Ukraine gets closer to IMF deal as Rada drafts banking bill

Ukraine’s parliament, the Verkhovna Rada, voted to approve
on Mar. 30 the first reading of a bill that prevents the return of failed banks
to their former owners, or the so-called anti-Kolomoisky law. The bill was
supported by 267 MPs (226 required), including 198 MPs of the pro-presidential
People’s Servant faction (out of 248 MPs in the faction). To speed up its
approval, MPs changed the bill’s coding from #3260 (under which it was
registered in the Rada on Mar. 24 and required at least 30 days of review) to
#2571-d (whose first draft was registered on Dec. 11), as well as voted to
shorten its review ahead of a vote on its second reading from 14 to 7 days.
This will enable a vote for the bill in its final reading already next week.
The text of the approved bill has been agreed upon with the IMF,
as local media earlier reported.

Recall, IMF Managing Director Kristalina Georgieva
stated explicitly on Mar. 26 that approval of two bills, on land reform and banking, are necessary
for the IMF to initiate loan programs to support Ukraine.

Alexander Paraschiy: With the
approval of land reform and the first reading of the anti-Kolomoisky bill, Rada
has demonstrated its dedication to implementing all the prior actions demanded
by the IMF. The last remaining step to the IMF deal is the approval of bill
#2571-d in the final reading, which can happen already next week. The key risk
to this scenaroio is that MPs opposing the bill will file thousands of amendments
ahead of the second reading (With the land reform bill, the review of over
4,000 submitted amendments delayed the Rada’s vote on the bill by almost two
months, from Feb. 6 to Mar. 31).

Another risk is that Rada won’t be able to mobilize
enough votes for the final reading. However, as the voting on Mar. 30
demonstrated, President Zelensky (who is highly interested in securing an IMF
deal) has enough arguments for most of MPs of his faction to support the bill.
All this makes us optimistic about the soon approval of the anti-Kolomoisky
law. These recent developments allow us to reduce the probability of Ukraine’s
soon default from 50% to 10%.