Ukraine’s cabinet to approve decrees for more IMF funds

18:14, 14 April 2009
Ukraine
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Tymoshenko said her government is prepared

Ukrainian Prime Minister Yulia Tymoshenko said her government is prepared to approve three laws by decree to help restore the flow of funds from an International Monetary Fund loan after parliament refused to debate the legislation, Bloomberg reported.

“Today, we will adopt necessary changes through government decrees, which will lay the foundation for resuming cooperation with international financial organizations,” Tymoshenko told reporters at a Cabinet meeting today in Kiev. “The decrees will allow the reforms which were supposed to be passed by Parliament today.”

The Kiev-based legislature declined to debate and pass changes to pension laws, including cuts in payments for retired state employees, and legislation on raising funding for the state-run oil and gas company NAK Naftogaz Ukrainy.

Ukraine, like Latvia, Hungary, Serbia and Romania, sought an international bailout after the credit crunch dried up investment and recessions across western Europe sapped demand for exports. The IMF approved a two-year $16.4 billion loan in November and $4.5 billion was disbursed that month. Still, the government’s plan to run a 5 percent budget deficit this year delayed the second installment, initially planned for mid- February.

The Washington-based lender’s mission retuned to Kiev last week after Ukrainian lawmakers approved two measures to narrow the budget gap, including increasing taxes on alcohol and diesel products, and pledged to pass the other three legal amendments.

Ukraine is in recession after nine years of growth. Its economy contracted 8 percent in the fourth quarter of 2008, compared with 6.4 percent growth in the previous quarter. The banking system has been battered by the crisis, which cut investments and weakened the hryvnia. The European Bank for Reconstruction and Development said it will support Ukrainian lenders after the country resumes cooperation with the IMF.

Bloomberg

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