U.S. to offer $1 billion in loan guarantees to Ukraine, officials say
March 4th, 2014
09:49 AM ET

U.S. to offer $1 billion in loan guarantees to Ukraine, officials say

The United States will provide Ukraine $1 billion in loan guarantees to help insulate the Ukrainian economy from the effects of reduced energy subsidies from Russia, senior Obama administration officials said.

The loan guarantees will help Ukraine move forward with an assistance package from the International Monetary Fund, which is calling for the country to raise energy prices.

U.S. Secretary of State John Kerry, who landed Tuesday in Kiev to show American support for the fledgling Ukrainian government, will announce this diplomatic move and others in Ukraine.

The officials, who are traveling with Kerry, said the administration would also be sending Treasury Department technical advisers to help Ukraine's national bank and finance ministry deal with economic challenges and implement energy-sector reforms.

The United States will also train observers for the May 25 elections and is sending a team of experts to help identify stolen assets and support anti-corruption measures.

With Ukraine looking to reduce dependency on Russian energy, the United States will provide assistance and financing to help Ukrainian businesses find new exports markets and will offer technical advice to the government on Ukraine's World Trade Organization rights with respect to Russia.

The assistance package comes as the United States considers economic sanctions against Russia, which one of the officials said could come within "days, not weeks."

This official spoke of a "solidification of Russian control of Crimea" and also referred to unconfirmed reports that Russian helicopters attempted incursions into Ukrainian airspace before Ukrainian planes chased them away.

In addition, the official discussed unconfirmed reports of forces massed on the isthmus separating Crimea from mainland Ukraine, sparking concern Russia wants to extend its forces to the Ukrainian mainland.

"We still have a very real concern that the Russians have other plans in Ukraine," a second official said.

The officials emphasized the importance of de-escalating tension in the region and pointed to a diplomatic way out for Russia to address its concerns in Crimea through international monitors. The Organization for Security and Cooperation in Europe, a regional security bloc, sent in 10 monitors Monday, but the officials encouraged Russia to agree to a much larger observer mission.

Russia should also engage in a dialogue with Ukraine, the officials said. The United States hopes to convene a meeting of signatory countries of the 1994 Budapest Memorandum, a pact of security assurances signed by the U.S., United Kingdom, Ukraine and Russia - as early as this week to begin that dialogue, but the officials said such a meeting was not yet scheduled.

"There is a way out for Russia," the first official said. "If Russia does not chose that off ramp, then the message from the administration is we are ready then to put in place more robust measures."

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