Lew Says Ukraine’s Leaders Ready to Tackle ‘Market Reforms’

Ukraine is ready to undertake “urgently needed market reforms” to help restore financial stability and strengthen its economy, U.S. Treasury Secretary Jacob J. Lew said today after several conversations with Ukrainian Prime Minister Arseniy Yatsenyuk.

The U.S. is “prepared to work with its bilateral and multilateral partners to provide as much support as Ukraine needs to restore financial stability and return to economic growth, if the new government implements the necessary reforms,” Lew said in a speech today in Washington.

Ukraine mobilized its army reserves and called for foreign observers in Crimea after Russia sparked international outcry by seizing control of the Black Sea region. Lew said the U.S. is watching the situation with “grave concern.”

“I have spoken several times to the Ukrainian prime minister, who assures me that the government is prepared to take the necessary steps to build a secure economic foundation, including urgently needed market reforms that will restore financial stability, unleash economic potential, and allow Ukraine’s people to better achieve their economic aspirations,” Lew said.

The Treasury secretary made the remarks at the 2014 Policy Conference of the American Israel Public Affairs Committee.

Crimea Conflict

Hundreds of unidentified gunmen arrived outside a Crimean army base today even after Ukraine put its military on full combat alert and invited European Union and NATO observers to the country.

Russian President Vladimir Putin yesterday got lawmakers to rubber-stamp troop deployments, a move that prompted U.S. President Barack Obama to protest his “clear violation” of Ukraine’s sovereignty in a 90-minute call. The U.S. warned today of possible sanctions against Russia.

U.S. Secretary of State John Kerry, who plans to travel to Kiev this week, has said the administration is talking with lawmakers about providing Ukraine with a $1 billion loan guarantee.

An International Monetary Fund program “should be the centerpiece of the international assistance package, and the United States is prepared to supplement IMF support in order to make successful reform implementation more likely and to cushion the impact of needed reforms on vulnerable Ukrainians,” Lew said today.

IMF’s Involvement

IMF spokesman Gerry Rice last week said Ukraine’s new leadership is pledging “wide-ranging reforms” in exchange for financial assistance, citing the country’s formal request for aid on Feb. 27. IMF Managing Director Christine Lagarde, in a statement the same day, said the fund will send a “fact-finding” team to Kiev soon for preliminary talks with government officials.

“This will enable the IMF to make its usual technical, independent assessment of the economic situation in Ukraine and, at the same time, begin to discuss with the authorities the policy reforms that could form the basis of a fund-supported program,” she said.

Twice since 2008, the IMF froze loans to the former Soviet republic after policy makers from previous governments reneged on measures they had agreed to.

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