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IMF chief Lagarde warns Ukraine over rescue program

An IMF program helping to prop up cash-strapped Ukraine’s stricken economy cannot continue without reform by the authorities in Kiev, International Monetary Fund chief Christine Lagarde warned Wednesday.

“Without a substantial new effort to invigorate governance reforms and fight corruption, it is hard to see how the IMF-supported program can continue and be successful,” Lagarde said in a statement.

The IMF is the main source of rescue financing for Ukraine as the hard-up country battles with crises ranging from falling commodity prices to a new trade embargo by Russia.

The Fund has a $17.5 billion rescue program for Ukraine on condition the government enacts economic reforms and fights corruption.

“I am concerned about Ukraine’s slow progress in improving governance and fighting corruption, and reducing the influence of vested interests in policymaking,” said Lagarde.

“Ukraine risks a return to the pattern of failed economic policies that has plagued its recent history,” she added.

“It is vital that Ukraine’s leadership acts now to put the country back on a promising path of reform.”