You're reading: Finance Ministry: First tranche from IMF is expected to arrive in April

 The active talks with the mission of the International Monetary Fund (IMF) and the work of the Ukrainian government on the reduction of state expenses could allow a first tranche of funds under the IMF's program with Ukraine to arrive in April 2014, Finance Minister Oleksandr Shlapak said at a briefing in Kyiv on Monday.

“The decision making by the Ukrainian parliament [on amendments to
the national budget] is the start of the countdown for the meeting of
the [IMF] Board… I hope that the decision will be made by the IMF in
April and in April a first tranche of financial aid will arrive,” he
said.

The minister said that the parliament is to pass the reduction of
expenses of the national budget before the IMF provides the funds.
Assessing the reduction of the expenses, he said that the hidden budget
deficit amounts to some Hr 50 billion: it will be proposed that the
parliament will reduce current, capital and social expense by the said
sum.

“We’re preparing proposals for a large reduction of expenses in the social area,” Shlapak said.

“The previous governments permanently deceived people – this was made
under the political pressure and deliberately… Absolutely unreal social
standards were approved, which didn’t take into account the financial
situation,” he said, explaining the current situation.

He said that since 2004, social expenses have been increased
groundlessly, and in 2014 91.2% of the budget expenses were expenses on
protected budget articles.

He said that central authorities cultivated consumption moods and
paternalism. This has resulted in distortions in the economy, which led
to protracted stagnation: over the past several years the country has
been able to function only thanks to boosting state debt.

He said that Ukraine’s macroeconomic indicators were set too high, amid total corruption.

The minister said that the government has not finally decided on the issue of the scale of the reduction of social expenses.

He also said that the attraction of funds from the IMF would be a
signal for international investors, who will be able to resume
investments in the country’s economy. He said that new authorities would
be able to attract near $20 billion into the Ukrainian economy if they
were able to prove their ability to efficiently manage state finances.

The minister also said that today the government finances all
protected expenses of the national budget on time: payment of wages,
pensions, subsidies to the regions and payments for energy and state
debt.

A shortage of resources is preventing the cabinet from financing many
current and capital expenses, in particular, the government will not
buy PCs, cars and mobile phones.

He said that the government has sufficient ability to control the
financial situation in the country, but under the condition of the
realization of radical changes aimed at fighting corruption and
populism.

Shlapak said that the amendments to the national budget for 2014 will be sent to the parliament within two or three weeks.

He said that schemes of capital erosion from the national budget, in
particular, via the state procurement tenders, would be liquidated.

“We want to return common sense to the Ukrainian economy,” the minister said.

He said that the realization of the conceived plans will restore the
health of the system and will allow the creation of new jobs next year
and the resumption of the inflow of capital investment.

“We’ll start fighting from the head, from the central executive power
agencies. I want to assure you that the government will not make any
decision that will smell of lobbying or corrupt schemes,” Shlapak said.

He also said that Prosecutor General’s Office is investigating
evidence of state fund embezzlement using VAT refunding and tax abuses
on the alcohol and fuel markets.

“We’re resolute in finding everyone who was involved in the schemes.
Those who are guilty of the embezzlement of budget funds will be
punished,” he said.

Shlapak said that the whole society should support this for efficient
fighting corruption: Ukrainians should stop giving bribes, and the
government will publish bribers and remove the pro-corruption
conditions.

The finance minister said that it is not planned to introduce any tax
vacation, as business will receive large support when the system of
bribes and corruption schemes is eliminated.

As for the prospects of returning to Ukraine the illegally
accumulated funds of ex Ukrainian President Viktor Yanukovych, who fled
to Russia, Shlapak hopes that investigation agencies will work
efficiently.

“I hope that in this case everything will work quicker,” he said,
noting that the work on returning of funds of ex premier Pavlo Lazarenko
has been going on for 20 years.