IMF Urges Ukraine to Honor Emergency Funding Obligations

NASDAQ ^ | 7-25-2014 | Ian Talley

[tcrlaf]

The International Monetary Fund has urged Ukraine's fragile government to honor its bailout obligations, a sign the fund is concerned a breakdown in the country's coalition could jeopardize its emergency financing package.

Ukraine's ruling coalition broke up on Thursday, with Prime Minister Arseniy Yansunyuk submitting his resignation, jeopardizing passage of a supplementary budget that may be needed for the IMF's executive board to approve the next tranche of financing in late August.

The fund said IMF Managing Director Christine Lagarde discussed the implications of the political developments with President Petro Poroshenko and Mr. Yatsenyuk by telephone on Friday.

(SNIP) The staff-level consent for a $1.4 billion tranche still requires approval by the IMF's executive board, even though that is seen as largely a formality, as the bailout helps the U.S. and Europe keep the new pro-Western government in power.

But if the Kiev fails to meet the basic conditions of the bailout--a raft of policy changes, budget belt-tightening and other measures to stabilize the economy--it would be difficult for the IMF board to justify continued support for the financing. "The program hinges crucially on the assumption that the conflict will begin to subside in the coming months," the IMF said earlier this month.

[tcrlaf]

The financial backers of the IMF loans to Ukraine seem worried that:

1) They aren't implanting the required austerity measures, and

2) The fighting is dragging on, and become bigger than they likely expected.

[Rashputin]

" . . .as the bailout helps the U.S. and Europe keep the new pro-Western government in power."

And there you have it, who is keeping the Kiev Coup Kiddies in power and it's not the people of Ukraine.

[McGruff]

I heard Russia was going to repossess Ukraine for failure to pay their Natural Gas bill.

[tcrlaf]

“I heard Russia was going to repossess Ukraine for failure to pay their Natural Gas bill.”

It is going to get COLD in Ukraine soon, but you can bet that the oligarchs and Gov Officials will still say warm, just like how their kids are exempt from conscription.