It is notable to see the International Monetary Fund finally spelling it out in terms of what needs to be done.
The IMF Resident Representative in Ukraine, Goesta Ljungman, issued the following statement in Kyiv on Feb. 19, as reported by the Financial Times:
“A small staff team visited Kyiv during February 12–16 to discuss some technical aspects of reforms agreed under the program, focusing in particular on the draft legislation on the anti-corruption court. It is now important that the authorities move expeditiously with parliamentary consideration of the draft law on the anti-corruption court, while ensuring that the necessary amendments are adopted during the parliamentary process to make the approved lawfully consistent with program commitments and the recommendations of the Venice Commission of the Council of Europe. Further progress also needs to be made on other delayed measures that are necessary to achieve program objectives, including in the energy sector and with regard to fiscal policy. Discussions will continue in the coming weeks.”
At this stage, the first draft of the anti-corruption legislation is not compliant, and President Petro Poroshenko has passed the buck to the Verkhovna Rada to move the legislation towards that indicated by the Venice Commission and demanded by the IMF. But given the fractured state of the Rada, strong vested interests in the Rada against this legislation, plus the lack of direction/leadership from Poroshenko, it is very hard to see any near-term hope of revisions to the test being made to make this IMF compliant.
I sense this anti-corruption legislation is the deal breaker for the IMF, and also for the Poroshenko administration. And I think a key signal really as to whether the Poroshenko administration is serious about fighting corruption – I have my doubts.
In my opinion, it looks like the IMF program will remain off track for some time and the Ministry of Finance will have to decide whether it tries to come to market before then, to get some cash in the bank.
Also hardly inspiring to hear of the reform-minded finance minister, Oleksandr Danylyuk, engaged in a legal battle with his own State Fiscal Service – old habits die hard there, as the minister faces a rear-guard action from vested interests resisting change.
Meanwhile, whatever happened to the proposed vote on a new National Bank of Ukraine governor Yakov Smoliy? That was supposed to have been scheduled for the first week or so of February, but still has not happened.
