Zelensky makes call with IMF head, mission to arrive in September
President Volodymyr Zelensky had a phone conversation with Managing Director of the International Monetary Fund (IMF) Kristalina Georgieva on July 28, both sides reported the same day. The parties discussed the progress in the implementation of the current Stand-By program, and specifically the terms and conditions for the next IMF tranche.
They discussed bills to strengthen banking governance and to push judiciary reform, as well as draft bills on the National Bank and the National Anticorruption Bureau, Zelensky’s press service reported. Zelensky assured the IMF head that he “keeps the implementation of the judicial reform under personal control and makes every effort to implement it successfully”. Agreements were reached on intensifying the joint work, according to the president's press release.
In the IMF's tweet, Georgieva termed the call “very constructive” and named Ukraine’s progress under the IMF program “sound.” At the same time, she clearly stated that there are remaining issues on which the IMF mission will work with the Ukrainian side in September.
Neither side specified what the remaining issues are. Recall, two weeks ago, an IMF spokesman listed, among other issues, the need to strengthen the governance of the National Bank, judiciary reform and further anti-corruption issues, and legal changes on the enhancement of bank supervision and resolution.
Alexander Paraschiy: The call between Zelensky and Georgieva is the only tangible achievement in Ukraine’s talks with the IMF and a clear indicator that Ukraine failed to meet its commitments to the fund, so far. The IMF mission in September gives little chance for Ukraine to get any tranche from the fund by the time the state budget for 2022 is voted on, which is no earlier than late November. By that time, unfortunately, Ukraine can take too many steps and get even further from its commitments to the IMF, as the experience of the autumn of 2020 suggests.
That said, it looks increasingly unlikely that Ukraine will be able to get any tranche under the on-going SBA program (which terminates in December). For Ukraine’s image in the West, this is not good news. However, for Ukraine’s public finances, this is not a big problem, as Ukraine counts on receiving about USD 2.9 bln from the IMF in the form of SDR allocation in the coming months.