IMF welcomes adoption of banking bill draft, expects budget and final banking law

6 April 2020

The IMF welcomes the initial adoption of legislation to strengthen the bank resolution framework by the Rada and looks forward to its final approval, the Reuters news agency reported on Apr. 4, citing Goesta Ljungman, the IMF’s representative to Ukraine. The IMF also looks forward to the adoption of a revised state budget for 2020 “that will help the authorities to confront the tremendous challenges caused by COVID-19,” Ljungman said. He added that “the IMF encouraged the Ukrainian authorities to work with the World Bank to ensure the creation of an efficient, transparent and competitive land market”.

 

Recall, Ukraine’s parliament adopted on Mar. 30 the first reading of a banking sector bill that, among other provisions, prevents the return of failed banks to their former owners (the so-called anti-Kolomoisky bill). Its approval is among the key demands to initiate a new EFF program with Ukraine worth about USD 8 bln.

 

Meanwhile, MPs have submitted almost 6,000 proposals to amend the anti-Kolomoisky bill before its second reading, as of mid-April 6, said MP Yaroslav Zhelezniak, member of Rada’s finance committee. He estimated that total amendments could reach 8,000-8,500 by the deadline of Apr. 6.

 

Alexander Paraschiy: From Ljungman’s statement, we conclude that the two remaining issues ahead of the IMF deal are the adoption of state budget amendments and final approval of the anti-Kolomoisky law. While the state budget could be amended this week, there is little clarity about timing of the latter bill. Recall, the land reform law, which was bombarded with 4,018 amendments for the second reading, was out to a vote after 11 session days of review. If the anti-Kolomoisky bill reaches a vote at the same rate, parliament could need more than 20 sessions for its approval. In this way, Ukraine is not likely to implement the IMF’s To Do list by mid-May. So far, we remain optimistic about the IMF deal, as well as expect that parliament will do something to approve it as soon as possible.

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