US envoy meets Poroshenko as concerns for Ukraine grow

 Washington's UN ambassador met Wednesday with Ukraine's President Petro Poroshenko at a time of renewed hostilities with pro-Russian fighters and fears the Western-backed state was hurtling towards an imminent debt default, AFP reports.

Samantha Power's show of support for Poroshenko's embattled team will also see her speak to Foreign Minister Pavlo Klimkin and senior cabinet members. The avowed critic of Russia and promoter of the ex-Soviet state's budding alliance with Europe has scheduled a public appearance in Kiev for Thursday.

Power's visit comes one year into a presidency Poroshenko has used to try and wipe out more than two decades of crippling corruption and anaemic economic performance that left successive administrations reliant on Russian help.

But his efforts have been both stuttering and increasingly unpopular. The 14-month war against eastern insurgents has waxed and waned depending on both sides' abidance by a series of broad truce and political dialogue deals.

The latest ceasefire forged with France and Germany's help in February threatened to rupture last week as barrages of artillery and rocket fire killed around 30 people living in towns straddling the twisting -- and hotly disputed -- line separating the two foes.

The violence has since subsided and appears to have returned to past levels of sporadic shelling that kill people on a daily basis in a conflict the United Nations estimates has already claimed nearly 6,500 lives.

"Right now, we are taking steps to make the situation along the line of contact -- as well as around it -- more secure," his office quoted Poroshenko as telling Power during the closed-door talks.

 Debt debate 

Voter displeasure at the seemingly perpetual separatist conflict is being compounded by basic economic concerns.

The inflation rate has soared to more than 60 percent while government assistance -- to everyone from pensioners to war veterans and students -- has been slashed under the advice of an IMF team overseeing Ukraine's long-term recovery plan.

The International Monetary Fund has been holding back loans it earmarked in a $17.5-billion rescue due to Kiev's failure to agree debt restructuring terms with its private lenders or plug holes in its cash-draining state energy firm.

Ukrainian Finance Minister Natalie Jaresko warned Friday that Kiev may be forced to stop servicing its commercial loans within a matter of weeks.

The explicit nature of the threat seemed to rattle the fund.

Its senior managers had until then argued that such a technical default would complicate the approval of the next $1.7-billion (1.5-billion-euro) tranche when the IMF board meets later this month.

But its second in command signalled Tuesday that Kiev could still get the money without a debt deal.

"We have a policy of lending into arrears which allows us to continue lending to a member state when it has arrears with private creditors," said First Deputy Managing Director David Lipton in Washington.

  UN peacekeepers 

Political analysts view Power as one of US President Barack Obama's diplomatic attack dogs on Russia whose heated exchanges at the United Nations with her Moscow colleague have been pilloried and satirised on Kremlin-run TV.

"Let us pull the veil away from (Russian President Vladimir) Putin's peace plan and call it for what it is -- a Russian occupation plan," she told the UN Security Council in January.

Power has since strongly defended the waves of sanctions that Washington and Brussels adopted in the wake of Putin's annexation of Crimea and alleged military intervention in Ukraine's industrial southeast.

Yet Ukrainian leaders are keenly aware that past financial and other sanctions against Russia appear to have done little to alter Putin's stance.

A threat by G7 leaders Monday to toughen restrictions against Moscow drew an acerbic response from Putin's powerful administration chief.

"It is perfectly logical to assume that Russia will extend its own sanctions," Interfax quoted Sergei Ivanov as saying.

Kiev analysts said Poroshenko might try yet again to convince Power that Washington should back the deployment of UN peacekeepers in the war zone -- a step rejected by Russia and looked upon sceptically by the West.