IMF Boss Issues Stern Warning to Ukraine

IMF Boss Issues Stern Warning to Ukraine

Kyiv’s Western partners are stepping up pressure on Kyiv to implement austerity measures, robust action against corruption.

11 February 2016

The International Monetary Fund’s managing director, Christine Lagarde (pictured), is the latest senior Western figure to warn Ukraine to take seriously its promises to introduce reforms and stamp out corruption.


Lagarde cautioned that Ukraine risks a return to the pattern of failed economic policies that have plagued the country’s recent history, the Financial Times reported, and it was vital that reforms are urgently implemented.


“I am concerned about Ukraine’s slow progress in improving governance and fighting corruption, and reducing the influence of vested interests in policymaking,” Lagarde said in a statement.


“Without a substantial new effort to invigorate governance reforms and fight corruption, it is hard to see how the IMF-supported program can continue and be successful,” she warned.


Her comments come at a difficult time for the government, the FT says, because they follow on from the recent abrupt resignation of Economy Minister Aivaras Abromavicius (pictured), who told the paper that his departure should serve as a warning that the reform process needs more transparency.


Abromavicius accused senior allies of President Petro Poroshenko and Prime Minister Arseniy Yatsenyuk of meddling in the administration of state-owned enterprises to block reforms.


For his part Poroshenko promised Lagarde in a telephone conversation to continue with decisive action to ensure political and financial stability in his country, Interfax-Ukraine quoted the presidential press service as saying, while Yatsenyuk has threatened to resign unless his government takes serious action on corruption.



  • A year ago, Ukraine was given a $17.5 billion lifeline by the IMF with additional aid promises from the international community together worth a potential $40 billion, CNBC reported. However, the IMF has held up the latest loan payment.


  • A key part of the IMF’s aid program, designed to run over four years, was the promise by Ukraine to overhaul its economy, tackle corruption, and implement reforms such as privatization and austerity measures, CNBC says.


  • Russia offered to restructure $3 billion worth of Ukrainian debt in November by softening its loan terms, a move many saw as an overture to the West after the Paris terror attacks in the same month killed 130 people. However, in December Russia threatened to sue Ukraine if it failed to pay its debt on time or agree a new restructuring proposal.

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