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Leonid Bershidsky

Fund Ukraine Only After It Reforms

The Ukrainian government has drafted a reasonable austerity plan, but it may just be a ploy to get more international funding.
The prime minister stands for austerity.

The prime minister stands for austerity.

Photographer: Sergei Supinsky/AFP/Getty Images

Ukraine urgently needs a new IMF bailout, and that may finally force the country to make drastic and unpopular economic changes. The government already has a new action plan that contains a number of effective steps. For now, Ukraine's Western sympathizers might do well to withhold financing to make the government move faster on the reforms.

According to a report in the Financial Times, which the Ukrainian government has not denied, the International Monetary Fund has identified a $15 billion shortfall in Ukraine's funding that the country needs to eliminate within weeks to avoid a financial meltdown. Ukraine's international reserves are enough to cover only six weeks of imports; even twice that much would be barely adequate. The $17 billion rescue package already agreed with the IMF -- before conflict erupted in Ukraine's eastern regions -- will no longer suffice.