Lew Reiterates U.S. Ready to Make Russia Pay for Ukraine Actions

Treasury Secretary Jacob J. Lew reiterated that the U.S. is prepared to make Russia pay for its “provocative” actions and said an International Monetary Fund aid plan is the only way to revive Ukraine’s economy.

“Working closely with our partners in the international community, we are prepared to impose still greater costs on Russia if the Russian leadership continues its illegal intervention and provocative actions in Ukraine,” Lew said in prepared testimony today to the House Financial Services Committee.

The Treasury Department has blocked access to U.S. markets for 45 individuals and 19 entities, including OAO Rosneft Chief Executive Officer Igor Sechin. Lew spoke yesterday by phone with U.K. Chancellor of the Exchequer George Osborne and discussed “the range of tools available, including sanctions that target companies in certain important sectors of the Russian economy,” the department said in a statement late yesterday.

In his testimony, Lew said the $17 billion package the IMF approved last week “represents the only viable way to offer Ukraine a path forward to a stable market-led economic future, rather than depending on Russia.”

The U.S. Congress has so far refused to approve implementation of a 2010 pact by all IMF member countries that would increase emerging-markets’ shares, or quotas, in the fund and boost its permanent lending capacity.

The delay “is undermining our international credibility and threatening to undermine our influence,” Lew said. Other countries including some American allies are questioning the U.S. “commitment to the multilateral institutions that we worked to create and that advance important U.S. interests around the world,” he said.

Russian President Vladimir Putin yesterday shifted his tone on Ukraine, calling on separatists to postpone an autonomy vote and saying Russian forces had withdrawn from the country’s border, though the U.S. said it saw no evidence of a pullback.

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