Ukraine to Get Third Billion-Dollar Loan Guarantee From U.S.

Ukraine to Get Third Billion-Dollar Loan Guarantee From U.S.

The FINANCIAL -- Ukraine will receive a third billion-dollar loan guarantee from the U.S. in the coming months as it continues to stick to a tough reform agenda, U.S. Treasury Secretary Jack Lew said in a visit to Kiev on November 13, according to Nasdaq.

Mr. Lew praised economic and fiscal reforms undertaken by the new government in Kiev, but said more work still had to be done.

"The progress made in the past two years is very real, it has lent credibility to the effort that makes the case for support very strong," he told journalists in his second visit to the country this year. "But it's important that progress continues to be made, and it's important that the possibility of going in the other direction be strongly resisted."

The U.S. has provided $2 billion in loan guarantees to Ukraine this year, and in September Mr. Lew said the program might be expanded by another billion, pending tough reform action by Ukraine.

Ukraine has largely stuck to the terms of a $40 billion bailout package from the International Monetary Fund, implementing controversial increases in energy tariffs and macroeconomic reforms. But those and other efforts have been undermined by persistent claims of corruption and by an increasingly volatile parliament, where parties have made political gains by opposing aspects of the reform agenda.

The IMF, which arrived in Ukraine this week for further negotiations, delayed issuing a third tranche of bailout cash last month, saying that Kiev needed more time to flesh out policy particularly in the area of fiscal reform.

Mr. Lew also discussed a $3 billion loan that Ukraine is due to pay Russia in December, saying the U.S. has "strongly urged Russia to participate along with other bondholders" in a restructuring deal between Kiev and its international private creditors.

Prime Minister Arseniy Yatsenyuk repeated Ukraine's claims that Russia wouldn't get preferential treatment.

"If Russia doesn't agree, the government will implement a moratorium on the debt," he said.

 

Author: The FINANCIAL