IMF chief says Ukraine bailout won't fail

10th April 2014, Comments 0 comments

IMF chief Christine Lagarde voiced confidence Thursday that Ukraine would meet conditions of a bailout and stabilize its economy, which is reeling after Russia's takeover of Crimea.

Lagarde said that she expects to present a bailout plan, which would total $14-18 billion over two years, to the International Monetary Fund's board of governors in late April or early May.

She expects Ukraine to "deliver on its commitments" despite concerns about the health of the Kiev government, which has been in power since just February following an uprising and faces heated tensions from Russia.

"We generally do not enter into negotiations with the idea that the program is going to fail," Lagarde told reporters at the IMF/World Bank annual spring meetings.

The package's goal will be for Ukraine to "restore its financial situation so that it can finance itself, refinance itself and operate without support from the IMF."

Western nations have voiced support for economic support of Ukraine after Russia seized its Crimea region following the pro-Western uprising.

But an IMF bailout could test the popularity of the new government, which will have to agree to tough austerity measures.

Russian President Vladimir Putin has kept ramping up pressure on Ukraine, warning Thursday that Moscow could cut gas supplies if the country does not settle its $2.2 billion energy bill.

World Bank President Jim Yong Kim meanwhile warned that the crisis will have far-reaching effects on the economies of both Ukraine and Russia.

The IMF on Tuesday slashed its growth forecast for Russia for the current year to 1.3 percent, and warned that its economy may contract by as much as 1.8 percent if the crisis with Ukraine is prolonged.

"This is a very serious issue for Russia -- a very serious issue for its growth prospects," Kim told reporters.

"So we simply urge all of the parties to continue with negotiations and find a peaceful means of moving forward," he said.

© 2014 AFP

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