By Mario Trujillo - 05/01/14 08:23 AM EDT
The International Monetary Fund's executive board on Wednesday gave final approval to $17 billion in funds to Ukraine as GOP senators push for military aid for Kiev and increased sanctions on Russia.
The IMF board approved the two-year package, initially outlined in March, with $3.19 billion for immediate release. The rest will be contingent on bi-monthly reviews.
The move comes days after the United States and other European countries issued additional sanctions on Russian officials and businesses due to its failure to de-escalate the situation in Ukraine. GOP senators, however, have pushed to provide military aid to Ukraine and ramp up sanctions against Russia.
IMF chief Christine Lagarde said success would rest on maintaining public support while implementing economic reforms in the face of greater escalation from neighboring Russia.
“Risks to the program are high. In particular, further escalation of tensions with Russia and unrest in the east of the country pose a substantial risk to the economic outlook," she said in a statement.
Tens of thousands of Russian troops are massed at the eastern border and pro-Russian separatists, accused by the U.S. of having backing from Russia, have continued to occupy government buildings in eastern Ukraine.
The IMF program outlined Wednesday seeks to stabilize the country's financial system, reduce the debt, rein in the energy sector's debt and end the country's problems with corruption.
Ukraine has already acted on a number of reforms, including "revenue enhancements and expenditure restraints" as well as a change to its exchange rate. Ukraine has also vowed to keep its minimum wage in check and increase prices on gas and heating over the next several years to shrink the state energy company's debt, starting with increases this month.
The agreement was reached in late March after negotiations with the interim government in Ukraine after separate deals had failed in past years. New elections are scheduled for May 25.