Timothy Ash comments:

[EU Foreign Minister] Federica Mogheriniarrives Kyiv on Sunday, so this gives her something to sign off on.

This is a new program, or rather re-packaging the EUR600m left over from the last EUR1.8bn program Macro Finance Agreement. That was not disbursed due to reform backtracking on e-declarations and then timber exports. They are throwing in another EUR400m to make it a nice round number, with the program likely to extend to 2019 and the end of the current IMF program.

The Ministry of Finance wanted EUR1.8bn, but got the reduced amount of EUR1bn.

It was all smiles last December when Federica Mogherini and Prime Minister Groysman met in Brussels (UNIAN/VladislavMusienko)

These monies are not being disbursed yet, but will be linked to sorting out the issues remaining with the last MFA, plus also holding to IMF conditionality. This means the first tranche will not come until the long delayed (11 months now) latest review of the Extended Fund Facility gets done. There, the key issues still are sign off on a truly independent anti-corruption court, and gas price hikes.

The Danes are leading the EU coordination effort. There will be a donor reform conference on June 27 in Copenhagen. The hope is that, by giving the Ukrainians a bit more carrot, they will finally pull their fingers out on the ACC, and gas price hikes, plus other things to be done on the reform front.

Timothy Ash is senior sovereign strategist for emerging markets at BlueBay Asset Management in London and a member of the UBJ Editorial Board.

IMF continues to insist on adoption of Anti-Corruption Court law in line with Ukraine's obligations

KYIV (Interfax) -- The International Monetary Fund continues to insist on the adoption by the Ukrainian authorities of legislation on the Anti-Corruption Court in accordance with the country's obligations under the Extended Fund Facility cooperation program.

"Our discussions are ongoing with the Ukrainian authorities. In fact, at the request of the authorities a small staff team from the IMF visited Kyiv to discuss technical aspects of reforms which are supported by the program, including broad discussion on various issues, including draft of the legislation on the anticorruption court. At the conclusion of the visit we issued a statement indicating that further progress needs to be made on delayed measures that are necessary to achieve the program objectives, including in energy sector and fiscal policy as well as I just mentioned Anticorruption efforts," IMF official representative Gerry Rice said during a regular briefing in Washington on Thursday.

He added, the date of the arrival of the IMF mission to Kyiv as part of the next revision of the EFF program has not yet been determined.

The four-year EFF program launched by the IMF in March 2015, in the total amount of SDR 12.348 billion (around $17.25 billion), initially involved quarterly reviews of the program, with the first tranche of $5 billion, and the next three, SDR 1.18 billion each (around $1.65 billion), to be paid during 2015, and decreasing quarterly tranches to SDR 0.44 billion ($0.61 billion) in 2016-2018. Ukraine was able to receive, with a slight delay, the second tranche, $1.7 billion, under this program, in early August 2015, followed by a lengthy pause because of the country's failure to meet a number of conditions, political crisis and changes in the government.

Posted March 9, 2018