February 11, 2016

02/10/2016 Ukraine: Daily Highlights - IMF Managing Director Lagarde threatened to terminate financing of Ukraine

IMF Managing Director Lagarde threatened to terminate financing of Ukraine
IMF Managing Director Lagarde threatened to terminate financing of Ukraine

02.10.2016 Daily Highlights by the Digests & Analytics Ukraine

Topics from Media and Social Networks

  • IMF Managing Director Lagarde threatened to terminate financing of Ukraine in the case of absence of reforms and fight against corruption.
  • Three people died in the explosion of a bus near checkpoint in Maryinka.
  • Former President Yanukovych was declared a biggest corruptionist in the world.

Key Events in Ukraine

  • Minister of Infrastructure Pivovarsky said that the NABU opened an investigation against the officials of the Ministry on the misuse of the budgetary funds.
  • Police officers, involved in the pursuit of the perpetrator, which resulted in death of the car passenger, were suspended from duty for the time of investigation. Interior Minister Arsen Avakov considers that the use of weapons by the police was justified. He said that the police re-certification should be completed before the end of the year, and the “KORD” special forces  will start operation by autumn of 2017.
  • Pechersk court reinstated the former head of the State Employment Service, caught in September 2015 with a bribe of more than half a million hryvnia.
  • The Ministry of Justice intends to sell Lukyanovsky detention facility and to use the received funds  to build a new one.
  • Minister of Justice Petrenko announced about elimination of 600 district departments of justice, instead of them 400 legal aid offices  will be created.
  • The General Prosecutor's Office said that during the Maidan events Ukrainian authorities were influenced by the FSB and Russian President Assistant Surkov.
  • Head of "Ukrnafta" Rollins said that the price of oil below $ 25 per barrel would be a big problem for the company, however, it is showing positive financial results so far.
  • Finance Minister Yaresko stated that in Ukraine there is no specific person or institution responsible for the national currency rate, which is influenced by the volume of issued money and the policy of the financial institutions.
  • During the session on the interbank hryvnia rate remained stable. The National Bank set the official exchange rate at the folloing level: 25.94 ₴/$, 29.20 ₴/€ (+0.05 UAH), 3.28 ₴/10 ₽ (-0.02 UAH).

Ukraine at War

  • In the conflict zone in the Donbass fighting continues along all the demarcation line. In the Donetsk airport area three soldiers tripped a landmine wire , one of them died.
  • Near Maryinka, a minibus tripped a mine and exploded when trying to drive via roadside , three people were killed , several more were wounded. NSDC Secretary Turchynov said that checkpoint in Maryinka may be closed due to the threat to the population lives because of the constant militants attacks.
  • The next meeting of the contact group in Minsk is scheduled for 17 February, it is still unknown whether it will be attended by the representative of Russia.
  • Military prosecutor Matios informed about possible arrest of several officers of the unit, in which there was a scandal in connection with the inhuman conditions of soldiers stay on military training ground.
  • The Prosecutor’s Office said that the evidence collected during the investigation of the participation of two Russian military in combat operations near Schastye are sufficient for the transfer of the case to court.

Ukraine and the World

  • IMF Director Lagarde said the Fund Management is concerned about the slowdown of public administration reform in Ukraine, weakening of fight against corruption and reduction of the impact of law and rule of law on the formation of the state policy. Lagarde said that the country could return to the previous state, which it had already experienced in recent history. If there is no revival of the reforms and real fight against corruption, the IMF can  curtail the help program. Finance Minister Yaresko believes that the IMF has no questions to Ukraine regarding the adopted budget, but there are claims to the leadership of the country about the pace of the reforms conducting and questions about the ongoing political crisis. President Poroshenko in a telephone conversation with Lagarde assured her that the country will continue reforms despite the political crisis and the lack of understanding between the Parliament and the Government. He once again stressed the need to reset the Cabinet without early elections. Poroshenko and Lagarde agreed to create a roadmap of the priority reforms that will give a new impuls in relations with the IMF.
  • Ambassador of Japan in Ukraine Sumi at a joint meeting of the Ministries of Interior and Justice, stated that Ukraine is not doing enough to combat the corruption, although some progress was still achieved. He stressed that the "Big Seven" countries will continue to support the Government of Ukraine in carrying out the reforms.
  • Ambassador Pyatt said that the US allocates for Ukraine the next tranche of aid in amount of $ 25 million to support the development of the police, the State Border Service, and for judicial reform. In his opinion, the statement of the IMF about the possible termination of the financing of Ukraine is an argument for the completion of the Government resetting and showing of zero tolerance to corruption.
  • The foreign ministers of the NATO countries decided to establish a multinational military force to enhance the Alliance's presence in tha Eastern Europe. NATO chief Stoltenberg said that the Alliance has already increased its group in the Black Sea region, including warships and AWACS reconnaissance aircraft .
  • US presidential candidate from the Republican Party billionaire Trump is willing to maintain good relations with President Putin.

The Trends

  • President Poroshenko at a meeting with civil society activists has once again confirmed that he considers the course of his administration right , and does not want to listen to the civil society opinion regarding the need for a new social contract and adoption of a new Constitution. Despite the obvious risks of such position and failures in domestic and foreign policy, incapability of the Parliament and absence of the reforms, he does not intend to change anything in the adopted line of conduct .
  • According to some financial analysts, in the event of the termination of funding by the IMF, the financial catastrophe will not happen in the country , because no large payments on external debt are expected in the nearest time. In addition, access to international financial markets is still limited, and investors do not come to the country because of the high level of corruption. The biggest problem, according to them, is  possible termination of the funding programs by the World Bank and the EBRD, which directly affect the maintenance of the country's infrastructure.

No comments:

Post a Comment