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.