WASHINGTON — The IMF has handed Ukraine a US$17.5 billion lifeline as the United States agreed to send military aid to bolster its forces against separatists – but stopped short of promising weapons.
The United States also expanded the reach of its economic sanctions, targeting a Russian bank and separatist officials in eastern Ukraine – a move Moscow branded a "political provocation" that would only worsen the crisis.
Ukrainian President Petro Poroshenko on Wednesday welcomed the increased US support in the face of what he called the separatists' "barbaric aggression", despite Washington snubbing growing calls for arms and ammunition.
After a call with US Vice President Joe Biden and a meeting in Kiev with sympathetic US congressmen, Poroshenko thanked the United States for the offer to send military equipment – but not weapons – worth $75 million.
White House spokesman Josh Earnest said President Barack Obama was concerned that sending more weapons to an already unstable region would lead to greater bloodshed.
"The president is mindful of the fact that there is not a military solution to this problem," he said.
"It is unreasonable to suggest that the United States would be able to provide enough military support to the Ukrainian military that they could overwhelm the military operations that are currently being backed by Russia." US officials said the package would include 230 Humvee vehicles, unarmed Raven drones, counter-mortar radars, night vision devices and various medical and communications gear.
Meanwhile, new US sanctions targeted officials in the separatist self-proclaimed Donetsk People's Republic in Ukraine, as well as a Russian bank and a nationalist group.
The Russian National Commercial Bank has become the largest bank in Crimea since Russia seized the region from Ukraine last year.
Also listed was the Eurasian Youth Union, a nationalist Russian group said to recruit fighters to join the separatists.
Three officials of the government of former Ukraine president Viktor Yanukovych, who was overthrown in an uprising in February 2014, were also added to US sanctions lists.
The sanctions freeze any assets the individuals and institutions hold on US territory and ban Americans from doing business with them.
Russia's deputy foreign minister Sergei Ryabkov said that Washington's allegations that Moscow is backing the separatist movement were "dreary and pointless", as he slammed the new sanctions.
"It's difficult to understand what is guiding the US Treasury Department and other authorities in introducing sanctions and expanding the sanctions lists," he told the Interfax news agency.
"We see no logical link that would in some way explain such decisions, given Washington's declaration that it is interested in the situation returning to normal."
The Washington-based International Monetary Fund, meanwhile, gave Kiev breathing room to rebuild its shattered finances, reeling from the fighting in its industrial heartland.
The four-year, $17.5 billion aid plan replaces an existing IMF programme, less than a year old, that proved inadequate to stabilise Ukraine's finances.
Five billion dollars will be disbursed immediately and a total of 10 billion in the first year. The "heavily front-loaded" programme will support "deep and wide-ranging policy reforms", IMF managing director Christine Lagarde said. — AFP