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Senate leader Reid drops IMF reforms from Ukraine aid package

Laws and LegislationUkrainePoliticsCrime, Law and JusticeEconomy, Business and FinanceFinanceKiev (Kiev Oblast, Ukraine)

WASHINGTON -- Bowing to Republican opposition, Senate Majority Leader Harry Reid (D-Nev.) said Tuesday that legislation to provide $1 billion in aid to Ukraine would move forward without a contested provision to expand the loan-making authority of the International Monetary Fund.

The decision to drop the White House-sought IMF changes will probably clear the way for swift passage of the Ukraine aid package, which also would impose sanctions against Russia over its annexation of the Crimean peninsula.

"As much as I think a majority of the Senate would have liked to have gotten that done with IMF in it, it was headed to nowhere in the House," Reid told reporters.

Republicans, while not necessarily opposed to the IMF changes, argued that its inclusion in the Senate bill was unnecessarily delaying funds to shore up the Ukrainian interim government.

House Speaker John A. Boehner (R-Ohio) earlier called on the Senate to simply pass the House's separate sanctions and aid bills instead of bringing "unrelated items into this debate" that only "slow the whole process down." A bill to provide $1 billion in loan guarantees passed the House this month, while its version of a sanctions bill advanced from the Foreign Affairs Committee on Tuesday.

The IMF approved changes several years ago as part of a plan to bolster participation in the fund from countries with emerging economies. Ukraine's ability to borrow from the fund would almost double to $14.5 billion, officials said. The U.S. is the only IMF member country that has not approved the changes. White House officials said Monday that the additional loan authority would be key to Kiev's ability to stabilize its economy.

The fund's managing director, Christine Lagarde, also pressed for congressional approval of the IMF reforms in a Wall Street Journal op-ed, saying the body’s "continued ability to fight economic and financial crises rests on its approval."

Reid acknowledged that the White House would be "disappointed" by his decision, but cited Secretary of State John F. Kerry, who said in recent testimony to a House panel that the aid was needed "immediately."

"We have to get IMF reform. But we can't hold up the other" bill, Reid said.

The Senate had overcome an initial procedural hurdle on its Ukraine bill Monday. Final passage of the revised legislation could come no later than Wednesday, Reid said.

michael.memoli@latimes.com

Twitter: @mikememoli

Times staff writer Lisa Mascaro contributed to this report.

Copyright © 2014, Los Angeles Times
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Laws and LegislationUkrainePoliticsCrime, Law and JusticeEconomy, Business and FinanceFinanceKiev (Kiev Oblast, Ukraine)
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