-Christine Lagarde, IMF Managing Director
The recent economic reports from Europe confirmed that economies are hit by Ukrainian crisis and sanctions imposed by Russia. The strongest pain was felt in German economy, as inflation and a bunch of economic reports including consumer and business sentiments disappointed markets. Therefore, all sides are interested in the regulation of tensions in Ukraine and economic stability.
On Thursday the International Monetary Fund approved a $17.1 billion bailout for Ukraine in order to support the beleaguered economy. The money is going to be released over the next two years, with the first tranche of $3.2 billion already being available. Christine Lagarde has already pledged to ensure the Ukrainian government will follow through on its commitments. A month earlier, politicians have already increased gas prices by 50% in order to secure the bailout. At the same time, the government has agreed to freeze the minimum wage. The bailout, however, still needs to be approved by the 24-member board, which includes Russian representative as well. After freezing loans to Ukraine twice since 2008, the IMF is now committed to tackle unpopular measures like the phasing out of natural-gas subsidies.
Additionally, the IMF warned that Russia will be dragged deeper into recession because of damage caused by the Ukraine crisis.
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