Leaders of the world’s largest finance and economic organizations warned on Wednesday that the growing number of international crises could undermine the global economy.
“Geopolitical risks have increased in various regions of the world; they constitute a significant burden for global economic development,” the heads of the World Bank, International Monetary Fund, the World Trade Organization, the Organization for Economic Co-operation and the International Labour Organization said in a joint statement after their meeting with German Chancellor Angela Merkel in Berlin.
Merkel said that despite the recent recovery in the global economy, progress in global economic development, productivity and employment have not been satisfactory so far.
“There are certain geopolitical risks that have a negative impact on the situation. Our political task is, if possible, to overcome these geopolitical risks. But if we think of for example the fight against ISIL, also the possible solution to the crisis in Ukraine, these are very difficult tasks,” Merkel said at a joint conference with the leaders of global economic and finance organizations.
- IMF approves 17.5 billion aid package
IMF Managing Director Christine Lagarde said that the crisis in Ukraine is still one of the most significant geopolitical risks.
She announced that the IMF’s Executive Board approved Wednesday a $17.5 billion aid package for Ukraine, based on a comprehensive economic reform program supported by the organization.
“This will provide additional financing for four years and hopefully help that country restore its situation, provided that stability can be maintained thanks to the cease-fire and Minsk agreement that was negotiated with great skills by leaders including ChancellorMerkel,” Lagarde said.
She said that the plan foresees disbursing about $10 billion worth of financing during the first year.
“What I can assure you is that Ukraine has satisfied all the prior actions that were expected and required of it in order to start running the program,” she stressed.
Russia’s annexation of Crimea in 2014 and the ongoing conflict between government forces and pro-Russian separatists in eastern Ukraine has badly hit the Ukrainian economy.
More than 6,000 victims have lost their lives in the conflict between Ukrainian forces and pro-Russian separatists since last April, according to the UN.
A cease-fire was signed between Ukrainian forces and pro-Russian separatists in Minsk on Feb. 12.
The cease-fire agreement includes the withdrawal of heavy weaponry from combat areas, the withdrawal of all foreign-armed formations and release of all hostages and unlawfully detained persons, as well as political reforms and decentralization in the eastern Ukrainian regions.
