Canada has opened its pocketbook to Ukraine in the form of a conditional loan it hopes will help restore economic stability in the recession-hit nation, as the former Soviet state struggles toward what Ottawa called its “Euro-Atlantic future” and confronts Russian military intervention.
Foreign Affairs Minister John Baird on Thursday announced, on behalf of Prime Minister Stephen Harper, a $220-million loan to Ukraine, joining the EU and the U.S., which have ready promised $15-billion and $1-billion respectively in loans, subsidies or grants.
Mr. Baird said $200-million will be conditional on a broader package that includes International Monetary Fund support for Ukraine.
“Additional support of $20-million will also ensure that the government of Ukraine gets the expert guidance it needs to manage this important economic transition,” he said, noting he took part in a teleconference Thursday morning, chaired by U.S Secretary of State John Kerry, with a number of like-minded countries. “Any financial support provided by Canada will and must include the necessary safeguards to ensure accountability and transparency around the use of these funds.”
Ukraine will be able to draw on the $20-million chunk, which will be provided through the IMF, for support related to monetary policy, public expenditure management, debt management and anti-money laundering reforms. Ottawa will also provide an additional $900,000, also through the IMF, to help strengthen the National Bank of Ukraine as it tackles banking and financial sector reforms – part of an effort improve the climate for small and medium-sized businesses there.
Mr. Baird defended Canada’s timing on the loan announcement, on the heels of similar and bigger announcements by the U.S. and EU, saying the IMF only recently wrapped up its fact-finding mission in Kiev, where a popular uprising toppled Viktor Yanukovych’s government. He also reiterated Canada’s warning to Moscow that it will not recognize Sunday’s referendum on the Crimea region, which Russia has already seized militarily.
The announcement comes amid mixed messages from Moscow on Thursday. On the one hand, Russia voiced support for the deployment of an Organization for Security and Co-operation in Europe monitoring mission in Ukraine, according to the OSCE chairman. On the other, Russian forces in Crimea were accused of firing on one of its reconnaissance planes from an armoured personnel carrier, and Ukraine’s acting president said Russian forces were concentrated on the border “ready to invade.”
In response to Russian President Vladimir Putin’s military intervention in Crimea, Ottawa has already imposed travel restrictions on certain Russian officials and other individuals it blames for escalating the crisis, and has joined the US in threatening Moscow with expulsion from the G8. It has also frozen assets belonging to members of the former pro-Moscow government – including Mr. Yanukovych himself.
Mr. Baird said Thursday that economic sanctions against Russia are still on the table, and that Ottawa is prepared to do more if Mr. Putin doesn’t move toward a de-escalation.
U.S. President Barack Obama earlier this month issued an executive order imposing visa bans and asset freezes against so far unidentified people deemed responsible for threatening Ukraine’s sovereignty. And Mr. Kerry warned Thursday that Washington and the EU are preparing a “very serious” response to Sunday’s breakaway vote in Ukraine’s Crimea region.
The EU, for its part, agreed Thursday on a framework to impose travel bans and asset freezes on Russian individuals and firms – the bloc’s first sanctions against Russia since the Cold War. Moscow could be hit with those measures as early as Monday, the day after the Russia-backed Crimean referendum. The move would mark the most significant Western measure so far, both because Europe buys most of Russia’s energy exports and because its trade with Russia was worth about €335-billion in 2012 – 10 times that of the U.S.
Although individual nations have taken action at different paces, the G7 has spoken with one voice in its decision to suspend preparations for the G8 Summit planned for June in Sochi, where Russia last month hosted the Olympic Games. It also issued a statement collectively condemning the March 16 referendum as illegal.
With a report from Reuters