“The new program aims to help Ukraine to cope with COVID-19 pandemic challenges by providing balance of payments and budget support, while safeguarding achievements to date and advancing a small set of key structural reforms, to ensure that Ukraine is well-poised to return to growth when the crisis ends”, reads the statement issued by the press service of the Fund.
The first tranche of 2.1 billion dollars will come to Ukraine in the nearest future. Ukraine will get the rest of the arrangement in four instalments over the period of 18 months. This information has been confirmed by President Volodymyr Zelenskyy. “The first tranche will amount to 2.1 billion dollars which is 200 million more than it’s been expected”, said the President.
The Executive Board of the Fund also discussed the ex-post evaluation of exceptional access under Ukraine’s 2015 extended arrangement under the Extended Fund Facility (EFF), which concluded that the extended arrangement helped restore macroeconomic stability and growth but did not fully address Ukraine’s underlying balance of payments vulnerabilities.
As it was noted in the Fund’s statement, Ukraine needs additional reforms to ensure economic growth amid the outbreak of COVID-19 pandemic “which has significantly worsened the outlook and has refocused government policies on containment and stabilization”.
According to Finance Minister Serhiy Marchenko, talks with the Fund were long and difficult. Ukraine honoured all commitments she had assumed. For instance, the Ukrainian legislature passed two important laws “On the Budget of 2020” and “On Preventing Money Laundering” as well as improved the banking legislation. In its turn, the Fund expressed its readiness to transfer the promised finances.
The point is that cooperation with the IMF has a strategic importance for Ukraine especially amid the current world economic downturn. As finance experts claim, the new Stand-By Arrangement will make it possible for the Ukrainian Government to finance the deficit of the State budget which will be felt by all Ukrainian citizens as the Government will be able to pay regularly wages and salaries, pensions, additional payments to medical doctors and provide support for socially vulnerable Ukrainians.
Thanks to the new Stand-By Arrangement, considerable finances will be directed to deal effectively with the coronavirus infection, support the national healthcare system, small and medium businesses.
In the words of Finance Minister Marchenko, the IMF’s program of financial support will help focus on the reform of the customs and the State tax administration as well as strengthen the “immunity” of the Ukrainian banking system. The new cooperation program will help address such large financial needs as anticorruption policies, the prevention of money laundering and financing terrorism.
It should be specially mentioned wide opportunities that the Fund-supported program opens before Ukraine with regard to receiving support from other international financial partners. Thus, Ukraine expects to get one billion dollars from the World Bank and 1.7 billion euroes of macro-financial aid from the European Union.
The newspaper Holos Ukrainy