Crashed: How a Decade of Financial Crises Changed the World

by Adam Tooze

eastern Ukraine. The IMF had never previously lent to a country at war. So in putting together the April 2014 package, the Fund simply ignored the evidence of the escalating conflict. As Lagarde admitted in a press statement, this put the entire program in jeopardy from the start.59 Within days of the conclusion of the financial package it became clear that Ukraine did indeed face the worst-case scenario. Rather than calming, the conflict in eastern Ukraine intensified.60 In early May, scrambling to raise an army, Kiev was forced to reintroduce conscription. As the oligarch Petro Poroshenko took office as Ukraine’s president in the last week of May 2014, he faced the impossible challenge of implementing an IMF austerity program while fighting a war; a war, moreover, that Russia would not let Ukraine win. Kiev’s only hope was that while military escalation placed ever greater stress on Ukraine’s fragile economy, it would also clarify the political stakes of the conflict and suck in the West.