US President Barack Obama today welcomed the IMF's promise to Ukraine of a bailout package worth up to USD18 billion as "a major step forward" for the country.
"This significant support will help stabilise the economy and meet the needs of Ukrainian people over the long term because it provides the prospect for true growth," Obama said at a joint press conference with Italian Prime Minister Matteo Renzi.
The International Monetary Fund agreement in principle -- worth the equivalent of 10.8-13.1 billion euros -- poses tough economic conditions that will alter the lives of Ukrainians who have grown accustomed to the comforts of Soviet-era subsidies and social welfare benefits.
But it also appears to herald a fundamental shift in Kiev away from a reliance on Russian help to save a crumbling system and to a commitment to the types of free-market efficiencies that could one day bring Ukraine far closer to the West.
Obama praised interim Ukrainian Prime Minister Arseniy Yatsenyuk for his current efforts and acknowledged that "the decision to go forward with an IMF programme with a lot of resources, is going to require a lot of courage."
But he insisted he believed that the Ukrainian people had shown that they were tired with "the same corrupt practices, an economy that was completely inefficient" by ousting former president Viktor Yanukovych.
"I think that's what the Ukrainian people are seeking, is a better future, even if it requires some short-term changes to business as usual," Obama said.
The IMF agreement in principle could unlock a broader package from other governments and agencies amounting to USD 27 billion over the next two years.
"It will require structural reforms, but it means Ukraine can go on a path that countries like Poland have been able to embark on and seen incredible growth over the last several years," Obama said, adding it would also help boost democratic reforms.
"So it's a concrete signal of how the world is united with Ukraine as it makes tough choices at a difficult time. Ukraine's leaders can show considerable courage and foresight making the reforms to grow their economy, leave behind the corruption of the past," Obama said.
He also urged the US Congress to pass a USD 1 billion US package guaranteeing loans to Ukraine, which has run into opposition from Republican lawmakers.
Renzi too offered Italy's support even though his own country is still battling to recover from an economic crisis.
