The International Monetary Fund has announced a $14-18 billion bailout of Ukraine with the aim of luring in a total of $27 billion from the international community over the next two years.
Ukrainian officials say they need money to start flowing in April. The U.S., EU and others in the G7 would row in behind an IMF package, helping Ukraine meet its debt obligations and begin the process of rebuilding. In total, Kiev has talked about needing $35 billion over two years so they are pretty close.
A comprehensive slate of economic, energy and financial reforms have been attached and the Fund appears to be content that whatever hue of government is in charge after May elections will adhere to the programme.
Yesterday, Kiev agreed to whack up domestic price gases by an eye-watering 50 percent, a liberalization of the market and cut in subsidies the IMF has demanded in talks with the previous regime but which it always baulked at.
The EU has also signed the political elements of an “association agreement” with Kiev, promising closer ties that will help draw it more closely into the heart of Europe. That is precisely what Vladimir Putin was trying to avoid so, as always, his reaction will be key.