Ukraine needs to borrow "less than $5B" - Deputy PM

10:34, 18 May 2009
Ukraine
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Ukraine still needs external funds

Ukraine still needs external funds on top of the $16.4 billion loan it obtained from the International Monetary Fund last year, the country`s vice prime minister Hryhoriy Nemyria told Dow Jones Newswires Saturday.

According to Dow Jones, speaking on the sidelines of the European Bank for Reconstruction and Development`s annual meeting, Nemyria said that the sum needed is "below $5 billion" and that talks are under way with a number of possible lenders.

Crisis-stricken Ukraine has been in talks with Russia to borrow $5 billion to finance its budget deficit. Ukraine has also approached other countries for help.

"We are ready to talk with any lenders, as long as there is no political angle in it, as long as there is no political quid pro quo", Nemyria said.

He declined to say at which stage the talks are, or which country or institution is eager to provide funds, but reiterated that Ukraine sees financial help from the European Union, or individual European countries as a possibility. An increase in the IMF loan is also possible, he said.

The IMF May 8 gave Ukraine access to $2.8 billion, the second tranche of the loan.

The next IMF review will focus on making progress on bank restructuring in Ukraine. However, that may prove to be difficult, as Ukraine`s government wants the owners of the country`s troubled banks to restructure their debt with foreign lenders prior to ceding control to the state.

"If it`s not done, the country would face extra debt of between $1.4 billion to $1.5 billion to the banks` lenders," Ukraine`s acting finance minister Ihor Umansky said.

The Wall Street Journal

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