Ukraine faces a bleak future, beyond its terrible present in the war against the Russian invader. Even if the war ends tomorrow, the country will face years of low incomes and large bills to pay. And a buildup of credits from now on would worsen that outlook. Hence, the director general of the International Monetary Fund, Kristalina Georgieva, yesterday asked the members of the club to help Ukraine with subsidies and not with loans that would make it “accumulate more debt on top of what it already has.” This is what Georgieva said at the press conference that she offered together with the Spanish Vice President Nadia Calviño, who is participating in the spring meeting of the entity, in Washington, as president of the Financial and Monetary Committee (IMFC).
Before proposing that support for Ukraine come in the form of donations and not credits “as far as possible”, Georgieva had indicated that officials of the Ukrainian Ministry of Finance calculate the needs of international financial assistance for the country in about 5,000 million dollars per month for the next few months. And this just to “help cover essential government services and keep the country’s economy going.” It should be borne in mind that Ukraine is facing this year, according to the IMF’s own estimates, a contraction of 35% of its GDP.
In this regard, and at the same time that President Joe Biden announced direct aid of 500 million dollars to the Ukrainian Government, the US Treasury Secretary, Janet Yellen, said that the economic assistance that her country and its allies have already sent to Kyiv “ it is only the beginning of what Ukraine will need for its reconstruction.” She added that, fortunately, Western partners remain united in the search for formulas to meet the needs of that nation.
Moscow’s obvious refusal to condemn the invasion prevents closing the meeting with a consensual agreement
One of the aspects of the aid is that which must come from Russia as the cause of the damage that will have to be repaired “at an enormous cost”, Yellen pointed out. And, on the steps that will have to be taken for Moscow to participate in said reparation, he stressed the need to be “careful” when considering “any movement to deploy confiscated Russian assets” and allocate them for that purpose. Yellen was obviously referring to the funds, accounts and assets blocked under the sanctions agreed between the United States, the European Union and the G-7.
Russia’s obvious refusal to condemn the invasion of Ukraine prevented the Fund’s Monetary and Financial Committee from agreeing on a joint statement mentioning the war. Instead, the body published a note signed by Nadia Calviño citing the resolution by which the United Nations condemned the Russian aggression on March 2. Calviño recalled that the IMFC has always approved its resolutions by consensus. So, if one of the 24 member countries distances itself from the majority, it is unfeasible to reach the “desired agreement”.
The US Treasury Secretary also alluded to the boycott that she herself and the Western allies present at the G-20, as well as the representative of Ukraine as a guest, staged on Wednesday to isolate the Russian Finance Minister , Anton Siluanov. Yellen said that despite such a gesture, in which many walked out of the day’s meeting as soon as Siluanov began to intervene, she is committed to working with the G-20 to address the problems caused by the Russian invasion of Ukraine.
Yellen alludes to the “careful” use of funds confiscated from Russia in the reconstruction of Ukraine
“I think – with the boycott – we were looking for a way to make our disapproval known while acknowledging that we have a lot of work to do,” Yellen said. And he added that the aggression orchestrated by Vladimir Putin “violates international norms so much” that Washington and its partners “will not allow Russia to participate in international institutions.”
Putin must feel “an international pariah”, as Biden baptized him a month ago.
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