IMF expected to approve Ukraine loan deal

It sounded rehearsed. Ukraine abides to the truce agreed in Minsk on February 12, while the rebels only pretend to withdraw their heavy weapons, Foreign Minister Pavlo Klimkin said as he stood rigidly in front of Kyiv's presidential administration building.

His remarks came on the heels of the first meeting of Ukraine's military Cabinet, set up to decide what President Petro Poroshenko had previously declared in an interview: The truce will hold, somehow.

Earlier this week, monitors from the Organization for Security and Co-operation in Europe had declared that both sides were keeping them from doing their job. So they can't say, without a doubt, that the heavy weapons have in fact been withdrawn from the front line, as agreed in Minsk.

Loans on the horizon

That doesn't really matter. At the moment, it's all about evaluating the mood - not in the war zone, but on the markets.

Far away from the drama in the Donbas region, the International Monetary Fund (IMF) will meet on Wednesday to discuss a four-year Ukraine plan, and whether Ukraine in its present form has a future at all. The IMF is set to approve a new aid package worth $17.5 billion (16.1 billion euros).

Ukraine's US-born finance minister, Natalie Jaresko, said that the IMF had suggested that loans could flow this year. It's all about achieving rapid "microeconomic stability," she wrote on Twitter. An IMF loan would prove crucial to fresh private capital in Ukraine. Since January, Jaresko has been giving interviews mainly to the US media; it appears she doesn't care much for the European media, at least not on the continent. London, Washington, New York - that is the Finance Minister's travel route next week. Europe would shoulder the largest share of the IMF loan.

Christine Lagarde warns

Perhaps it's just evidence of the narrow wiggle room she has, and that is counted in days.

Should the truce in the east break before the money can even start to come in, everything will have been in vain. No one sinks his money into a country at war.

"The success of financial support for Kiev depends on how stable the situation is in eastern Ukraine," IMF chief Christine Lagarde said last week, adding that Russia could hardly be interested in the collapse of Ukraine, as it would spell an end to Russian loans there, as well as the country's many banks with Russian shareholders.

Wary of the truce

Russian capital is already trapped in Ukraine. Bank payments have been strictly regulated for almost a year now. Investors can't get at their fixed-term deposits. The exchange rate for Ukraine's currency, the hryvnia, is stable at the moment at 25 hryvnia for 1 euro, and 23 to the dollar. But whether this changes fully depends on the many promised reforms, none of which is visible in everyday life in Kyiv.

Nothing but the weather has changed: blue skies, sunshine and people out and about in downtown Kyiv since the weekend. Street musicians have emerged from the long winter months in the subway, performing once again out in the open along the city's main Khreshtshatyk shopping street. Spring has arrived as usual, as if there were no war in the East.

Appearances are deceptive, though. Reports from Donetsk say the rebels are in training and everything should be ready "by March 20 or March 25." No one knows what this is about exactly.

But it's enough to shatter the little trust people have in the ceasefire.

The government-held southeastern port of Mariupol could be the rebels' next target, or maybe Charkiv in the northeast, Ukraine's second-largest city. Beneath the calm surface, there is no trust, and everything hangs in the balance for today's Ukraine.