The International Monetary Fund has given Ukraine the first $3.19 billion tranche of an eventual $17 billion aid package intended to bolster its struggling economy, but in light of Ukraine's gas debts the money may soon belong to Russia.
The International Monetary Fund, or IMF, delivered the aid tranche to the Ukrainian Central Bank on Wednesday, Itar-Tass reported.
Nearly $2 billion will be used to finance Ukraine's budget deficit, while the remaining sum will be placed in the Central Bank's foreign currency reserves.
However, at the core of Kiev's economic woes is its unresolved dependency on Russia for natural gas supplies. Ukraine owes $3.5 billion to Gazprom according to Russian Energy Minister Alexander Novak.
In April, Gazprom hiked the price Ukraine must pay for Russian gas when Moscow cancelled two discounts granted to the previous Ukrainian government. This effectively doubled the price from $268.50 per thousand cubic meters to $485.50, making the costs imposed on Kiev higher than any other customer in Europe.
Ukraine has stated that it is willing to pay its bill at the original price, but stressed it would be unable to pay the price set on April 1.
Gazprom has threatened to limit the supply of natural gas to Ukraine in June if it does not receive payment for May deliveries, creating a situation in which IMF aid may be passed on directly to Gazprom in order to ensure a steady flow of gas from Moscow.
The IMF's $17 billion aid package was approved last week and designed to be dispersed incrementally over a two-year period.
A Message from The Moscow Times:
Dear readers,
We are facing unprecedented challenges. Russia's Prosecutor General's Office has designated The Moscow Times as an "undesirable" organization, criminalizing our work and putting our staff at risk of prosecution. This follows our earlier unjust labeling as a "foreign agent."
These actions are direct attempts to silence independent journalism in Russia. The authorities claim our work "discredits the decisions of the Russian leadership." We see things differently: we strive to provide accurate, unbiased reporting on Russia.
We, the journalists of The Moscow Times, refuse to be silenced. But to continue our work, we need your help.
Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and every contribution makes a significant impact.
By supporting The Moscow Times, you're defending open, independent journalism in the face of repression. Thank you for standing with us.
Remind me later.
