The International Monetary Fund yesterday evening approved another massive payment to Ukraine, Bloomberg News reports:
The International Monetary Fund approved a $17.5 billion loan program for Ukraine, including an immediate $5 billion disbursement, to help the former Soviet republic stave off default amid a conflict with pro-Russia rebels. […]The financing offers a lifeline to an economy that the government expects to shrink as much as 11.9 percent this year, as the conflict in the eastern part of the country hobbles its industrial capacity. The program, which replaces a two-year loan from last April, also marks a deepening of the IMF’s involvement in the worst standoff in Europe since the end of the Cold War.
$17.5 billion is a good amount of money, but alone it’s not enough to fill the yawing chasm that is Ukraine’s economy today—George Soros has estimated that something on the order of $50 billion would be required, and that was in January, before Ukraine’s more recent financial travails. Nice gestures, like Sweden’s extension of a $100 million loan and $26 million in annual aid, are rounding errors in this calculus.Ukraine is living paycheck to paycheck, settling its gas bill by the day and week, and is still engaged in a low-level shooting war that threatens to flare up again at any moment. This is still nothing but a stopgap measure—though one that hopefully buys Ukraine enough time to start getting its own affairs in order. The challenges facing the reformers in Kyiv are daunting to say the least, but if any time is wasted in confronting them, Ukraine may soon be well beyond repair.