You're reading: Azarov: Ukraine ready to borrow internationally, not ready to concede to IMF demands

Prime Minister Mykola Azarov says Ukraine will not concede to tough demands of the International Monetary Fund to hike gas tariffs for all of the population and is looking to borrow at international markets to finance the outstanding payments.

Ukraine is to pay over $9 billion in
foreign debt this year, most of it to the IMF. But Azarov says
that the nation has no “desperate need” for IMF cash.

“We are not prepared, in the the
condition of low salaries and pensions, to significantly hike tariffs
for gas for the population,” Azarov said. He also said the
government is prepared to compromise on other issues: “If for
the International Monetary Fund the key thing is the deficit of the
budget, the monetary indicators and the deficit of Naftogaz, we will
find common ground immediately.”

Ukraine’s projected budget deficit is
3.2 percent of the gross domestic product, a growth forecast of 3.4
percent on the year in 2013. But analysts say that both indicators
are overly optimistic.

The IMF mission will work in Ukraine
between Jan. 29 and Feb. 12. The government is hoping for a new
stand-by loan program, and is currently preparing its
counter-proposals, Azarov said. He said the essence of these
proposals is down to “a differential approach” in hiking the gas
prices for the population, a key demand of the IMF. He said the
government is ready to consider hikes “for those who have European
salaries,” but not for low income groups of the population.

“As far as hiking the price for the
whole population goes, in the volume they [IMF officials] have indicated, we
cannot agree to that,” Azarov said. “If the situation was
desperate, we would probably say ‘ok, we will agree to your
conditions.’” He also said this was the case in 2010, soon after
his government was appointed after the election of Viktor Yanukovych
as president.

Azarov said Ukraine is looking at other
sources of financing outside the IMF, particularly, at borrowing on
foreign markets. “Currently, the financial market is extremely
favorable for borrowing,” Azarov said. “We will find the money,
and have no doubts about it.”

He indicated that Ukraine is likely to
borrow in late January or February. He also said that First Deputy
Prime Minister Serhiy Arbuzov is currently in New York “negotiating
with investors.”

“There is a deficit of resources for
those who are overburdened with debts, who have no trust,” Azarov said.

Kyiv Post editor Katya Gorchinskaya can be reached at [email protected].