US open to more money for Ukraine

“There is the prospect for additional financing from the United States and from other sources as well,” a senior US Treasury official told the Financial Times. “For Ukraine to be successful in this environment it will require support from the United States, from Europe, from other bilateral and multilateral sources.”

The US has so far provided two $1 billion loan guarantees this year, now hinting it would consider a third as part a broader package of financing from Europe and other sources, as Ukraine insisted it needs additional help in the background of battling the Russian proxies in Donbas, the Financial Times reports.

Jack Lew, US Treasury secretary, and his deputies have harbored great interest in Ukraine’s current government over the past year, including the country’s Finance Minister Natalie Jaresko, a Chicago resident until recently. Over 30 calls and meetings between the two sides were recorded in the said period.

Ukraine “is definitely in the highest priority bin”, said Nathan Sheets, who as undersecretary for international affairs is Mr Lew’s chief deputy on matters outside the US, The Financial Times reports.

“When you come back from a negotiation it’s always easy to say oh, you could have got more. But my sense is that a deal is very much in the best interests of Ukraine and at the same time is fair to Ukraine’s creditors,” Mr Sheets said.

However, the government is facing opposition from parliament ahead of the vote on a debt restructuring deal, as some insiders claim the Cabinet may have to offer boosts to pensions and public sector wages to negotiate a smooth vote, which is likely to be unpopular at the IMF.

Robert Kahn, a senior fellow at the Council on Foreign Relations in Washington, said the Ukrainian economy still faced enormous challenges, suggesting that the global community would soon have to provide more assistance.

One more $1bn loan guarantee from the US “would be constructive”, he said. “But it is not enough,” The Financial Times reports.