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No soft options: IMF's ultimatum for Ukraine

Author : Yaroslav Konoshchuk

IMF Managing Director Christine Lagarde has voiced about 20 points of claims. The government must fulfill some of these obligations within two weeks
13:29, 29 January 2018

Read the original text at 112.ua.

Twitter of Svyatoslav Tsegolko

January 23, Ukrainian President Petro Poroshenko has nominated candidates for the CEC office. The updated list consists mostly of Petro Poroshenko’s faction and People's Front nominees. This is not the first list, presented by the head of state. In the summer of 2016, Poroshenko asked the Rada to replace more than a dozen commission members, but then the deputies failed to do it due to lack of the necessary number of votes.

"The West insisted on updating the Central Electoral Committee. To be frank, Poroshenko did not really want to change the composition of the commission, he said that it was necessary to completely replace the CEC, but People's Front was against it. In addition, candidates from the deputy groups were not included. The process came to the dead end, and the head of state was completely satisfied with it," sources of 112.ua explained.

Related: IMF mission can arrive in Ukraine in mid-February, - Danylyshyn

Our sources in the presidential administration blamed the Rada, noting that Poroshenko is always ready to replace the CEC members. The situation has shifted from a dead point due to the fact that candidates associated with the Radical Party faction, Revival, and People’s Will deputies’ groups appeared on the list. In addition, apparently, it was necessary to demonstrate the obedience to the West just before the start of the economic forum in Davos. It seems that this time the composition of the CEC will be updated.

Related: Ukraine expects IMF loan in April, - Poroshenko

Changing the top management of the National Bank also demonstrates significant progress. According to 112.ua sources in the coalition factions, our western partners, including the IMF, have long insisted on dismissing Valeria Gontareva. After many years of “casting,” Poroshenko has introduced the candidacy of the current Chairman of the Board of the National Bank Yakiv Smoliy. One of the creditors of our country, the EBRD, has expressed its support for the candidacy of Smoliy.

Traditional search for votes for the Central Bank candidate is ahead. According to media reports, the People's Front faction is ready to support Poroshenko's candidate on condition that it obtains the deputy’s chair. Although recently, sources in the People's Front faction, claimed that former Prime Minister Arseniy Yatsenyuk had a strong desire to take this position.

Also, among other things, the government listened to the IMF suggestion, and at the end of the session, the parliament adopted a law on privatization. However, MPs unofficially said that the initiative served the interests of Yatsenyuk.

Related: Ukraine hopes to receive next IMF tranche in May - Finance Minister

On Wednesday, President Poroshenko met with IMF Managing Director Christine Lagarde. According to our sources, familiar with the content of the meeting, the Fund has issued Poroshenko an ultimatum that he must fulfill a number of past promises and has set specific deadlines.

"Lagarde has voiced about 20 points of claims. The government must fulfill some of these obligations within two weeks," our interlocutors note. Among other things, the issue of formation of the Anti-Corruption Court was discussed. According to our sources, the IMF insists that the court forms a council of experts without any veto power from the judiciary or the executive.

Presidential administration advocates the possibility of the Supreme Qualification Commission of Judges of Ukraine to influence the appointment of judges, that is, the contender for the post of judge of the Anti-Corruption Court might appeal the negative opinion of the Council of International Experts. As our interlocutors from Presidential administration note, they are ready to discuss the appeal procedure, but they are categorically against transferring control over the appointment of the court, noting that this would lead to the loss of sovereignty.

Related: Some points of draft law on anti-corruption court contradict Kyiv’s commitments, - IMF

The tariffs issue was also touched during the negotiations. According to 112.ua sources in the Cabinet, familiar with the details of the meeting, the IMF, based on the current economic situation, insists on raising gas tariffs for the population, noting, however, that this could have been avoided.

Our sources in the Fund noted that the question of the introduction of the official land market could be postponed.

In general, according to the media reports, Poroshenko has accepted to start implementation of the "Lagarde’s points".

"He had no other choice since peak payments on external debts should be provided. Of course, it is possible to enter foreign markets and take 3-4 billion dollars, but this is not enough," our sources familiar with the details of the meeting emphasize.

Related: What would happen if Ukraine broke up with IMF?

After the meeting, Poroshenko said that in the first half of 2018 another IMF tranche might come. At the same time, 112.ua sources in the Cabinet of Ministers do not share Poroshenko’s optimism, noting that the Fund is no longer inclined to make concessions in fulfilling its obligations.

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