IMF chief Christine Lagarde warns Ukraine over rescue program

An IMF program to prop up cash-strapped Ukraine`s stricken economy cannot continue without reform by the authorities in Kiev, International Monetary Fund chief Christine Lagarde warned Wednesday.

"Without a substantial new effort to invigorate governance reforms and fight corruption, it is hard to see how the IMF-supported program can continue and be successful," Lagarde, the Washington-based lender`s managing director, said in a strongly worded statement.

The IMF is the main source of rescue financing for Ukraine as the hard-up country battles with crises ranging from falling commodity prices to a new trade embargo by Russia.

The Fund has a $17.5 billion rescue program for Ukraine on condition the government enacts economic reforms and fights corruption.

"I am concerned about Ukraine`s slow progress in improving governance and fighting corruption, and reducing the influence of vested interests in policymaking," said Lagarde.

"Ukraine risks a return to the pattern of failed economic policies that has plagued its recent history," she added.

"It is vital that Ukraine`s leadership acts now to put the country back on a promising path of reform."

It is the second time in a matter of days that Lagarde has voiced concern about the portents for the bailout program.

Last week she said that the abrupt resignation of Ukraine`s reformist economy minister, Aivaras Abromavicius, who cited government corruption, was a troubling sign.

Abromavicius quit in protest at alleged influence-peddling and state graft.

Western frustration has been fanned by the fact that Abromavicius was the fourth reform-minded minister to tender his resignation since Ukraine`s 2014 revolution broke its ties with Russia and set it on a European course.

The resignation sparked alarm among Ukraine`s Western allies and prompted President Petro Poroshenko to hold a meeting with ambassadors from the G7 countries in a bid to allay their concerns.