetary Fund pledging up to $18 billion in loans, the U.N. condemning the vote that drove Crimea into Russian hands and Congress backing even harsher sanctions against Russia.

Yet even with such intensive help to prop up the teetering economy, Ukraine's prime minister warned of painful times ahead from economic reforms that were sure to drive up energy prices.

Meanwhile, Yulia Tymoshenko, one of the country's most divisive figures, announced she would run for president — a move sure to impact Ukraine's turbulent politics.

President Obama called the swell of international support a “concrete signal of how the world is united with Ukraine.”

In a passionate address to parliament in Kiev, Prime Minister Arseniy Yatsenyuk warned that Ukraine was “on the brink of economic and financial bankruptcy” and laid out the fixes needed to put the country back on track.

“The time has come to tell the truth, to do difficult and unpopular things,” Yatsenyuk said, adding that Ukraine was short $25.8 billion — “equivalent to the entire state budget for this year.”

The IMF loan, which is expected to range between $14 billion and $18 billion, hinges on structural reforms that Ukraine has pledged to undertake.

Ukraine's new government finds itself caught between the demands of international creditors and a restive population that has endured decades of economic stagnation, corruption and mismanagement.

The reforms demanded by the IMF — which include raising taxes, freezing the minimum wage and hiking energy prices — will hit households hard and are likely to strain the interim government's tenuous hold on power.

In Washington, Congress overwhelmingly backed legislation in the House and Senate to aid cash-strapped Ukraine and punish Russia for its annexation of Crimea.

On a voice vote, the Senate approved a measure that would provide $1 billion in loan guarantees to Ukraine and give Obama broad authority to impose more sanctions on Russia and President Vladimir Putin's inner circle.

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