Ukraine asks IMF for new rescue package

Ukraine has asked the International Monetary Fund (IMF) for a new and broader bailout package and will attempt to renegotiate its debt with bond holders.

IMF chief Christine Lagarde announced the request made by Ukraine President Petro Poroshenko on Wednesday after a meeting the two had on the sidelines of the World Economic Forum in Davos, Switzerland.

Lagarde said the Ukraine leader was intending to replace the country’s current $17 billion rescue package with a new one. Lagarde said she will submit the request to the IMF board for immediate consideration.

“This request [for a new program of financial rescue loans to Ukraine] I will submit to the board of the IMF, which will be convened as quickly as possible in order to review relevance of this EFF [Extended Fund Facility] program, which I would certainly propose to support,” she said. “The EFF is for an extended period of time, so it is longer than the SBA [Stand-By Arrangement].”

Lagarde declined to give specific figures but said the new plan would reflect Ukraine’s commitment to structural economic reforms.

“At this point in time, I would like to say that it really is a demonstration of the determination of the Ukrainian authorities to conduct serious long-term structural reforms, in addition to also adjusting their fiscal policy in order to make sure that the Ukrainian economy is in a position to recover,” she said.

The Ukrainian government is seeking to turn around the county’s war-torn economy, which shrank 7.5 percent in 2014 and is projected to contract by 5 percent this year. Ukraine’s reserves have dropped more than 50 percent in 2014 to less than $10 billion for the first time in five years.