France, EU back strict conditionality on Ukraine's IMF loan

France’s European Affairs Minister Pierre Lellouche said yesterday that France and other EU countries including the U.K. backed “strict conditionality” on the International Monetary Fund’s allocation of a new loan tranche to Ukraine. Lellouche said requirements must be met due to the disappointment over the inability to enact reforms. In an interview with Bloomberg TV later in the day, Ukraine’s Foreign Minister Petro Poroshenko said that an IMF mission could return to Ukraine by the end of the year and that the transfer of the next tranche might be “possible” in December. Brad Wells: The IMF and EU have made it clear that additional loan funds depend on consensus among Ukrainian politicians. Talks between representatives of the Cabinet of Ministers, Presidential Secretariat and National Bank designed to restart work with the IMF last week ended without result. With the major domestic players in full campaign mode and prone not to capitulate to external demands, agreement has so far proved impossible, and, contrary to what Poroshenko’s comments imply, will be exceedingly difficult, in our view. See our report of November 10 for our look at the implications of not receiving the IMF tranche this year.