Ukraine’s new government releases agenda, waits an IMF mission

Prime-Minister Aresniy Yatseniuk presented the new Cabinet of Ministers agenda on Feb. 28. The brief document focused on Euro-integration, fiscal consolidation, improving the business environment and energy sector reform. It declares the intention to resume IMF cooperation (including its demand to increase gas tariffs and cut corruption in the natural gas industry), sign the Ukraine-EU Association Agreement and start demonopolizing parts of the economy.

An IMF mission will arrive in Kyiv next week, newly elected Finance Minister Oleksandr Shlapak reported on February 27. The Cabinet of Ministers will apply for at least USD 15 bln in support from the Fund.

Alexander Paraschiy: The agenda contains positive themes and outlines all the necessary measures to transform Ukraine into a prosperous economy. In fact, it repeats many points that were declared by several previous Cabinets, including reform program of former President Viktor Yanukovych. For many years, it has been crystal clear what has to be done to start growing the economy but short-term political goals and rampant corruption prevented leaders from taking radical steps. The new government fulfilling even a small part of the reforms would be a breakthrough in Ukrainian politics.

To help matters, we are quite optimistic about the IMF mission’s results. The Cabinet has declared its readiness for painful reforms in its program. Moreover, we anticipate the Fund will be ready to give advances to the new government. The first wire from the Fund should arrive in the first half of March.