Money would not be? The results of the negotiations with the IMF

Денег не будет? Итоги переговоров с МВФ

Ukraine would receive a new tranche from the IMF, the mission of the Foundation left, and news about money is not everything.

In the spring of 2019 coming to the end of the program of cooperation of Ukraine with the IMF. Of the agreed $ 17 billion aid Ukraine has received only about 8.5.

There were hopes of obtaining at least $ 1.8 billion before the end of the year, but they seem to be stuck. The IMF mission was in Ukraine from 6 to 19 September, but by the end of his visit not announced the disbursement of a tranche.

As negotiations were under way

One of the requirements of the IMF to bring gas prices for households to market levels. In the IMF believe that the price of gas for citizens should be the same as for the industry. Gas for domestic consumers should cost the same as imported, in order to make it profitable to produce domestically.

Have the IMF and the demands of a different kind. Such as the reduction of the budget, its expenditures, the undesirable increase in the salaries of civil servants, minimum wage, pensions, etc.

It was assumed that the government is ready to make concessions. Because if Ukraine will not receive a credit, the economic consequences will be dire, will begin a protracted economic crisis.

What happened?

The negotiations of the Ukrainian authorities with the IMF mission did not bring the expected result, reported yesterday in the news Agency Ukrainian news. According to journalists, the IMF has put forward a new condition, and refuses to allocate money to the Parliament the state budget for the year 2019. The Parliament usually adopts the budget in December. Thus, the receipt of funds to the IMF before the end of the year is almost unbelievable.

In the process of negotiations representatives of the IMF mission demanded on the adoption of the state budget of Ukraine prior to the preparation of the Memorandum and issue it to the consideration of the Board of Directors. That is, first the budget and then money. Such a condition, as confirmed by Agency sources familiar with the process of preparing for negotiations, not pre-nominated. However the interviewee said that the IMF is really planning to obtain some guarantees from the government that the draft budget submitted to the Parliament in the first reading will not undergo significant changes prior to adoption in General. The requirement of the IMF for the government came as a surprise. Is it expected that the budget issue will become relevant in December, during the negotiations about getting the second tranche – this is the plan the government was originally.

However, the IMF failed to take any safeguards decided not to believe in the word and to demand concrete solutions.

An official statement

The Memorandum of understanding regarding a new funding program is not signed.

Permanent representative of the International monetary Fund in Ukraine Jost Longman made a statement on the results of the mission’s visit to Ukraine.

“In the last two weeks the IMF mission had constructive discussions with the Ukrainian authorities on the policies and reforms aimed at achieving macroeconomic stability and growth, as well as possible financial assistance from the Fund to support such activities. Those discussions continue,” he said.

In the evening the head of the communications Department of the IMF Jerry rice said that the IMF will continue talks with the Ukrainian government on promoting the reform and possible financial support after the work of the IMF mission in Kiev.

“I have no information about the talks, which still continue,” he said.

What’s next?

Meeting Petro Poroshenko with the leadership of the IMF may go next week during his visit to the United States.

“The mission does not accept the final decision. After a visit to Ukraine she about two weeks to work with documents, then bring them to the meeting of the Board of Directors of the IMF and only then will we know the verdict. But we can already say – in the autumn the IMF does not require the adopted budget nor Ukraine, nor in other countries with which it negotiates. Such a requirement may occur only closer to winter. In September, enough of the draft budget, and the IMF got it,” explained economist Oleg Ustenko.

While Ustenko sure that the money Ukraine will do.

“According to the conventions of the post-war Bretton woods conference, the international monetary Fund is an organization that aims to preserve financial stability and to help countries find themselves in a difficult situation. Therefore, it can be considered the first motive. It is the mission of the IMF,” – said Ustenko.