Ukraine Adopts Reforms For IMF Aid

KIEV, Ukraine -- Ukraine's Prime Minister Yulia Tymoshenko on Tuesday went around President Viktor Yuschchenko and his supporters in parliament and unilaterally adopted anti-crisis reforms necessary to get more International Monetary Fund aid.

IMF's Ceyla Pazarbasioglu (L) at joint press conference with PM Yulia Tymoshenko, on April 14, 2009.

Tymoshenko's government took the dramatic measure after parliament again failed to adopt a package of laws needed to launch the reforms, this time because President Viktor Yushchenko's allies in parliament refused to support the vote.

Talks on receiving a second $1.9 billion installment of the $16.4 billion rescue loan have been under way for months, but the stabilization measures were never fully enacted due to Tymoshenko's bitter rivalry with Yushchenko and political turmoil ahead of the presidential vote set for the fall.

Tymoshenko said Tuesday's government decisions essentially substituted the necessary legislation and won't need parliament approval. The reforms are aimed at trimming government spending and include increasing pension fund payments for businesses and raising electricity and heating bills for well-off consumers. The IMF wants Ukraine to run a budget deficit not exceeding 3 percent of economic output.

There was no immediate comment from Yushchenko's office or from parliament, but the move was likely to prompt more infighting and turmoil.

Ceyla Pazarbasioglu, the head of the IMF mission to Ukraine, praised the move, even though it showed a lack of unity between the country's branches of power. "It's encouraging to see that progress is being made," she told reporters at a joint news conference with Tymoshenko.

Ukraine, which is suffering from a severe financial crisis, one of the worst in Europe, desperately needs the IMF money. Its economy shrank by nearly 30 percent in the first two months of this year, the national currency lost nearly half of its value against the dollar and nearly 1 million people are unemployed.

Source: AP


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