KIEV, Ukraine – The world rushed Thursday to help Ukraine, with the International Monetary Fund pledging up to $18 billion in loans, the U.N. condemning the vote that drove Crimea into Russian hands and the U.S. Congress backing even harsher sanctions against Russia.
Yet even with such intensive help to prop up the teetering economy, Ukraine’s prime minister warned of painful times ahead from economic reforms that were sure to drive up energy prices.
In a passionate address to parliament in Kiev, Prime Minister Arseniy Yatsenyuk warned that Ukraine was “on the brink of economic and financial bankruptcy” and laid out the fixes needed to put the country back on track.
“The time has come to tell the truth, to do difficult and unpopular things,” Yatsenyuk said, adding that Ukraine was short $25.8 billion – “equivalent to the entire state budget for this year.”
The IMF loan, which is expected to range between $14 billion and $18 billion, hinges on structural reforms that Ukraine has pledged to undertake.
The reforms demanded by the IMF include raising taxes, freezing the minimum wage and hiking energy prices.
In Washington, Congress overwhelmingly backed legislation in the House and Senate to aid cash-strapped Ukraine and punish Russia for its annexation of Crimea.
Meanwhile, in a sweeping rebuke of Moscow, the U.N. General Assembly overwhelmingly affirmed Ukraine’s territorial integrity and deemed the referendum that led to Russia’s annexation of the Crimean Peninsula illegal. The vote was 100 in favor, 11 opposed and 58 abstentions.