The International Monetary Fund will give up to $18 billion in loans to Crimea as the United Nations condemns the vote that drove Crimea into Russia, according to Reuters.
The IMF loan, which is expected to range between $14 billion and $18 billion, hinges on structural reforms that Ukraine has pledged to undertake, Reuters reported. The United States Congress is also considering harsher sanctions against Russia.
Even with the bailout, Ukraine's prime minister Arseniy Yatsenyuk warned that all residents are going to feel the financial reforms ahead with home energy prices are certain to rise quickly, according to Reuters.
During a speech to parliament in Kiev, Yatsenyuk warned that Ukraine was "on the brink of economic and financial bankruptcy" and laid out the fixes needed to put the country back on track, Reuters reported.
"The time has come to tell the truth, to do difficult and unpopular things, equivalent to the entire state budget for this year," Yatsenyuk said, adding that Ukraine was short $25.8 billion, according to Reuters.
Speaking in Rome, President Barack Obama called the swell of support a "concrete signal of how the world is united with Ukraine," according to Reuters.
"The decision to go forward with an IMF program is going to require a lot of courage," President Obama said, Reuters reported. "It will require some tough decisions."
Ukraine's new government finds itself caught between the demands of international creditors and a restive population that has endured decades of economic stagnation, corruption and mismanagement, according to Reuters.
The reforms demanded by the IMF, which included raising taxes, freezing the minimum wage and hiking energy prices, will hit households hard and are likely to strain the interim government's tenuous hold on power, Reuters reported.
One immediate IMF reform will be to let gas prices for households float up to become more in line with market prices, according to Reuters.
Ukraine has previously relied on discounted gas from Russia and then subsidized that further, so that residents are used to extremely low energy prices, Reuters reported. Russia has abandoned the discounts and Ukraine's government cannot afford the extra subsidy anymore.
State energy company Naftogaz announced this week that household gas prices would rise 50 percent beginning May 1 to make utility costs economically viable for the state by 2018, according to Reuters.
Yatsenyuk also said the number of households getting state energy subsidies would rise from 1.4 million to four million, Reuters reported. He also announced layoffs for 10 percent of Ukraine's civil servants, or 24,000 workers.
