The head of the International Monetary Fund, Christine Lagarde, said Tuesday that Ukraine may need more international aid if its crisis with the pro-Russia separatist rebellion is prolonged.
“As it stands and under current circumstances and the set of our assumptions, which includes a conflict that eventually is resolved in a not-too-distant future, no additional financing is needed,” Lagarde said at a news conference at IMF headquarters in Washington.
But “if any of those parameters changes… additional financing might very well be needed” in 12 months, said Lagarde, managing director of the 188-nation institution.
In late April, the IMF approved a $17 billion line of credit to Ukraine, part of a $27 billion international financial lifeline to the country’s economy reeling from the rebellion blamed by the West on neighboring Russia, an accusation Moscow denies.
“If any those key parameters changes, we will have to revisit the whole strategy because we’re talking about a different situation,” Lagarde said.
The first installment of the aid, worth $3.19 billion, was disbursed in early May.
The Ukraine crisis has escalated since the bailout began, with the pro-Russia separatists advancing their control of eastern Ukraine — the industrial engine of the economy — and the downing of a Malaysia Airlines passenger plane over the area in mid-July.
The IMF, which makes loan payouts conditional on a country’s progress in achieving drastic economic reforms, is supposed to disburse its next aid installment to Kiev in late August but must be careful given the recent political crisis in the government, Lagarde said.
“All, of course, has to be supported by the government,” she said.
The Ukrainian parliament is set to hold a special session Thursday to decide whether to accept or reject the sudden resignation last Thursday of the prime minister, Arseniy Yatsenyuk.
“If elections were called during the year we would certainly seek the endorsement by the political leaders,” Lagarde said.