Former governor of the National Bank of Ukraine Valeria Gontareva called out the Secret Service of Ukraine on July 8.
Earlier that day, the state law enforcement agency — known as the SBU — wrote on Facebook that her call to freeze international help over the controversial resignation of her successor, former NBU governor Yakiv Smolii, was “inadmissible.”
Without naming her, the SBU wrote that ex-officials should refrain from comments “that could harm the country’s national security” and “negatively affect the situation in the country.”
“It is worse than Putinism,” Gontareva reportedly said to Ukrainian media outlet Novoe Vremya on July 8.
Hot-button interview
This is the latest chapter of a face-off between Gontareva and the SBU, after a hot-button interview she gave to finance outlet Central Banking, on July 6.
In this interview, she said the International Monetary Fund should stop payments to Ukraine unless President Volodymyr Zelensky appoints an independent governor, who could safeguard reform. The fund should even consider demanding the repayment of previous tranches, she said, adding Zelensky “fooled the IMF.”
“They waited until they had the first tranche of IMF aid and then they put more pressure on Smolii,” she said, referring to the $2.1 billion that Ukraine’s government received in June.
During her time as NBU governor from 2014 to 2017, Ukraine had already received several billion dollars of IMF aid.
On May 22, the IMF announced it had approved a loan package worth $5 billion over the next 18 months, but it may decline to release the further $2.9 billion if it believes the government is not supporting reform.
Under pressure
Gontareva also criticized Zelensky’s team for allegedly pushing her successor Smolii to submit his resignation on July 1, a decision voted by 286 MPs of the Verkhovna Rada on July 3.
“The pressure had become unbearable,” she said.
In an interview with LB.ua, published on July 6 too, Smolii shared details about the political pressure that he says made him resign on July 1.
“I asked (Zelensky) whether he wants me to resign, and he said ‘yes,’” Smolii said.
He said Zelensky’s team regularly abused its authority by making demands of the National Bank, undermining its independence. Among them was a demand to lower the bank’s policy rate and stop curbing the inflation of hryvnia.
“They wanted to discredit the National Bank’s leadership and replace it with people who could be controlled,” Smolii said.
He also said he suffered from a smear media campaign against him, led by the TV channel belonging to oligarch Ihor Kolomoisky and his allies in parliament.
Gontareva said it was the major reason, and she knows what Smolii was up against.
Kolomoisky’s shadow
Smolii and her faced major pressure when they were governors of the central bank.
Gontareva notably accused Kolomoisky of being behind the burning down of her house and an armed raid on her Kyiv flat.
Kolomoisky has been fighting the NBU and Cabinet of Ministers over the nationalization of the bank he previously co-owned, PrivatBank.
It had to be nationalized in 2016 after auditors found a $5.5-billion hole in its balance sheet — allegedly embezzled through insider lending — and the government feared the possible collapse of the country’s largest bank could undercut Ukraine’s entire economy. The state took over PrivatBank, the nation’s largest, in December 2016
However, the consequences of Smolii’s July 1 resignation as governor of the National Bank caused an uproar among investors.
On June 2, the Ukrainian hryvnia dropped 1.3% (to nearly Hr 27/$1), Ukraine postponed a $1.75 billion Eurobond sale and the business community strongly criticized the circumstances of his departure.
When he resigned, Smolii said his resignation was a warning.
“I want my resignation to be a warning against further attempts to undermine the institutional grounds of central bank in Ukraine,” Smolii said.
