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US Senate votes to advance Ukraine aid bill

(Xinhua) Updated: 2014-03-25 10:08

WASHINGTON - The US Senate on Monday voted to advance the Ukraine aid bill which would grant loan assistance to the crisis-stricken eastern European country and ratify reform measures for the International Monetary Fund (IMF).

In a procedural vote of 78-17, the US Senate agreed to move forward the bill, which was backed by the Senate Foreign Relations Committee on March 12.

The legislation was on top of the agenda after the Senate returned from a week-long recess. Both Democrats and Republicans generally supported the 1-billion-dollar assistance to Ukraine, but many Republicans wanted the IMF reform language to be stripped from the bill.

If the Senate approves the legislation in a final vote, it will go back to the House where the GOP leaders have indicated unwillingness to support a Ukraine aid measure that included IMF reform language.

Earlier this month, the Republican-led US House of Representatives passed a legislation including only the loan guarantees for Ukraine.

Lawmakers in the House last Friday introduced a new bill that again does not include the IMF provision requested by the Obama administration, setting up a showdown with the Democratic- controlled Senate.

Both chambers will have to reconcile the differences between them before a final version of the Ukraine aid bill can be approved and signed into law.

The IMF's Board of Governors approved the quota and governance reform package in December 2010. The package will boost the IMF resources by doubling its quotas and give the emerging economies, like China, India and Brazil, more clout in the 188-member global lender. If implemented, it would also increase the amount of money Ukraine can borrow from the IMF.

The reform package has to be accepted by the IMF membership, which in many cases involves parliamentary approval. The United States holds 16.7 percent voting shares, which gives it the veto power to the reform package that needs 85 percent voting shares to take effect.

The Obama administration has pushed Congress several times to approve a shift of 63 billion US dollars from an IMF crisis fund to its general lending fund to give a green light to the reform package. US Congress failed to add ratification of the changes into the mid-January comprehensive spending bill, due to refusal from the House Republicans.

The political dispute clouds prospects of the much-delayed reforms of the international institution at a time when the United States and the European politicians want it to take a leading role in helping stabilize the Ukrainian economy. An IMF mission team is expected to conclude its work of assessing the country's needs to prepare for a bailout program Tuesday.

"The IMF governance reform legislation is designed to strengthen the IMF without the need to authorize one additional dime of the taxpayer's money and with no economic, financial, or political downside for the United States," Edwin Truman, former assistant secretary of the US Treasury, said in a recent policy paper. "US formal approval is the only thing standing in the way of its (IMF reform) implementation. The administration needs to redouble its efforts to forge a bipartisan approach with the Republican leadership. This time the US authorities must get the job done."

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