March 04, 2014, 08:26 am
US to work on $1B Ukraine loan package
By Justin Sink
The Obama administration on Tuesday said it wants to provide $1 billion in loan guarantees to Ukraine as part of an economic assistance package designed to stabilize the country.
The White House said it would work with Congress to provide the economic help to Ukraine, where the economy is in turmoil following the ouster of the country's president and a subsequent military offensive by Russia, which has sents troops into the country.
According to the White House, the loan guarantees are intended to help Ukrainian citizens who could see the loss of generous energy subsidies from Russia, which has questioned the legitimacy of the Ukrainian government.
The U.S. is also dispatching “highly experienced technical advisers” to assist officials at the National Bank of Ukraine and the Ministry of Finance in a bid to stabilize the country’s finances. And American financial experts will assist Ukraine in implementing reforms to its energy sector.
“The new Ukrainian government has inherited an economy with enormous potential but that is currently financially fragile and uncompetitive,” the White House said in a statement. “The Government of Ukraine has said publicly that it will work to meet these urgent challenges. As the government implements important reforms, the United States will work with its bilateral and multilateral partners to ensure that Ukraine has sufficient financing to restore financial stability and return to growth.”
President Obama on Monday called on Congress to work on an assistance package to Ukraine, and lawmakers have indicated they will begin working on it next week.
The administration is also offering assistance to help Ukrainians fight corruption and recover stolen assets, as well as election advisors and monitors in a bid to boost the legitimacy of Ukraine’s upcoming election.
And the U.S. will help Ukraine navigate the World Trade Organization should Russia try to take politically motivated trade actions, including in the energy sector.
The steps are in addition to efforts by the International Monetary Fund underway in Kiev.
“The IMF will be at the front lines of an international package for Ukraine and is positioned to support robust and market-oriented reforms needed to restore Ukraine to economic health, including via providing large-scale financing and technical support,” the White House said.
Secretary of State John Kerry arrived in the Ukrainian capital of Kiev on Tuesday in another show of support for the nation's government.
The administration also is moving to impose sanctions against Russia. The U.S. has suspended preparations for the Group of Eight summit to be hosted by Russia in Sochi and suspended trade talks with Russian government officials who had met with top Obama administration officials as recently as last week in Washington.
The Pentagon has also put on hold all military-to-military engagements between the U.S. and Russia, including bilateral exercises and meetings.
Kerry said the U.S. is also considering freezing the U.S. assets of Russian officials or their allies in Crimea and barring them from entering the United States. The administration may also target Russian banks and punish companies found to have helped the Crimean occupation.
“Over time, this will be a costly proposition for Russia, and now is the time for them to consider whether they can serve their interests in a way that resorts to diplomacy as opposed to force,” Obama warned Monday.