The United States has pledged $2 billion in loan guarantees to Ukraine to help Kyiv with "near-term social spending" this year, and said it was ready to step up sanctions against Russia if needed.

The loan agreement was signed by U.S. Treasury Secretary Jack Lew and Ukrainian Finance Minister Natalia Yaresko in Kyiv on January 28.

Lew said the loan guarantees were contingent on Ukraine continuing with fiscal and anticorruption reforms and remaining on track to meet the conditions of its loan program with the International Monetary Fund (IMF).

An IMF delegation is now in Kyiv negotiating a bailout package that is currently worth $17 billion.

The European Union earlier this month made a similar pledge of 1.8 billion euros ($2.1 billion) to strengthen Ukraine’s economy.

After the signing, Yaresko said that the loan agreement will allow Ukraine "to more actively implement reforms."

Lew told reporters the United States was prepared to step up sanctions against Russia over its support for separatists who have seized parts of two eastern provinces and are fighting government forces.

"We remain prepared to do more [on sanctions] if necessary. To that end, we will continue to work with our allies to increase the pressure on Russia," Lew said.

However, Lew said existing sanctions could be eased if Russia abided by the terms of a cease-fire deal signed in Minsk in September.

On January 27, European Union leaders asked their foreign ministers to consider possible new sanctions on Russia when they meet January 29.

Also on January 27, U.S. President Barack Obama and German Chancellor Angela Merkel discussed by phone the importance of finalizing a "robust package of financial support" for Ukraine.

The two also spoke about the "significant increase in violence" in eastern Ukraine, where more than 5,000 people have been killed since April.



On January 28, Ukraine's military reported the deaths of three more Ukrainian soldiers over the previous 24 hours.

Meanwhile, Russian Foreign Minister Sergei Lavrov has issued a new warning to Ukraine to stay out of NATO.

In an article for a Serbian magazine that was posted on the Russian Foreign Ministry website on January 28, Lavrov said that "to prevent further splits in Ukraine, it is of fundamental importance that it retain its nonaligned status.

Lavrov also repeated Russia's call for direct talks between Kyiv and separatist leaders in the Donetsk and Luhansk provinces.

Last month, Ukraine scrapped a law that had declared it neutral and prevented it from joining any military alliance.

The law had been passed in 2010 during the presidency of Viktor Yanukovych, who was ousted last February after months of protests over his decision to reject tighter ties with the EU and move closer to Moscow instead.



Kyiv and NATO accuse Russia of providing direct military support to the pro-Russian separatists.

President Petro Poroshenko predicted last month that Ukraine would be ready to join NATO in 5-6 years and suggested a referendum would be held on the issue at that time.

With reporting by Reuters, AFP, AP, and Interfax