Secretary of State John Kerry offered of $1 billion in American loan guarantees and pledges of technical assistance to the Ukraine’s new government, a senior State Department official said on Tuesday. http://www.nytimes.com/2014/03/05/world/europe/secretary-of-state-john-kerry-arriving-in-kiev-offers-1-billion-in-loan-guarantees-to-ukraine.html?ref=world&_r=0
The purpose of the loan guarantee is to support Ukraine’s efforts to integrate with the West.
The United States will also send technical experts to help Ukraine’s national bank and finance ministry, provide advice on how to fight corruption and train election monitors to help establish the legitimacy of Ukraine’s coming election.
American officials are offering assistance in recovering “stolen assets,” an allusion to the billions of dollars that are alleged to have been spirited out of the country by former President Viktor F. Yanukovych and powerful businessmen.
The United States will also provide technical advice so that Ukraine might lodge complaints with the World Trade Organization should Russia try to use trade as a political weapon.
Economic sanctions to punish Russia for its military intervention in Crimea, the senior official said, are likely to be imposed within days.
“I think there will be movement on sanctions very likely later in this week,” said the State Department official, who could not be identified under the agency’s protocol for briefing reporters on Mr. Kerry’s trip. “There’s a whole spectrum of sanctions.”
Mr. Kerry’s visit here, his first as secretary of state, is both a symbolic and tangible illustration of American support as the White House has tried to line up European backing to counteract Russian pressure on the new Ukrainian authorities.
Mr. Kerry plans to meet with the acting prime minister, Arseniy P. Yatsenyuk, and the acting president, Oleksandr V. Turchynov, as well as leaders of the Rada, or Ukrainian parliament.
And Mr. Kerry will pay homage to the protest movement by visiting the Shrine to the Fallen, a memorial to protesters who died in the tumultuous events on Feb. 20 that ultimately led to the ouster of Mr. Yanukovych.
The Obama administration has been pursuing a two-track strategy of ratcheting up the economic pressure on Moscow even as it has offered Russia a so-called off-ramp by suggesting that international monitors might be sent to Ukraine to ensure that the rights of the Russian-speaking population are protected while Russian troops returned to their barracks.
There are no signs that the moves by the United States and its partners have prompted a rethinking by Moscow.
The State Department official said that Russia was continuing with the “solidification” of its control over Crimea and that there was a “continued inflow of Russian troops” there. The Russian force in Ukraine has grown to 16,000, according to Ukrainian officials. And the senior American officials said there were reports that Russian helicopters had approached Ukrainian airspace, prompting Ukrainian jets to scramble to intercept them.
A key element of the American plan to reverse the Russian intervention — sending international monitors — seems to have no particular appeal for the Kremlin.
The Organization for Security and Cooperation in Europe is sending an initial group of 10 monitors to Ukraine. The United States and other Western nations would like to see the number of monitors increased so that the monitors could not only visit eastern Ukraine but also eventually Crimea while Russian troops returned to their barracks. But Russia has not supported such a move.
The American-backed loan guarantee, which is intended to help Ukraine defray the increased costs attributed to a reduction of energy subsidies from Russia, is contingent on backing from Congress in the United States, but there has been growing support among lawmakers for firm action.
“We are going to work with Congress on providing a $1 billion loan guarantee aimed at helping insulate Ukraine from the effects of reduced energy subsidies based on what transpired in Russia,” the State Department official said.
Russia could try to counter such economic efforts by raising gas prices to Ukraine further. If that happened, the United States might be funneling aid to Ukraine that would end up in Russian coffers.
“The Russians are major holders of Ukrainian debt,” the senior American official acknowledged. “So in any scenario in which Ukraine is getting financial assistance, some of the money very likely is going to end up in the hands of Russian institutions. I think there is probably no way of avoiding that.”
US Treasury Secretary Jack Lew made it clear on Sunday that Ukraine should begin discussions with the IMF as soon as a transitional government is in place in Kiev. Under IMF rules, the institution can only lend to elected governments although it can begin negotiations before then. http://www.scmp.com/news/world/article/1434755/us-offers-funding-ukraine-alongside-imf-rescue-programme
Ukraine’s finance ministry said it needed US$35 billion in foreign assistance over the next two years and called for a donor conference to raise money. French Foreign Minister Laurent Fabius said a donor conference was under consideration and “this should be worked out in the coming days”.