President of the National Bank of Ukraine Viktor Yushchenko looked exhausted to journalists last Tuesday, like an athlete who has beaten a strong opponent. The content of his speech should have testified to the victory: the IMF mission not only dictated its conditions to Ukraine, but also agreed with some Ukrainian arguments. The NBU and the Ministry of Finance, concealing the disagreements between them, managed to convince the mission that they have gained control over the financial situation in Ukraine.
It is possible that Viktor Yushchenko and Ihor Mitiukov had to also fight Prime Minister Valery Pustovoitenko, who noted in his analysis of the economic situation that it is complicated by the need to pay off the domestic state loan, according to Interfax-Ukraine. The bonds, issued in the first half of 1997, were “a crime against the state and the people.”
Nonetheless, the parties reached the agreement, which opens up the way for the EFF loan totaling $2-2.5 billion. Now everything depends on the Ukrainian Parliament, which can reject or block the package of economic decrees issued by President Kuchma. These decrees turned out to be Ukraine’s main evidence to show its readiness to reorganize Ukraine’s financial policy.
Meanwhile, dissatisfaction with the presidential economic initiatives and other concessions Ukraine made during negotiations with the IMF is growing in the Parliament. In particular with decision to reorganize the oil and gas sector.
Former Deputy Prime Minister and present leader of the Reforms and Order Party Viktor Pynzenyk told journalists that “the government, which is living with the help of loans and not carrying out any structural reforms is building a pyramid.” According to him, the situation is so serious that we will simply not be able to escape financial crisis.
In truth, the government was forced to use Hr 780 million for domestic bond payments in June and Hr 764 million in July. In August it will take over a billion hryvnias to cover interest on the domestic bonds and foreign debts. The Victorious Yushchenko talks about possible restructuring. But as we see, any loan that looks like victory in the beginning carries the threat of possible defeat in the future.






