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Europe, US offer financial arm to Ukraine

Published: Feb 24, 2014 - 1:09 PM GMT

Finance leaders from the US and Europe began pushing for financial assistance for Ukraine after its parliament voted out the now fugitive President Viktor Yanukovych, while Russia threatened to pull out the second part of a $15-billion support package.

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by Katie Perkowski
WBP Online correspondent in London

Kiev/London/Washington - European and US leaders began swooping on Monday to pass a financial aid package for Ukraine after its parliament, pressured by opposition forces, ousted President Viktor Yanukovych, spurring the potential withdrawal of economic support from Russia.

Yanukovych was voted out of leadership after the months-long protests that began in November 2013 when he turned away from an agreement with the European Union in favor of closer ties with Russia. Almost 100 people were killed last week in clashes between protesters and government-backed forces. Videos of police shooting at protesters with sniper rifles flooded social media.

Ukraine needs $35 billion in financial aid to avoid a default, the interim government said on Monday.

US Treasury Secretary Jacob Lew urged Ukrainian officials to begin discussions with the Washington-based International Monetary Fund (IMF) immediately and said the US was ready to supplement IMF aid, according to Reuters.

British Chancellor of the Exchequer George Osborne, meanwhile, also said on Monday that his country was willing to support an aid package for Ukraine through the IMF.

European Commissioner for Monetary and Economic Affairs, Olli Rehn, furthermore, said any bailout package for the former Soviet state would have to be measured in billions of euros.

The push for financial aid to Ukraine comes a day after Russia warned Ukraine that, because of the political uncertainty after the protests, it would freeze a $2-billion purchase of Ukraine's euro bonds. The $2 billion was meant to be the second round of a $15 billion loan deal that Ukraine and Russia agreed to in December, but was seen as a foreign policy takeover by Russian leaders.

Also adding pressure for a bailout package to Ukraine, on Friday, ratings agency Standard & Poor's warned that Ukraine would default on its foreign-currency obligations if Moscow delayed its loans.

Oleksandr Turchynov, Ukraine's interim president until the May 25 elections, said the new leadership's goal would be to move closer to Europe. He added that Moscow has to respect the country's choice.

To contact the author of this story, e-mail katherine.perkowski@wbponline.com.

Photo: ISIFA

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