The vital economic breakthrough was reached just as Ukraine's presidential campaign heated up with the announcement by opposition icon Yulia Tymoshenko that she will contest the race to see who will replace the ousted pro-Russian regime that sent her to jail.
Washington and its EU allies hope the rescue and a mounting diplomatic offensive against Russia should keep Ukraine on a stable enough footing to conduct snap polls on May 25 that could help unite the culturally splintered country of 46 million behind one democratically elected leader. But the pledge of Western assistance comes amid growing worries about a rapid Russian buildup at Ukraine's eastern border that one Kiev official said had now reached 100,000 troops.
German Chancellor Angela Merkel said on Friday that she hoped the threat of further sanctions would be enough to keep Russia's expansionist ambitions in check following its annexation of Crimea — an incursion that has left the Kremlin more isolated from the West than at any stage since the 1989 fall of the Berlin Wall.
Kiev's International Monetary Fund-dictated agreement — worth the equivalent of 10.8-13.1 billion euros — imposes tough economic conditions that will alter the lives Ukrainians who have grown accustomed to the comforts of Soviet-era subsidies and welfare benefits. But it also appears to herald a fundamental shift from reliance in Kiev on Russian help to save a crumbling system, to a commitment to the types of free-market efficiencies that could one day bring Ukraine far closer to the West.
The Fund's ‘standby arrangement’ will form the heart of a broader package released by other governments and agencies amounting to $27 billion over the next two years. Western support became essential for Ukraine once Russia froze payments on a $15 billion loan it awarded ousted president Viktor Yanukovych.
US President Barack Obama welcomed the IMF package to Ukraine as ‘a major step forward’ for the country. ‘This significant support will help stabilise the economy and meet the needs of Ukrainian people over the long term because it provides the prospect for true growth,’ Obama said at a joint press conference with Italian Prime Minister Matteo Renzi.
Obama praised interim Ukrainian Prime Minister Arseniy Yatsenyuk for his current efforts and acknowledged that ‘the decision to go forward with an IMF programme with a lot of resources, is going to require a lot of courage’. But he insisted he believed that the Ukrainian people had shown that they were tired with ‘the same corrupt practices, an economy that was completely inefficient’ by ousting former president Viktor Yanukovych.
‘I think that's what the Ukrainian people are seeking, is a better future, even if it requires some short-term changes to business as usual, Obama said.
"It (the IMF package) will require structural reforms. But it means Ukraine can go on a path that countries like Poland have been able to embark on and seen incredible growth over the last several years,’ Obama said, adding it would also help boost democratic reforms.
‘So it's a concrete signal of how the world is united with Ukraine as it makes tough choices at a difficult time. Ukraine's leaders can show considerable courage and foresight making the reforms to grow their economy, leave behind the corruption of the past,’ Obama said.
He also urged the US Congress to pass a $1 billion US package guaranteeing loans to Ukraine, which has run into opposition from Republican lawmakers. Renzi too offered Italy's support even though his own country is still battling to recover from an economic crisis.
Washington and its EU allies hope the rescue and a mounting diplomatic offensive against Russia should keep Ukraine on a stable enough footing to conduct snap polls on May 25 that could help unite the culturally splintered country of 46 million behind one democratically elected leader. But the pledge of Western assistance comes amid growing worries about a rapid Russian buildup at Ukraine's eastern border that one Kiev official said had now reached 100,000 troops.
German Chancellor Angela Merkel said on Friday that she hoped the threat of further sanctions would be enough to keep Russia's expansionist ambitions in check following its annexation of Crimea — an incursion that has left the Kremlin more isolated from the West than at any stage since the 1989 fall of the Berlin Wall.
Kiev's International Monetary Fund-dictated agreement — worth the equivalent of 10.8-13.1 billion euros — imposes tough economic conditions that will alter the lives Ukrainians who have grown accustomed to the comforts of Soviet-era subsidies and welfare benefits. But it also appears to herald a fundamental shift from reliance in Kiev on Russian help to save a crumbling system, to a commitment to the types of free-market efficiencies that could one day bring Ukraine far closer to the West.
The Fund's ‘standby arrangement’ will form the heart of a broader package released by other governments and agencies amounting to $27 billion over the next two years. Western support became essential for Ukraine once Russia froze payments on a $15 billion loan it awarded ousted president Viktor Yanukovych.
US President Barack Obama welcomed the IMF package to Ukraine as ‘a major step forward’ for the country. ‘This significant support will help stabilise the economy and meet the needs of Ukrainian people over the long term because it provides the prospect for true growth,’ Obama said at a joint press conference with Italian Prime Minister Matteo Renzi.
Obama praised interim Ukrainian Prime Minister Arseniy Yatsenyuk for his current efforts and acknowledged that ‘the decision to go forward with an IMF programme with a lot of resources, is going to require a lot of courage’. But he insisted he believed that the Ukrainian people had shown that they were tired with ‘the same corrupt practices, an economy that was completely inefficient’ by ousting former president Viktor Yanukovych.
‘I think that's what the Ukrainian people are seeking, is a better future, even if it requires some short-term changes to business as usual, Obama said.
"It (the IMF package) will require structural reforms. But it means Ukraine can go on a path that countries like Poland have been able to embark on and seen incredible growth over the last several years,’ Obama said, adding it would also help boost democratic reforms.
‘So it's a concrete signal of how the world is united with Ukraine as it makes tough choices at a difficult time. Ukraine's leaders can show considerable courage and foresight making the reforms to grow their economy, leave behind the corruption of the past,’ Obama said.
He also urged the US Congress to pass a $1 billion US package guaranteeing loans to Ukraine, which has run into opposition from Republican lawmakers. Renzi too offered Italy's support even though his own country is still battling to recover from an economic crisis.