Ukrainian Cabinet to sign memorandum with IMF after Feb. 16

The Ukrainian Cabinet of Ministers will not finalize an updated memorandum on cooperation with the IMF until after the prime minister’s report to the parliament, scheduled for Feb. 16, Interfax-Ukraine reported on Feb. 11, citing its own source in the government. According to the source, the Cabinet is anticipating guarantees that it won’t be dismissed by parliament on Feb. 16. Only with such a guarantee in hand will the government sign the memorandum.

Alexander Paraschiy: The memorandum will open the door for the next IMF tranche, worth USD 1.7 bln, as well as other loans from western governments to Ukraine worth about USD 2.0 bln. These loans are critically important for Ukraine to secure its currency and financial stability in the short-term. Importantly, in its press release on Feb. 10, Ukraine’s central bank stressed that “further delay in cooperation with the IMF could bear negative consequences for the financial stability of Ukraine and for the welfare of its citizens”.

Such messages from the government and central bank are another point of pressure on the parliament – in case lawmakers decide to dismiss Cabinet, or fail to agree on their reform-oriented demands (as prompted by ministers Abromavicius, Pyvovarskiy and Jaresko), Ukraine won’t receive the international loans any time soon. That means the chances are increasing that parliament won’t dare to ignore the Cabinet’s demands, and will approve its action plan next week.