New finance minister meets IMF representative to Ukraine

Ukraine’s cooperation with the IMF is an absolute
priority, Ihor Umansky, new finance minister, told Goesta Ljungman, the IMF resident representative to Ukraine, during a March
6 official meeting, MinFin said the same day. Umansky assured the IMF the
government will continue to work jointly to reach agreement on a new IMF loan
program.

Recall, the IMF and Ukraine agreed at the staff level
to a new EFF program worth USD 5.5 bln in December.
But to start the program, Ukraine needs to implement some agreed-upon prior
actions, which the parties have not publicized. Among them, as hinted by the
government, is the adoption of a law that will prohibit the return of failed
banks to their former owners (the so-called anti-Kolomoisky bill).

Alexander Paraschiy: Given the
recent turmoil on the global markets, IMF cooperation is becoming increasingly
important for Ukraine to secure debt sustainability. The March 6 statement is a
positive message that the new cabinet is staying on the same course as the
previous one, and that cooperation with the fund is essential. However, as
before, little depends on the government, as implementing the key precondition
to resume cooperation is the task of the parliament.

On a positive note, parliament has sped up the pace on
voting for 4,018 amendments to the bill launching the farmland market, with
only 720 amendments left as of March 6. This suggests the parliament will be
able to adopt the bill as early as next week (not by mid-April, as was expected before). This would
create an opportunity for parliament to vote for IMF-required legislation
already in March, vs. our previous expectation for late April. So  there
is a chance for the government to get an IMF deal already in April. The key
question now is whether Ukraine and the IMF are able to agree soon on the
conditions of the anti-Kolomoisky bill.