Former Ukraine Leaders Warn IMF Not To Issue $15 Billion Loan

KIEV, Ukraine -- Former Ukrainian Prime Minister Yulia Tymoshenko, has requested the International Monetary Fund (IMF) not provide Ukraine with a $15 billion loan, over concerns that the government will use one-third of it to pay the country's outstanding gas bill.

Former Ukrainian Prime Minister Yulia Tymoshenko.

Tymoshenko said the loan should only be provided if the money is used for economic reforms, not to repay the debt to gas company RosUkrEnergo.

RosUkrEnergo transports gas from Russia and Asia to Ukraine and other Eastern and Central European nations.

Company owner, Dmitry Firtash, is an ally of Russian-leaning Ukrainian President Viktor Yanukovych.

RosUkrEnergo has claimed that its counterpart, Ukraine's national gas company Naftogaz, illegally took 11 billion cubic meters of gas from the company last year.

The case was taken to the Stockholm Arbitration Court, which ruled last month that Naftogaz should return the quantity of gas to RosUkrEnergo before September.

The court ruling has still not been enforced by Ukrainian authorities, as the government has been wondering where to get the funds or additional natural gas to repay the debt.

The Ukrainian Parliament has supported the forming of a provisional commission to investigate the matter. Tymoshenko's parliamentary faction has written a draft regulation to forbid the use of the IMF loan to repay the gas debt.

“We have proposed that the IMF not give the loan until the Ukrainian government … refuses to carry out Stockholm’s decision,” said Tymoshenko on Ukrainian television.

Former Ukrainian President Viktor Yushchenko, has also stressed that the IMF should be careful in providing Ukraine with the loan as there would be the possibility of a non-purpose use of the loan.

Tymoshenko and Yushchenko, were once close allies and national heroes during the 2004 Orange Revolution that resulted in pro-Western Yushchenko becoming president.

Their alliance was broken due to a disagreement over power. The once close allies then started endless arguments resulting in stagnating political and economic reform in the country.

The current president, Russian-leaning Yanukovych, won the presidency last February thereby ousting the former Orange Revolution heros.

Last week, the IMF had agreed to give Ukraine a $15 billion loan to support the implementation of economic reforms.

The decision came right after Secretary of State Hillary Clinton's visit to Ukraine on July 2.

Ukraine had previously received a $16.4 billion loan from the IMF but it was suspended because of violations of IMF austerity rules. Ukraine's ailing economy slowed by 15 percent last year during the global economic crisis.

Source: Epoch Times