The focus of negotiations between Ukraine and the International Monetary Fund has shifted from a three-year EFF cooperation program to an 18-month stand-by program, said IMF spokesman Jerry Rice. “Given the unprecedented uncertainty over the economic and financial outlook and the need to focus political priorities on short-term containment and stabilization, the talks have shifted to an 18-month stand-by that could provide balance of payments support to strengthen the government’s response,” he said in a traditional briefing 7 May. According to him, the fund is in contact with the Ukrainian authorities regarding the parameters of a new financing mechanism that would help the country to effectively counteract the pandemic in the economy and medicine.
The size of the new program is still unknown. Currently, the virtual mission is discussing the parameters of this deal, despite the fact that a preliminary agreement was reached on the EFF program in December 2019 at the level of the fund’s management. Stand-by arrangements provide fewer conditions for implementation and allow more flexibility for countries facing an economic crisis, Reuters reported.
“When the situation recovers, the focus may again shift to addressing the challenges of long-term structural reforms in Ukraine to foster stronger and stronger personal growth,” said a fund representative. The Ukrainian authorities and the IMF management in December 2019 tentatively agreed to open a new three-year EFF program for $ 5.5 billion. In order for the decision on the new program to be approved by the Fund’s Board of Directors, Ukraine must also adopt a law aimed at improving the system for resolving banking problems and land reform (“anti-Kolomoisky law”). This bill has already been adopted in the first reading, but MPs, including those from the Servant of the People party of President Zelenskiy, submitted more than 16 thousand amendments to it, which could block its adoption.
After the application of the legislative mechanism, which makes it possible to consider such a number of amendments expeditiously, about 30 amendments remained pending consideration.