Ukrainian presidential frontrunner Victor Yanukovych on Jan. 27 signalled he would try to review a $16.4 billion bailout programme with the IMF if elected president, saying he backed wage rises that the fund opposed.
Ukraine’s parliament passed a law late last year that raised the minimum wage and pensions, breaching promises to control budget spending. The fund suspended its programme as a result.
The presidential election run-off against rival Yulia Tymoshenko will be held on Feb. 7.
"Social standards must reflect the real situation of life in the country. The authorities must protect the vulnerable in the population. These are first of all pensioners, the disabled, orphans and large families," he said.
"This is what we demanded and approved accordingly by law, which must be implemented," Yanukovych told a small group of foreign journalists.
The IMF has said the wages bill could cost Ukraine as much as 7 percent of its gross domestic product. But by insisting that the wages raises must go through, Yanukovych is indicating that the programme must be renegotiated with the fund.
"We will define a programme with the IMF that will suit the IMF and Ukraine and we will create relations that are transparent and comprehensible to the Ukrainian society and which will be supported by the Ukrainian parliament," he said.
It disbursed $10.5 billion of a $16.4 billion programme by last November before deciding against giving a further $3.8 billion. Its programme, while supporting Ukraine’s finances and central bank reserves, were on conditions on budget austerity.
Analysts and observers have said Ukraine would find it tough to survive long without further help from the IMF. But the fund wants to restart talks with the former Soviet state once the political ruckus from the election on Feb. 7 is over.
