Continuing to play up their $17 billion bailout of the bankrupt interim Ukrainian government, the International Monetary Fund (IMF) is now expressing concerns that the protests in the eastern portion of the country are threatening their “reform” program.
The protesters in the east are seeking reforms too, in the form of enhanced autonomy and a more federal form of government. Yet the IMF’s program was built around the assumption of a strong, centralized government, and such a change isn’t in the cards.
The IMF is thus warning that anything which results in a loss of tax revenue from the eastern region, whether it is secession or an autonomy deal that gives them more financial independence, would require a “redesign” of the bailout.
Even less in Ukraine’s interim government’s hands, the IMF warns deterioration of Russian relations would also jeopardize the plan, as they were counting on Russia to keep trading with Ukraine, despite a Western-backed regime change that installed a hostile government there.