The International Monetary Fund has warned Ukraine that it will block its $40bn bailout programme if Kyiv fails to confront crippling corruption.
The IMF’s managing director, Christine Lagarde, said “Without a substantial new effort to invigorate governance reforms and fight corruption, it is hard to see how the IMF-supported programme can continue and be successful.”
The shot across the bows comes one week after the country’s economy minister Aivaras Abromavivius resigned.
The reform minded Abromavivius, much admired in Europe and the US, said “My team and I have no desire to be a screen for brazen corruption or puppets for people who want to take control over state funds in the style of the old government.”
The Ukraine economy is contracting at an annual rate of more than 7 percent and IMF cash has prevented a collapse in manufacturing output.
The IMF has held back $1.7bn since October amid fears the money will end up in the pockets of corrupt officials.