Partisan bickering had held up $1bn in loan guarantees, but Senate and House pass bills to help shore up Ukraine economy

This article is more than 6 years old

This article is more than 6 years old

The US Congress agreed a major aid package to Ukraine on Thursday, overcoming weeks of partisan disagreement that has held up around $1bn in loan guarantees to Kiev.

The Senate and the House of Representatives passed bills to approve a loan package to shore up Ukraine’s unstable economy as it seeks to resist further intervention from Russia. The bills also allow for the imposition of further sanctions against Moscow over its annexation of Crimea and up to $150m in direct aid to Ukraine.

The US support bolsters a much larger aid package from the International Monetary Fund of up to $18bn, also announced on Thursday. In total, the IMF deal is estimated to unlock around $27bn in support from the international community over the next two years, including support pledged separately from the UK and Japan.

Ukraine's finance ministry has previously said it needs $35bn over the next two years to avoid default.

The Senate passed the bill by a voice vote after the Democratic speaker of the House, Harry Reid, dropped a series of IMF reforms from the legislation opposed by Republicans. The House bill passed on a 399-19 vote.

Disagreement between Democrats and Republicans over the IMF reforms, which the White House had wanted to be included in a Ukraine aid bill, had delayed passage of the legislation for several days.

Reid told fellow senators their final agreement on the bill was an important milestone. “This bill is a reality check to [Russian president] Vladimir Putin that the United States will not stand idly by while he plays the role of a schoolyard bully,” he said.

Senator Bob Menendez, the powerful chairman of the foreign relations committee who helped shepherd the bill through the upper chamber, said the combined congressional votes were "critical for President Putin to hear".

"We are in a dangerous moment in history with global consequences – and the world is watching," he said.

The House passed a different version on the bill, although congressional sources said there was sufficient agreement between the two chambers for the votes to amount to a significant breakthrough.

Further votes in the House could be required later on Thursday to iron out differences between the two bills before a final measure is sent to the White House.

Barack Obama’s administration has been pushing Congress hard to authorise loans to the new Ukrainian government, a move it believes will help discourage Putin from further encroaching on its territory.

Speaking in Rome on Thursday, prior to the vote, Barack Obama welcomed the IMF package as a “major step forward”, and renewed his plea for Congress to pass a US plan. “This is a concrete signal of how the world has united around Ukraine,” he said.

The secretary of Ukraine’s national security council, Andriy Parubiy, said financial support would be an important stabiliser in Ukraine as it seeks to counter efforts by Russia to undermine presidential elections scheduled for May.

Parubiy told an audience of the Atlantic Council thinktank that 18 leaders pro-Russian “subversion groups” had recently been arrested in southern and eastern Ukraine over attempts to foment unrest.

Speaking on a webcast from Kiev, he said that Russian attempts to destabilise the new Ukrainian government were failing, but added there was “still a high risk” that Putin would attempt another cross-border intervention now it has established control over Crimea.

Tens of thousands of Russian troops have been deployed on Ukraine's eastern border, and Russia’s claims that it has no intention of intervening further are being treated with scepticism.

Parubiy, who helped co-ordinate the protests that dislodged former Ukrainian president Victor Yanukovych before taking his senior national security post, said Kiev was seeking to fortify borders and prepare its military for a possible attack.

“We understand that every day, every night, we might see a huge attack on the territory of continental Ukraine – and we are getting ready for that.”

He said that while grateful for the aid and sanctions imposed by western nations, Kiev was hoping for “more visible” support, such as participation in joint military exercises from countries such as the UK and US.