Eastern Europe News

Ukraine Inks Preliminary Deal With IMF

Ukraine has been locked in a battle to root out the systemic corruption that has been endemic in the country’s political and financial system since its independence from the Soviet Union. This has been a major impediment to the International Monetary Fund releasing additional funds to help the country as it battles the pro-Russian separatists in the east.

The IMF recently announced that Ukraine will be receiving approximately $1 billion in the first half of 2017. This is an important announcement as without the funds Ukraine would be in dire straits.

“The IMF staff has reached agreement with the Ukrainian authorities on an updated Memorandum of Economic and Financial Policies,” the Fund’s Ukrainian mission chief Ron van Rooden said in the statement.

“This paves the way for consideration of the third review of the arrangement under the Extended Fund Facility (EFF) by the IMF’s Executive Board … in the second half of March,” the statement said in reference to a $1 billion loan.

The fund is behind schedule in dispersing the $17.5 billion aid package reached in 2015. In addition to corruption issues, the country has failed in other reform measures such as raising the retirement age in addition to further privatization of state-owned industry. The additional disbursement is a shot in the arm for the war-torn country but there remains much more to be done to receive additional tranches from the international body.

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