Ukraine To Know Fate Of IMF Bailout By End Of The Month
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The Ukrainian government on Wednesday sent a formal request for up to $18 billion in loans to the IMF, said Prime Minister Arseniy Yatseniuk, with the cash necessary to stabilize Kiev’s financial situation and keep the struggling economy afloat.
On March 27, the IMF mission in Kiev had given preliminary approval for a loan of $14-18 billion, but with tough conditions attached.
The Ukrainian government on Wednesday sent a formal request for up to $18 billion in loans to the IMF, said Prime Minister Arseniy Yatseniuk, with the cash necessary to stabilize Kiev’s financial situation and keep the struggling economy afloat.
On March 27, the IMF mission in Kiev had given preliminary approval for a loan of $14-18 billion, but with tough conditions attached.
The IMF’s executive board is expected to meet on April 30 to determine if Kiev has met the preconditions for the loan, while they are also likely to spell further required reforms, particularly in the energy and financial sectors.
An IMF loan would clear the way for additional aid from the European Union, the U.S. and other donors, with the total international loan package expected to reach up to $27 billion.
Ukraine, whose finances are on the brink of collapse, needs the IMF loan to pay its foreign debts, implement reforms and stabilize the rate of the local currency, the hryvnya.
But although Western leaders want the IMF deal to be done as soon as possible to help shore up the new government’s power, they also want to ensure that Ukraine doesn’t repeat the economic and political missteps of the past that helped lead to the current economic turmoil. Since 2008, Ukraine has twice had to abandon IMF bailouts after failing to finish agreed economic restructuring.
When asked on the progress of Ukraine’s reforms, Reza Moghadam, the head of the European department, said at an April 11 press conference that there was still “work to do in terms of finalizing some of the actions and ensuring the program is financed.”
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Paulo Nogueira Batista, who represents Brazil and 10 other countries on the IMF executive board, however admitted that Ukraine’s situation was unique.
“Normally what we assess is the sustainability of the debt…[but] what’s in doubt here is the sustainability of the political situation,” he told Bloomberg.
[quote]“There’s a concern – that the worsening political situation in Ukraine may hamper the success of the program,” he said.[/quote]
