The approval by the IMF of its $17bn financial support package for Ukraine is likely to ease concerns that the economy could suffer a near-term crisis, but severe challenges remain. The short-term pain stemming from the programme could well be greater than most expect. And the amount of financing needed may be larger than international lenders have pledged, depending on the amount that is ultimately used to repay debts on gas imported from Russia. Moreover, with this all coming against the backdrop of a central government losing control of its eastern provinces, the risk of a messier outcome is still large.
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