The decisive moment for Ukraine – Neue Zürcher Zeitung

The pace of reform in Ukraine was too slow. Now the IMF wants to see quick results, as explained by its local representative in the conversation. Kiev coming crucial weeks.

This writes Matthias Benz the article “crunch time for Ukraine”, published on the website of the newspaper Neue Zürcher Zeitung.

There are so many fires that Ukraine receives almost no attention from the international community. In fact, the situation is not comparable to that which was three years ago, when Russia annexed the Crimea and in Eastern Ukraine broke out initiated by the Moscow war. The conflict continues to smolder. But, at least, the economy the worst is over. After a deep recession, which was a heavy blow for the population, in 2015, the country finally returned to economic growth. The local currency the hryvnia has stabilized, and previously high inflation rates have fallen markedly.

The lack of progress

Politicians have been able to overcome the phase of economic stabilization. This would be followed by a period of fundamental structural reforms. Because Ukraine, which was never able to completely get rid of its Soviet heritage still has not created a functioning market economy.

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“The pace of structural reforms must now increase dramatically,” said the local representative of the International monetary Fund (IMF), Your Jerome. Without the IMF, as the largest international donor to Ukraine is unlikely to have survived the serious crisis of recent years.

But not as bad. Last week the IMF gave Kiev the fourth loan assistance in the amount of $ 1 billion, and carried out a comprehensive assessment of the situation. The fact that the IMF continues to support Ukrainian policy explains Your progress in some areas. The government and the Parliament passed a solid budget for 2017. National Bank eliminated a serious threat to financial stability, nationalized the largest Bank PrivatBank, which became insolvent.

Subsidized gas prices for the population were abolished, and it destroyed the source of corruption and budget deficit. The new law obliges public servants to declare their income and assets. The improvement is in small areas; the new Ombudsman struggles against the oppression of public bodies, which, for example, require bribes or refuse to return VAT. The population was noted as a great success that the EU has recently, finally, gave the Ukrainians a long-awaited visa-free entry.

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However, progress is insufficient. Groisman a year led by the new government, and during that time, the pace of reform slowed down. This is reflected in a recent assessment of the IMF, according to which Ukraine has not fulfilled 8 out of 11 goals. The decline in the pace of reforms indicates the reforms index, compiled by the organization “VoxUkraine”.

The struggle with resistance

With a lot of resistance encountered, first of all, major structural reforms. So, still not held required the privatization of many state enterprises. Connected oligarchs and many politicians do not want to lose the opportunity to devastate the company at the expense of the state budget.