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Kerry Says U.S. Plans $1 Billion Ukraine Loan Guarantee

A man stands with a Ukrainian flag in Kiev's Independence Square on February 26, 2014. Photographer: Bulent Kilic/AFP via Getty Images
A man stands with a Ukrainian flag in Kiev's Independence Square on February 26, 2014. Photographer: Bulent Kilic/AFP via Getty Images

Feb. 26 (Bloomberg) -- Secretary of State John Kerry said the U.S. is formulating a $1 billion loan guarantee for Ukraine and is working with the International Monetary Fund and other international organizations that would provide the money.

Kerry, speaking to reporters today at a roundtable in Washington, said the Obama administration is also considering additional direct assistance to Ukraine.

“I don’t think it’s enough to be heralding the advent of democracy and not doing anything,” Kerry said. There is strong congressional support for providing aid to Ukraine, he said.

Ukraine’s interim government is seeking as much as $35 billion in financial aid to avoid a default after Viktor Yanukovych was ousted from the presidency last week amid deadly protests. The U.S. guarantee may speed initial aid because past IMF aid proposals for Ukraine led to protracted negotiations, as the country’s leaders balked at austerity measures demanded by the lender.

Kerry said it was important to move quickly. “We don’t know yet the full financial dilemma facing them, although we know it’s pretty dire,” he said.

The top U.S. diplomat warned against any Russian intervention in Ukraine, after Russian President Vladimir Putin ordered military exercises in the western part of his country that were described as a test of battle readiness.

“For a country that has spoken out so frequently in the last year that I’ve been secretary of state and so strongly against foreign intervention in Libya, Syria and elsewhere, it would be important for them to heed those warnings as they think about options in the sovereign nation of Ukraine,” Kerry said.

“I don’t think there should be any doubt whatsoever that any kind of military intervention that would violate the sovereign territorial integrity of Ukraine would be a grave mistake,” Kerry said.

To contact the reporter on this story: Nicole Gaouette in Washington at ngaouette@bloomberg.net

To contact the editor responsible for this story: John Walcott at jwalcott9@bloomberg.net

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