Ukraine and the International Monetary Fund (IMF) have managed to reach a compromise on most provisions of the memorandum on the economic and financial policies of the government, which is being drawn up as part of the next review of the cooperation program with the IMF, the press service of the Ukrainian government reported with reference to Prime Minister Mykola Azarov.
"I think we have made significant progress in the negotiations and taken a great step forward in the past few days. We have reached agreement on almost all of the issues that we had," the press service quoted Chief of IMF mission to Ukraine Thanos Arvanitis as saying at a final meeting with the Ukrainian premier in Kyiv on Monday.
Representing Ukraine at the meeting were Finance Minister Fedir Yaroshenko, First Deputy Labor and Social Policy Minister Vasyl Nadraha, Naftogaz Ukrainy CEO Yevhen Bakulin, Head of the State Tax Service Vitaliy Zakharchenko and Deputy Governor of the National Bank of Ukraine Ihor Sorkin.
A source familiar with the course of negotiations told Interfax-Ukraine that the participants in the meeting had summed up the results of the work of the mission, which, due to a number of issues that had yet to be agreed, had extended its visit for several days.
The source said that the most controversial topics were the dates for conducting pension reform and increasing the tariffs for natural gas, electricity and hot water supplies.
The Ukrainian side insists on the need to change the previously announced schedule.
The mission is expected to make a statement on the results of its work late on Monday or on Tuesday, although the fund has not issued an official report in this regard.
Visiting representatives of the IMF understand the Ukrainian government’s arguments about the need to increase gas prices for households step-by-step, and gradually implement pension reform, Azarov has said.
"They regarded with understanding my arguments in favor of… a step-by-step increase in the tariffs [for gas for the population], and a gradual introduction and implementation of pension reform," the prime minister told journalists.
At the same time Azarov noted that the IMF experts had praised the government’s activities in raising revenues for the budget and implementing the memorandum of cooperation in 2010 and early 2011.
The IMF mission in Ukraine earlier planned to work in Kyiv from February 1 to February 11. Its work should result in a decision on the possible allocation of the next tranche of a loan to Ukraine.
The IMF decided to renew its loan partnership with Ukraine in the summer of 2010 through a new stand-by program. The approved stand-by program for Ukraine is 10 billion in special drawing rights (SDR, around $15.6 billion), which is the IMF’s third biggest assistance program following those for Greece and Romania.
In late July 2010, Kyiv received the first tranche coming to SDR 1.25 billion. The IMF decided in December to allocate a second tranche worth SDR 1 billion.
The program foresees the future quarterly allocation of tranches each worth SDR 1 billion with the exception of the last tranche, which will be worth SDR 750 million.
