IMF board to meet next week to review aid package for Ukraine

by Reuters
Thursday, 24 April 2014 19:02 GMT

(Updates with details on Ukraine crisis; adds IMF conditions for aid and further comments from IMF spokesman)

By Elvina Nawaguna

WASHINGTON, April 24 (Reuters) - The International Monetary Fund on Thursday said its board planned to meet on April 30 to consider an aid package for Ukraine, saying that Kiev had supplied the necessary documents to determine whether conditions for a bailout had been met.

The IMF tentatively agreed in late March to provide a $14 billion-$18 billion two-year aid package to help Ukraine recover from months of political and economic turmoil.

"We're in the process of completing the steps necessary for board consideration," IMF spokesman Gerry Rice told reporters during a weekly briefing. "Staff are checking these documents to verify the details, if they're in line with the program understanding."

As part of the conditions for the aid, the IMF expects Ukraine to implement major reforms in its energy and financial sectors, which included raising the price of its domestic gas.

Months of upheaval from anti-government protests and Russia's subsequent annexation of its Crimea region have thrown Ukraine's economy on the brink of bankruptcy.

The former Soviet republic has said its economy will likely contract by 3 percent by the end of this year as a result of all the chaos and mismanagement.

The IMF bailout would help Kiev meet its looming debt obligations and avoid a potential debt default.

Regarding whether Ukraine could use the IMF bailout funds to pay for its outstanding gas debts with Russia, Rice said that the program "provides room for settling gas payment arrears and making all current payments on time."

Rice said the IMF aid to Ukraine is expected to unlock additional international assistance to Ukraine of about $15 billion over the same two year period.

Ukraine has twice previously failed to clinch IMF funds after falling short on some of the conditions.

"The Fund only approves the use of its resources if it is satisfied that the member has the capacity to implement the program and is committed to do so, in this case, we believe that this is the case," Rice said.

The IMF board will make a final decision on the amount of aid to be delivered to Ukraine when it meets. (Reporting by Elvina Nawaguna; Editing by Paul Simao and Diane Craft)

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