* Ukraine appeals to donors to back "Marshall plan"
* Kiev plans rehabilitation programme for the east
* EU official says more funds depend on reforms
By Adrian Croft
BRUSSELS, July 8 Ukraine's deputy prime minister
told international donors on Tuesday that a $17 billion
International Monetary Fund bailout was "not enough" because of
"unprecedented Russian-inspired aggression".
Vice Prime Minister Volodymyr Groysman urged international
donors at a meeting in Brussels to support a "Marshall Plan" for
economic recovery that the government will present at a donors'
conference expected to be held in the autumn.
The IMF approved a $17 billion two-year aid programme for
Ukraine in April to help the former Soviet republic's economy
recover after months of upheaval, unlocking further credits from
other donors of about $15 billion. Ukraine's economy has
stagnated for the past two years and the government has said it
is likely to shrink by 3-5 percent this year.
"Today Ukraine is confronted with new challenges that cannot
be solved in a standard fashion," Groysman told the meeting,
through an interpreter.
"The International Monetary Fund package has helped
recovery, but today this is not enough, in that we have
unprecedented aggression on behalf of the Russian Federation."
The aggression was not only military, but also in the
economic and energy fields, he said.
Moscow has vowed to raise trade barriers in response to
Ukraine entering a free trade agreement with the EU, and the
state-controlled Russian gas exporter Gazprom has cut
off supplies to Ukraine in a dispute over pricing and
non-payment of debts.
Groysman said Ukraine had drawn up a three-year plan for
recovery and growth for 2014-16, "a kind of Marshall Plan for
Ukrainians", referring to U.S. reconstruction aid for Europe
after World War Two.
"Stabilisation and renewal and return to economic growth is
most important for us. We call upon the donors to participate in
this new plan of growth and recovery," he said.
RECOVERY AND GROWTH AGENDA
Donors agreed to help Ukraine to develop the plan, called
the Economic Recovery and Growth Agenda, including potential
sources of funding, according to a joint statement issued after
Apart from EU countries, the United States, Canada, Japan,
Norway, Switzerland and international financial institutions
took part in Tuesday's meeting.
Donors including the European Union have previously pledged
billions of dollars in loans and aid to help Ukraine, whose
economy came close to bankruptcy earlier this year during a long
political crisis triggered by then-president Viktor Yanukovich's
decision to spurn the free trade agreement with the EU.
New president Petro Poroshenko, installed after Russia
annexed Ukraine's Crimea region in March, moved closer to the EU
by signing that agreement at the end of June.
Groysman said Ukraine planned a programme to modernise
infrastructure and create new jobs in the area of eastern
Ukraine where the army is battling an uprising by pro-Russian
He appealed for international help to diversify Ukraine's
energy sources, reducing its reliance on Russian gas. The
government would also combat corruption, he said.
The EU, which has promised Ukraine 11 billion euros ($15
billion) of loans and grants over the next seven years, has so
far handed over 850 million euros, EU Enlargement Commissioner
Stefan Fuele told the conference.
Fuele stressed that any further financial support from the
European Union would depend on Ukraine pushing ahead with
reforms, including constitutional reform, decentralisation and
"We also need to see further action on the economy, trade
and business, and in the energy sector," Fuele said.
($1 = 0.7331 Euros)
(Editing by Kevin Liffey)