“The $40 billion is the package that’s supposed to enable us, and I believe it will enable us to achieve financial stability in our banking and currency,” Jaresko said in a discussion at the Brookings Institution on Tuesday. “It isn’t a package that ensures us growth.”
Jaresko noted if peace is maintained in Ukraine, the country will need more financial support because the devastated eastern regions will have to be rebuild.
The International Monetary Fund (IMF) endorsed a four-year financial assistance package for Ukraine ammounting to $17.5 billion last week.
On Friday, Ukraine's Ministry of Finance announced that the country had begun receiving funds from the first tranche of the IMF assistance package.
The Finance Minister explained that the IMF package is based on macroeconomic forecasts, and might be changed because of external shocks, including violence in Eastern Ukraine.
“This package… assumes single digit inflation after a year's time, it assumes over the period of the program a very narrow band of currency fluctuation. Any risk to that macroeconomic forecast potentially changes the package of financial support that we will need,” Jaresko stated.
Jaresko added that any increase in violence in Eastern Ukraine has not been figured in, and expressed hope that “it won't happen.”
The Kiev government will pay social benefits to citizens in Eastern Ukraine when the country’s financial system is restored or if they reregister for them in other parts of the country, Ukrainian Finance Minister added.
“We have an amount of arrears to those who have not been able to reregister, but we will pay them as soon as that is possible, or when and if they register,” Jaresko said on Tuesday.
The Finance Minister noted that those who have reregistered outside of Eastern Ukraine receive payments.
“More and more people register outside the occupied territory, and each time we pay them in full their arrears on pensions and subsidies,” she added.
Jaresko claimed that it is impossible to bring cash into the eastern part of Ukraine, because of the financial system closure in the region.
“Every armor truck with money, every bank, every ATM has been robbed. It's impossible to bring cash into that part of the country,” she said.
On Friday, Russian Finance Minister Anton Siluanov said that Moscow will contribute $13.8 million to the first tranche of the IMF financial aid to Ukraine.
Ukraine will receive some $10 billion of IMF money in 2015, which is part of a $40-billion package of overall international aid.
To receive the IMF funds in full, Ukraine agreed to a severe austerity program that includes shedding 24,000 government jobs, raising taxes, privatizing state assets and withdrawing subsidies on natural gas.
If the fighting in Ukraine resumes, the country will need additional funds, according to the IMF.
