Ukraine, IMF reach compromise on further credit program

09:01, February 15, 2011      

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Ukraine and the International Monetary Fund (IMF) have managed to reach a compromise on most provisions of a bilateral Memorandum on Ukraine's economic and financial policies, which is being drawn up as part of the next review of the cooperation program, Ukrainian Prime Minister Mykola Azarov said on Monday.

"Visiting representatives of the IMF understand the government' s arguments in favor of step-by-step increasing of gas prices for households and gradual implementation of pension reform," Azarov told the press. He also noted that they had praised the Ukrainian cabinet's activities in raising revenues for the state budget and enforcing the memorandum of cooperation in 2010 and early 2011.

It is reported that both sides in talks summed up the results of mutual work on the most controversial issues -- such as a time frame of conducting pension reform and raising tariffs for natural gas, electricity and hot water supplies -- due to which the mission's visit here was extended for several days.

Ukraine insists on changing an earlier announced schedule of these measures mainly due to the national trade unions' strenuous opposition.

The mission is expected to make a statement on its work results late on Monday or Tuesday.

"A great step forward was taken in the past few days and a significant progress in the talks is seen now. The sides have reached agreement on almost all of the main problems," Ukraine's governmental press service cited IMF mission chief for Ukraine Thanos Arvanitis as saying.

The IMF mission previously planned to work here from Feb. 1 to Feb. 11. Its work should result in a decision on the possible allocation of the next tranche of a loan to Ukraine.

The IMF decided to renew its loan partnership with Ukraine in the summer of 2010 through a new stand-by program. The approved stand-by program for Ukraine is SDR 10 billion (about 15.6 billion U.S. dollars), which is the IMF's third biggest assistance program after those for Greece and Romania. Kiev has received 3.4 billion dollars in two tranches by now.

Source: Xinhua

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