The United States has pledged financial support of $2 billion to Ukraine to help them prevent a looming bankruptcy, and boost recovery efforts amidst the financial turmoil in Europe and Asia. Ukraine is trying to recover and stabilize its economy, but the waging conflict in Eastern Ukraine with Pro-Russia rebels is hurting the economy and driving down consumer spending.
Help is necessary, but the International Monetary Fund (IMF) is reluctant to donate money, worrying that the new government in Kiev might not move forward with its recovery plans and fail to implement promised reforms. The cost of insuring exposure to Ukrainian debt rose to a new five-and-a-half-year high, revealing a default risk that is second only to Venezuela in the world. Nevertheless, the IMF has provided a bailout package of $17 billion and has set out a plan for Ukraine to prevent the country from going into bankruptcy. But the IMF has estimated that Ukraine still needs $15 billion just to balance its deficit. That is why the United States has set conditions for its loan to Ukraine with an initial $1 billion loan as long as Kiev remains on track, and then another $1 billion if it continues making progress six months to a year later.
Meanwhile in eastern Ukraine, fighting between Ukrainian troops and Pro-Russia rebels continues to disrupt peace and country stability. Talks of a ceasefire and a future meeting date in Kazakhstan involving Germany, France, Russia, and Ukraine have yet to be successful. These talks are aimed at settling on an agreement for a ceasefire, which would allow Ukraine to focus on its financial problems.