IMF and Ukraine agree over 15 billion in emergency financing
02:00 | The International Monetary Fund (IMF) has reached a preliminary agreement with Ukraine on emergency loans of 15.6 billion dollars for a period of four years. The Eastern European country is fighting a war with Russia, which invaded Ukraine more than a year ago. This has caused great damage to the economy and that is why Ukraine is desperate for financial aid. The IMF executive board has yet to approve the deal.
Earlier this year, the IMF’s special envoy to Ukraine, Gavin Gray, reported that the country had made progress on reforms the organization deemed necessary. For example, Ukraine is working to improve public administration, fight corruption and strengthen the rule of law
“In addition to the terrible humanitarian sacrifices, the Russian invasion of Ukraine has had a devastating effect on the economy,” Gray said announcing the deal. For example, Ukraine’s economy will shrink by 30% in 2022 and more people will be living in poverty since the Russian military invaded the country. Meanwhile, it is becoming increasingly difficult for the Ukrainian government to raise enough funds for the huge spending on fighting the Russians, causing the budget deficit to soar sharply.
The billion dollar aid is expected to help stabilize public finances, reconstruction and economic recovery. In the long run, the money should also contribute to EU membership. The IMF also expects Ukraine’s allies to provide additional financial aid under the new package.
In order to be able to offer Ukraine such a large emergency package, the IMF had to adjust its rules. Previously it was not possible to come to the aid of countries that were facing an extraordinary amount of uncertainty, such as a war with a neighboring country. But earlier this month, the organization adjusted those rules so that emergency loans are possible for countries facing higher risks through no fault of their own.
The United States does not consider Chinese mediation in war to be impartial
00:10 | China is unable to impartially mediate war between Russia and Ukraine, says US. The criticism follows two days of talks between Chinese President Xi Jinping and Russian President Vladimir Putin in Moscow.
Talks in Moscow included a Russian invasion of Ukraine. They failed to produce a breakthrough. Xi then said that China is taking an “impartial position” on the war and that her country is in favor of dialogue. Previously, China presented a peace plan with no concrete steps. Putin said this plan could form the basis for resolving the conflict in Ukraine when Kiev and the West are ready.
According to White House spokesman John Kirby, China absolutely cannot be considered impartial. He stressed that China does not criticize Russia and continues to buy Russian oil. The Russian energy sector is mainly affected by Western sanctions. With this, countries hope that the Kremlin treasury will eventually empty. Kirby also said that China “keeps parroting Russian propaganda.” If China wants to play a constructive role, it can urge Russia to end the war, Kirby said.
Xi and Putin hailed “a new era” in Russia-China relations in Moscow. According to Kirby, leaders are not bound by an alliance, but by a “marriage of convenience.” The spokesman said that despite China’s position, the Americans want to maintain communication channels with the Asian country.