The United States plans to provide up to $2 billion in loan guarantees to Ukraine this year, the U.S. Treasury announced Tuesday.
The move is part of an international assistance package to prop up the country as it faces potential insolvency due to tensions with Russia and a separatist conflict in its east.
The Treasury said it would provide a $1 billion loan guarantee to Kyiv in the first half of this year, and work with the U.S. Congress to offer an additional $1 billion guarantee.
The move is to “help ensure the success of Ukraine’s reform program and ultimately restore financial stability, unleash economic potential, and allow Ukraine’s people to better achieve their economic aspirations,” said U.S. Treasury Secretary Jack Lew, according to a Treasury Department press release.
The U.S. Treasury said the guarantees would be contingent on Ukraine implementing conditions of its loan program with the International Monetary Fund. IMF officials are in Kyiv this week negotiating the details of a new tranche in a multi-billion dollar package.
U.S. Treasury Undersecretary Nathan Sheets is in Kyiv meeting separately with Ukrainian officials.
Four-way summit scrapped
Ukraine, Russia, Germany and France have scrapped plans for a summit this week on the conflict in eastern due to a lack of progress in the implementation of a September truce agreement.
The summit between Ukrainian, Russian, German and French leaders was to be hosted January 15 by Kazakhstan in its capital of Astana.
With fighting continuing between Ukrainian government forces and separatists, widely seen as being actively backed by Russia, there were no signs of any high-levels talks on Ukraine being scheduled soon.
At least 10 people were killed and 13 were wounded when a shell struck a passenger bus at a government army checkpoint near the town of Volnovakha, Donetsk region, on Tuesday, a regional press spokesman said.
Fighting has also intensified around Donetsk airport.
The foreign ministers of Ukraine, Russia, Germany and France did hold talks in Berlin Monday but concluded that “further work needs to be done'' in implementing the September 5 Minsk Protocol before a summit is held.
Kyiv says more than 200 Ukrainian soldiers have been killed in attacks by separatists since the truce was declared, including nine since the beginning of this year.
The separatists and government forces blame each other for regular violations of the cease-fire in a conflict which since its start in April has killed more than 4,700 people and displaced hundreds of thousands.
Kyiv and the West accuse Russia of fueling the conflict, a charge Moscow denies.
NATO beefing up exercises
NATO is planning to boost military exercises in the Baltics, the alliance’s top military commander said on Tuesday.
The move is in response to a recent surge in exercises by Russia in the region, said U.S. General Philip Breedlove.
“There will be several adaptations of our exercise program. The first series of changes will not be an increase in number but they will be to group them together... to better prepare our forces and to allow nations to work together as a NATO force, but we are looking at increasing some exercises,” said Breedlove speaking during a visit to a NATO base in Szczecin, Poland.
Breedlove also accused Russia of continuing to support separatist fighters in eastern Ukraine, expressing concern over Moscow’s “continued resupply, continued training and continued organization of the forces east of the line of conflict.”
New Russian moves
Meanwhile, Russia plans to strengthen its military capabilities in Crimea, the Arctic and its westernmost region of Kaliningrad, according to the head of the country's armed forces' general staff.
The remarks by General Valery Gerasimov are likely to deepen concern in the West over what it sees as Russia increasingly flexing its muscles since the start of the crisis in Ukraine.
The move seems to be in line with a new military doctrine President Putin signed in December.
Emphasizing the need to protect Russia's interests in the Arctic region, the new doctrine also listed NATO expansion as an external risk facing Russia.
Russia annexed Crimea from Ukraine in March of last year. Kaliningrad is a Russian enclave bordering Poland and Lithuania, both NATO members.
Some material for this report came from Reuters.