Ukrainian soldiers on exercise earlier in 2015. REUTERS/Valentyn Ogirenko The International Monetary Fund (IMF) announced early Thursday that Ukraine was getting a massive bailout totalling $40 billion (£26.2 billion) to prop up its struggling economy.

The overthrow of Ukraine's previous government and the war in the country's eastern region, which has been raging since March when Russia annexed Crimea, have been a huge hit to the country's public finances. The IMF will give the Ukrainian government $17.5 billion (£11.5 billion). Combined with financial assistance from the international community, the financial package amounts to about $40 billion in support over the next four years.

In a statement, IMF managing director Christine Lagarde said:



I am pleased to announce that the IMF team working in Kiev has reached a staff-level agreement with the Ukrainian government on a new economic reform program that would be supported by an Extended Fund Facility of SDR 12.35 billion (about $17.5 billion, €15.5 billion) from the IMF, as well as by additional resources from the international community. I intend to recommend this program for consideration to the IMF Executive Board. This new four-year arrangement would support immediate economic stabilisation in Ukraine as well as a set of bold policy reforms aimed at restoring robust growth over the medium term and improving living standards for the Ukrainian people ...

The change in the IMF-supported program (from Stand-By Arrangement to Extended Fund Facility) will itself provide more funding, more time, more flexibility, and better financing terms for Ukraine to implement its reform agenda. These IMF resources will be complemented by other bilateral and multilateral financing. In addition, as the Ukrainian government has previously announced, it intends to hold consultations with the holders of their sovereign debt with a view to improving medium-term sustainability. From these various sources taken together, a total financing package of around $40 billion is estimated over the four year period.

Early Thursday it looked like peace talks among world leaders in Belarus over a cease-fire in Ukraine were falling apart, at least according to Ukrainian President Petro Poroshenko. According to the BBC, Poroshenko said Russia's position was still "unacceptable" and that there was "no good news yet."



But nevertheless, about an hour later a shaky agreement was announced, predicated on a ceasefire beginning 15 February.