Headlines have alerted us that the IMF has returned to its rescue bail out package for Ukraine, initially delayed due to the outbreak of conflict. Already the fund had delivered $4.5 billion worth of the initial program, and so the funds total commitment will reach a healthy $22 billion.
According to Lagarde they are “demonstrating courage to reform”, this being her justification for reviving the financial aid package. It is critical to note here that alongside this package will come separate EU and US loan pledges, as we try to ensure that economic progress is not politicised in a volatile region.
True a ceasefire has been agreed but this fragile agreement is no assurance that tensions in the region will subside. This fragility is going to come through when the government looks to restructure its debt obligation. It is also clear that the holders of Ukraine’s sovereign debt will not be treated equally, as Russia is one of them.
This seems to have become an endless saga, which the IMF has now decided to contribute to. One may also provide a critique of the IMF in that there is a danger with the present levels of corruption this financial aid package may be mishandled to an equal scale to that of Greece. While also considering a double standard created through the IMF being political in the willingness to provide aid to Ukraine, and yet want to hold Greece on a tight leash with its new government which is looking to break free from the shackles of its creditors.
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