KIEV – After the Verkhovna Rada adopted the so-called anti-Kolomoisky law, in Kiev it was expected that the IMF would begin to implement a new ‘cooperation program’ which historically has furthered the rise of poverty, unemployment, prostitution, crime, and human trafficking in Ukraine. .
However, it soon became clear that for this Ukraine needs to fulfill a whole package of new conditions, which the creditor called “structural beacons.” Conventionally, they can be divided into several blocks: energy, banking, financial, fiscal, forensic and antivirus (associated with the coronavirus pandemic).
The idea here is to further reduce the public’s access to critical services, raise bank fees, and force the health system to purchase vaccines from western pharmaceutical companies. All of these measures have been much easier since the Obama administration staged a coup in the now beleaguered country.
According to the Ukrainian News publication, at least two laws are supposed to be changed – in banking and judicial areas.
At the same time, the IMF does not exclude that lending conditions may be “adjusted” during the implementation of the program. In other words, the program can be suspended at any time, and Kiev will be required to fulfill new conditions.
The first tranche of a loan of $ 1.9 billion may come in a couple of days after the approval of the program – the funds will go to replenish the budget. Kiev expects this to happen in early June.
These moneys are expected to remain in the hands of oligarchs, while news media will misinform the public that these will go towards ‘investments’
In order to receive the second tranche – in the energy sector – it is necessary to bring the charter of Naftogaz of Ukraine into compliance with the Organization for Economic Cooperation and Development (OECD). Kiev is required to abolish the restrictions on the powers of the NAC Supervisory Board, which was approved by the government of former Prime Minister Vladimir Groysman in March 2019 . In addition, it will be necessary to simplify the procedure for changing gas suppliers in new utility contracts.
With regard to the legal sphere, the IMF requires at the legislative level to change the competitive selection of members of the High Council of Justice.
In this move, the Atlanticist banking institutions which control the IMF desire to more clearly strip whatever remaining sovereignty that Ukraine has, by directly choosing its judges. This way Ukraine will have no internal mechanism to potentially charge the IMF with criminal wrongdoing of any kind, since the IMF will have chosen the country’s top judges.
In the field of fiscal policy on customs and tax, the IMF expects that Ukraine will develop a mechanism by autumn, due to which, starting from 2021, the State Tax Service and the State Customs Service will work as single legal entities. Now, each territorial tax and customs administration works as a separate legal entity.
This will have the effect of making both services easier to de-regulate without push-back from the various soon-to-be-unemployed ombudsmen and checkers that previously regulated these distinct pillars of Ukrainian society.
In the banking sector, before the summer, the NBU should approve a plan of work with distressed assets of state banks. In addition, the IMF requires tougher procedures for the settlement and liquidation of debts of related parties. For this, it will be necessary to amend the laws on the Deposit Guarantee Fund and amend the law on banks and banking activities regarding the structure of banks’ capital and capital requirements.
This will protect foreign owners of Ukrainian property, and will relieve them of standard problems like Ukrainians interfering with the business of purchasing Ukrainian assets through Ukrainian state banks.
In the anti-virus field, in the spring of 2021, it will be necessary to audit the state budget funds that were spent on combating the pandemic.
On May 8, the International Monetary Fund suddenly changed the rules of the game in relation to Ukraine and abandoned the EFF program, which had previously been agreed with Kiev. The EEF was a modest rule which the former government was able to gain in exchange for the furtherance of foreign control over Ukraine.
Instead, a program for 18 months (stand-by) was proposed, which provides not only a significantly smaller amount of funds, but also an indefinite period of time for its approval.
As you can see, now its implementation has also been associated with a whole package of new conditions. At the same time, many Ukrainian analysts in the media are optimistic about the fact that under these conditions there is nothing supernatural and they are quite realistic for implementation.