Remarks by Treasury Secretary Lew at a Joint Press Availability with Ukrainian Prime Minister Yatsenyuk and Minister of Finance Natalie Jaresko

SECRETARY LEW:  Thank you, Prime Minister Yatsenyuk, Finance Minister Jaresko, for your warm welcome here in Kyiv and for welcoming me back for my second visit this year to your country.  We had good meetings this morning, both with the Prime Minister and the Finance Minister, but also with members of the Rada.  We exchanged ideas on what steps are being taken and need to be taken to continue moving ahead with the reform agenda.

We, the United States, remain committed to working with the Government of Ukraine to build a more independent, secure, and prosperous country.  And this opportunity to have conversations, particularly on the eve of my going to the G-20 meetings in a few days, is very timely.

We’re working with our Congress in the United States, as the Prime Minister said, on a third $1 billion dollar loan guarantee in the coming months.  And one of the issues that we discussed in each of the meetings this morning was how critical the reform agenda is to maintaining international support in the IMF and the other international bodies, but also in terms of each of us who are making the case in our home countries to continue the effort.

The progress made in the last two years is very real.  It has lent credibility to the effort that makes the case for support very strong.  But it’s important that progress continue to be made, and it’s important that the possibility of going in the other direction be strongly resisted.  And we talked about that in terms of tax policy, in terms of energy policy, and in terms of the need to really continue the effort to fight corruption.

The Government and the Rada remain focused on the reform agenda.  Legislation continues to be passed.  It is important that that process continue, and it’s important that — as we all work together — the case be made that Ukraine is continuing to meet its fiscal obligations to the international bodies, that the reform agenda on energy remains strong and that the effort to combat corruption is redoubled.

Thank you very much, and it’s a pleasure to be here with you today.

QUESTION:  Hi.  My question is primarily for the Secretary.  I was wondering – I would like to ask a question about the Russian bond that was mentioned by the Prime Minister.  If you could tell us more about what is the U.S. stance towards the possible change in IMF policy with regards to lending arrears, specifically on Ukraine.  Would this solve the country’s debt woes, and what would the U.S. reaction be to any Russian reaction to this news, legal or otherwise?

LEW:  I think that the agreement that Ukraine has reached with bondholders is a very important one.  We very much urge bondholders to [inaudible] negotiations.  It was done on the basis that treated all bondholders equally.  It provides the kind of path forward so that Ukraine can continue to see a growth path and a way out of the fiscal troubles that have been created over the past.  And we strongly have urged Russia to participate along with other bondholders in that agreement.  I think that the challenge of how to deal with the situation is really going to depend a lot on how Russia responds — if they take the offer up.  It’s available to them, along with other bondholders.  If not, I think that Ukraine has demonstrated that it is prepared to work with all bondholders on a fair basis, and I think it really falls to each bondholder to decide whether or not to participate.

QUESTION: (In Ukrainian)

LEW:  As the Prime Minister and Finance Minister and I have indicated, we’re in discussions now on a third loan guarantee.  It would be an additional billion dollar loan guarantee. Obviously it, as were the others, is contingent on the reform program being implemented.  We’ve been encouraged by the actions taken in the past, and we wouldn’t be engaged in the discussion if we didn’t think there was a very strong case to make to provide that additional support.  Obviously we have to work with our Congress in order to make sure we have the resources to do that, but there is strong support for Ukraine in the United States.  There is a great deal of respect for the policies that have been implemented, and a deep understanding of the stress that Ukraine faces due to the Russian activities in the east of the country.

I think today’s conversation reflects the importance of how Ukraine manages going ahead, because the international support from the IMF, the bilateral support – not just from the United States, but from other countries – is very much tied to the progress that the government has made on putting financial and economic reforms in place, and on continuing to tackle the problem of corruption.  These are not new challenges, but what’s new is that the current government has been dealing with it with more determination than anyone has seen in the past.  There’s still, as the Prime Minister said, much work to be done, but the actions taken suggest that there’s a commitment there.  The predictions about the future are encouraging.  And we’re, as I say, involved in discussions now about the terms of the third $1 billion dollar loan guarantee.