By Anna Yukhananov
WASHINGTON, March 4 Ukraine would be able to
borrow more money in the midst of its current crisis if U.S.
lawmakers sign off on a measure to increase the International
Monetary Fund's financial power, U.S. officials said on Tuesday.
The IMF legislation would double the fund's resources and
give countries in crisis, such as Ukraine, access to a bigger
pool of potential aid.
"The fund's central role in supporting economic reforms and
catalyzing financial assistance for Ukraine underscores again
why the IMF is critical for our national security interests," a
U.S. Treasury official said.
The Treasury said it was asking Congress to link IMF funding
measures to legislation that would provide at least $1 billion
in loan guarantees to support Ukraine's economy.
The crisis in Ukraine, where IMF support is seen as critical
to shoring up Kiev's collapsing finances, may give the Obama
administration the leverage it needs to convince Congress to
approve long-sought reforms to the fund, a multilateral lender
based in Washington.
Edwin Truman, a senior Treasury official under former
President Bill Clinton, said several other IMF funding requests
were approved in Congress during a period of crisis, such as the
global financial crisis in 2009.
"It doesn't mean you wait until it's raining before you
repair the roof," said Truman, now a senior fellow at the
Peterson Institute for International Economics. "But that tends
to be what we do, for better or worse."
An aide to Senator Bob Corker, the top Republican on the
Senate Foreign Relations Committee, which is writing the Ukraine
aid legislation, said the IMF proposal was on the table.
However, U.S. support for the IMF has been a contentious
issue in the Republican-led House of Representatives, and it is
unclear whether it would be willing to take up the measure.
A senior Senate Republican aide said an IMF package would be
a "no go" in the House.
The United States has pledged economic and technical
assistance to Kiev, saying its support should be in tandem with
an IMF program. Ukraine has asked the IMF for at least $15
billion to avert bankruptcy and is struggling to cope with a
military intervention by Russia in Crimea.
For about a year, the Obama administration has been pushing
Congress to approve a shift of some $63 billion from an IMF
crisis fund to its general accounts in order to maintain
Washington's influence at the global lender, and to make good on
an international commitment made in 2010.
The White House on Tuesday tucked a request for a shift in
IMF funding into the president's proposed budget for the 2015
fiscal year, which begins on Oct. 1.
"We are working with Congress to approve the 2010 IMF quota
legislation, which would support the IMF's capacity to lend
additional resources to Ukraine, while also helping to preserve
continued U.S. leadership within this important institution,"
U.S. Treasury Secretary Jack Lew said in a statement earlier on
Congress must sign off on the IMF funding to complete the
2010 reforms, which give emerging markets a greater say in the
The reform of the IMF's voting shares, known as quotas,
cannot proceed without the United States, which holds the only
controlling share of IMF votes.
The quotas determine how much each country contributes to
the IMF and how much it may borrow.
Ukraine's quota at the IMF is now about $2.1 billion, but
that would increase to $3.1 billion once the 2010 reforms go
through, meaning Kiev would be able to borrow more IMF money.
The White House had sought to include the IMF legislation in
a proposed $1 trillion federal spending bill in January, but
U.S. lawmakers failed to include it in the final version.
The administration's requests have been met with skepticism
from some Republicans, who see them as tantamount to approving
fresh funding in a tight budget environment. Some lawmakers have
also raised concerns about how well the IMF was helping
struggling economies in Europe and the risks attached to IMF
But the crisis in Ukraine may help remind lawmakers why the
IMF is a good investment, said Clay Lowery, a senior Treasury
official in the Bush administration and now with Rock Creek
"If Ukraine doesn't make it clear that there are national
interests to have the IMF around, I'm not sure what else we're
going to find," he said.