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Patience has run out: Ukraine does not want to comply with the IMF

In Ukraine, the brewing of another full-scale crisis: members of Parliament oppose the new agreement of Kiev with the International monetary Fund. To plug holes in the budget, we need money, but legislators are troubled by the fact that the conditions imposed by the lender, the country actually goes into administration. Experts are convinced: the Kiev agreement will not refuse, but also to fulfill obligations to the IMF will not.

The twenty-second of may, the IMF reported that a new credit program by five billion dollars with Kiev agreed. A week later, the head of a credit organization Kristalina Georgieva, in conversation with President Vladimir Zelensky promised to provide the first tranche of $ 1.9 billion "in the near future".

However, the joy of the Ukrainians was short-lived: suddenly it became clear that Kiev signed with the IMF Memorandum, taking on unprecedented political and economic commitment. The document officially is not published, but was posted on the Internet the Deputy of the Verkhovna Rada Oleksandr Dubinsky.

A significant part of the IMF to Ukraine is traditionally related to the final transfer to market relations of the entire social sphere. First and foremost we are talking about the lifting of restrictions on higher prices for various services, from housing to medicine and education.

In particular, since September, introduced new tariffs for communal, which can "adequately reflect changes in the cost of gas and non-gas costs (including capex)". In other words, Ukrainians will have out of pocket to pay the capital spending of companies.

In addition, the tariffs will be indexed according to the growth in gas prices. And he inevitably will rise, as another paragraph of the Memorandum provides for the abolition of the decree of the Cabinet of Ministers on regulation of the cost of natural gas: from January 1, for the population and utility companies — only the market price.

"Our situation is 100% similar to the situation in 2014-2015, — said the Deputy of the Verkhovna Rada from the party "servant of the people" Irina Vereschuk. — Incomes fell, and if on this background to raise tariffs, we get a sharp rise in defaults and bankruptcy public sphere".

The IMF analysts are well aware, so in the Memorandum there is a clause on the obligation of the Ukrainian authorities "to develop tools that will enable the collection of payments via higher fines and simplify enforcement".

"This means that the first will impose high penalties for late payments on utility bills. And if the person will not be able to repay it, he has arrested the property and sell at auction to pay bills," explains Dubinsky.

According to Irina Vereschuk the government before raising rates, should bring an order to "Naftogaz of Ukraine". "Now it is a state within a state, — specifies the Deputy. — As experts say, in the "Naftogaz" has billions of unpaid dividends, which would have to be taken out and placed in the Treasury. But if the money is not there, then ask for that pay such high salaries to the management of the company — a million-two. These black holes must be closed, and then, perhaps, you do not need to the people in his pocket to climb".

However, the IMF has the opposite view on this issue: there insist on full independence of the largest state corporations from the government.

In particular, the Memorandum requires to deprive the Cabinet the right to appoint the head and members of the Board of "Naftogaz of Ukraine" and approve the financial plan of the Corporation. These functions should move to the Supervisory Board of "Naftogaz", which includes foreign representatives, recommended by the IMF.

Supervisory boards with maximum powers and formed from the Western experts, will appear in all Ukrainian banks. Thus, it is foreigners who will decide what Ukrainian projects to Fund and which not.

Moreover, the IMF requires that the foreign representatives were in the High Council of justice of Ukraine — the body that appoints the judges. Hence, the Ukrainian judicial system will be under external control. Against this background, the former condition of the Fund for land reform — to allow for the purchase of land by foreigners — looks a real trifle.

"The new Memorandum will lead to a complete loss of subjectivity — says Dubinsky. — The people of Ukraine will not manage your country, it will make the IMF".

After the contents of the agreement between Ukraine and the IMF became public, the country began to search for the perpetrators of such a national humiliation. But to no avail.

"My colleague, the MP appealed to the government to open the mystery: who is from Ukraine is negotiating with the IMF and the signed memoranda, — says Irina Vereschuk. — She replied that it is confidential information and we cannot know who is authorized to take such commitments, which must all tighten our belts. Now, not even to whom to appeal".

Deputies tried to criticize the agreement with the IMF. "The conditions on the new loan program is inadmissible for Ukraine, — said the head of the parliamentary faction of the "servant of the people" David Arakhamiya. — Many things are presented in a way that would not be accepted by neither Ukrainian society nor Parliament."

"Or we now turn the situation and explain that these five billion promised by the us, the IMF, are not worth the memoranda, or continue to tighten the noose around his neck," agrees Irina Vereschuk.

Ukrainian experts are agreements with the IMF, much calmer. "They wanted us to have order in everything, but we need to understand the ideal that "keeping in mind" our sponsors encounters with the Ukrainian practice of implementation, and the result is not what was planned," — said the Deputy Director of the Ukrainian research Institute of extremism Bogdan Petrenko.

In other words, the specialists are sure: now Kiev promised the IMF anything, just to get the first tranche of the new loan program. Once these 1.9 billion listed, Ukrainians, as usual, I'll start a quiet sabotage of all agreements, tearing the implementation of the Memorandum.

The IMF is going to consider a new loan to Kyiv on 9 June. A positive solution a few days ago seemed assured. But the scandal from the ill-fated Memorandum may change the position of the Ukrainian sponsors.