Ukraine risks highly defaulting on its debt unless Western donors come up with more funds on top of the billions of dollars of financial aid already promised, Prime Minister Arseny Yatseniuk said yesterday.

A year of revolution and war with pro-Russian separatists has pushed Ukraine’s hryvnia currency to record lows and crippled the economy, which was already near bankruptcy after years of corruption and economic mismanagement.

Parliament yesterday approved the new government’s economic programme of tough reforms aimed at securing the $27 billion so far promised by Western backers including the International Monetary Fund and the World Bank.

But Yatseniuk said international lenders needed to put more money on the table.

We need an international donor conference

“In order to survive, in order to prevent a default, we need an international donor conference, the adoption of a Ukrainian recovery plan at this conference and the help of our Western partners,” Yatseniuk told Parliament.

He specifically referred to a Financial Times report that the IMF, visiting Kiev this week for talks on its existing $17 billion bailout package, had identified a $15 billion shortfall in the programme.

“Next year, in addition to this programme provided by the IMF – and we didn’t say this, the FT said this – $15 billion is needed,” Yatseniuk said.

Parliament, dominated by parties favouring policies to move the country towards the European mainstream and away from Russia, voted in favour of the government’s action programme. The reforms include overhauling the tax system, raising energy tariffs and privatising state firms.

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