IMF Demands Ukraine Veto New Wage, Pension Law

WASHINGTON, DC -- The International Monetary Fund demanded on Sunday that Ukraine's government veto a wage and pension law passed this week by the country's parliament, saying it was at odds with an IMF support programme.

International Monetary Fund (IMF) envoy Ceyla Pazarbasioglu shakes hands with Ukrainian President Viktor Yushchenko prior to talks in Kiev.

The IMF said Ukraine's economic and financial situation was "stabilizing" under the support program, but "corrective actions" were needed in some areas.

The IMF assessment followed a visit to Kiev by an IMF mission that held talks with the finance ministry and the national bank, and secured an agreement with them on the corrective actions that would be needed.

"The mission is now awaiting endorsement of the agreed policy package from the signatories to the program -- the president, the prime minister, the minister of finance, and the governor of the National Bank -- including assurances that the wage and pension law approved by Ukraine's parliament, the Rada, this week, which is at odds with the objectives of the authorities' program, will be vetoed," the IMF said.

Ukraine, one of the hardest hit European countries by the global economic crisis, faces a 15 percent contraction of its economy this year.

But the World Bank earlier this month forecast that it will grow 2.5 percent next year on the strength of a global economic recovery.

"The mission found that the economic and financial situation in Ukraine is stabilizing as a result of policies under this program," the IMF said.

"Preserving these gains will require policy discipline and corrective actions in some areas," it said.

Source: AFP