* Premature to assess Kiev's needs, Lagarde says
* "Numbers here, numbers there" -- IMF needs facts
* IMF team in Ukraine next week
By Anna Yukhananov
WASHINGTON, Feb 28 The head of the International
Monetary Fund said on Friday that there was no need to "panic"
in terms of delivering economic aid to Ukraine, as she cast
doubt the nation would need as much immediate help as its new
"We do not see anything that is critical, that is worthy of
panic at the moment," IMF Managing Director Christine Lagarde
told reporters. "We would certainly hope that the (Ukrainian)
authorities refrain from throwing lots of numbers which are
really meaningless until they've been assessed properly."
Ukraine's government coffers have been depleted by huge debt
repayments, efforts to protect its currency and high energy
costs. The country's new leaders, appointed after President
Viktor Yanukovich was ousted last weekend, say they need $35
billion over two years to avoid default, and may need $4 billion
Yanukovich, fearing a political backlash, avoided unpopular
economic policies recommended by the IMF, such as letting the
hryvnia currency float and phasing out costly energy subsidies.
He managed to secure a $15 billion aid package from
Ukraine's former Soviet master Russia last year, but only $3
billion has been disbursed and the rest is in doubt.
Yanukovich's government fell after weeks of street protests
against his government and closer ties with Russia.
Now, support from the Washington-based IMF is seen as
critical to shore up Ukraine's collapsing finances and get its
economy on the right track. The United States and European Union
say they are willing to provide funds alongside an IMF program.
Russia also supports the Fund's involvement.
An IMF team is set to arrive in Kiev early next week to
collect information and start working on a loan program.
"I think it's highly premature to assess financial needs,
numbers here, numbers there," Lagarde said after meeting with
German Foreign Minister Frank-Walter Steinmeier. "We need to
rely on facts, we need to rely on the situation as it is."
EAST OR WEST?
The IMF, which has 188 member countries, tries to be an
independent broker, and must follow strict rules before doling
out aid to ensure a country will be able to pay back the money.
But it could face pressure to loosen some conditions or
speed up the approval of funds to ensure Ukraine does not
collapse, or to keep it out of Russia's orbit. At the same time,
the IMF is wary of fronting billions of dollars to a country
that has a history of not sticking to its reform pledges.
U.S. lawmakers on Friday said they were working on
legislation to authorize financial assistance. They said
Congress needed to support Ukraine's democracy and independence
and encourage it to strengthen ties to the West, rather than to
President Vladimir Putin's Russia.
The IMF wants all countries to work together, and thinks
Russia is interested in stabilizing its western neighbor, given
the close economic and trade ties between the two countries,
Germany's Steinmeier said.
"Right now I can't tell how far Russia has already decided
on their readiness to participate in supporting Ukraine," he
added. Steinmeier said on Thursday the EU would consider giving
Ukraine about $1 billion.
Russia promised Ukraine $15 billion in aid after Yanukovich
spurned a trade deal with the EU and turned to Moscow instead.
But it halted the aid after Ukraine's parliament voted to
strip Yanukovich of his powers.
Some Western diplomats hope Russia will pay its next $2
billion installment, even if the rest does not go through.
Ukraine's finance minister said he hoped the IMF would work
on an aid package of at least $15 billion. That figure would be
in line with the IMF's last loan to Ukraine in 2010, which was
frozen a year later after Kiev failed to implement the required
reforms, including removing gas price subsidies.
After reviewing the question of why the last bailout went
off track, the IMF's board in December said Kiev should get less
money in any future aid package, and should be required to
implement more reforms up-front.
The Fund is likely to want reassurances Ukraine's new
leaders are more committed to reforms than their predecessors.
One stop-gap option would be to provide Ukraine with money
under the IMF's Rapid Financing Instrument, which helps
countries with urgent financial needs and often does not have
any explicit conditions attached.
According to the rules of that program, Ukraine would be
able to borrow up to $1.06 billion in a year. And the IMF's
board could approve the program within two to three days after
IMF staff reached an agreement with the country's authorities.