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IMF Chief Lagarde Warns Ukraine over Rescue Program

An IMF program to prop up cash-strapped Ukraine's stricken economy cannot continue without reform by the authorities in Kiev, International Monetary Fund chief Christine Lagarde warned Wednesday.

"Without a substantial new effort to invigorate governance reforms and fight corruption, it is hard to see how the IMF-supported program can continue and be successful," Lagarde, the Washington-based lender's managing director, said in a strongly worded statement.

The IMF is the main source of rescue financing for Ukraine as the hard-up country battles with crises ranging from falling commodity prices to a new trade embargo by Russia.

The Fund has a $17.5 billion rescue program for Ukraine on condition the government enacts economic reforms and fights corruption.

"I am concerned about Ukraine’s slow progress in improving governance and fighting corruption, and reducing the influence of vested interests in policymaking," said Lagarde.

"Ukraine risks a return to the pattern of failed economic policies that has plagued its recent history," she added.

"It is vital that Ukraine's leadership acts now to put the country back on a promising path of reform."

It is the second time in a matter of days that Lagarde has voiced concern about the portents for the bailout program.

Last week she said that the abrupt resignation of Ukraine's reformist economy minister, Aivaras Abromavicius, who cited government corruption, was a troubling sign.

Abromavicius quit in protest at alleged influence-peddling and state graft.

Western frustration has been fanned by the fact that Abromavicius was the fourth reform-minded minister to tender his resignation since Ukraine's 2014 revolution broke its ties with Russia and set it on a European course.

The resignation sparked alarm among Ukraine's Western allies and prompted President Petro Poroshenko to hold a meeting with ambassadors from the G7 countries in a bid to allay their concerns.

Source: Agence France Presse


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