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March 27,2014
Around the world, support for Ukraine’s battered economy is gaining ground. On Thursday, the International Monetary Fund agreed to a two-year bailout worth up to $18 billion, with additional loan guarantees from member countries worth another $9 billion. And, in the U.S., both houses of Congress displayed a rare moment of unity - reprimanding Russia for its aggressive takeover of Crimea and approving additional financial aid for the former Soviet Republic.
With an economy forecast to shrink by 3 percent, and immediate debt payments equivalent to a third of its domestic output, Ukraine is a country in desperate need of a lifeline. In a passionate address to parliament, Ukrainian Prime Minister Arseniy Yatsenyuk did not mince words.
“The country is on the brink of economic and financial bankruptcy," said Yatsenyuk.
In a bid to stabilize Ukraine’s economy, IMF mission chief Nickolay Gueorguiev says the world lending body has agreed to provide up to $18 billion in emergency aid, not counting the additional loan guarantees.
“This financial support amounts to $27 billion over the next two years," said Gueorguiev.
But European Union Commissioner Olli Rehn says the bailout is conditional on Ukraine agreeing to tough austerity measures.
“This financial assistance will help in stabilizing the worsening financial situation in Ukraine and therefore will be one vital part of achieving a peaceful and negotiated solution to the crisis," said Rehn.
While most in Kyiv welcomed the support from the international community, some worry about how the money will be spent.
“They are offering us false hope because this is a loan, and loans need to be paid back. If this money gets stolen and taxpayers need to repay the loan - that would be unfair," said a Ukrainian woman.
U.S. lawmakers have also stepped up efforts to assist the former Soviet republic. On Thursday, both houses of Congress approved legislation guaranteeing up to a billion dollars in loans. Senate leader Harry Reid says that includes an additional $100 million in direct aid.
"What we are doing here today is just the beginning. I support this legislation. I am proud of my Senate colleagues who join me in standing up for the people of Ukraine," said Reid.
Despite the rare bipartisan agreement, Republican Senator Lindsey Graham says more needs to be done.
“Should the United States and our NATO partners at the request of the Ukrainian people supply them with defensive weapons to rebuild a military gutted by pro-Russian elements? To me the answer is yes, because if you want to make Putin think twice about what he does next, he has got to pay a price greater than he has for Crimea," said Graham.
The U.S. is considering additional measures to further isolate Russia, but some worry new sanctions could hurt the U.S. and European economies.
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