Brussels, 12/02/2015 (Agence Europe) - The IMF and the Ukrainian government have concluded a technical agreement on a new aid plan to Ukraine, which will have an envelope of €15.5 billion, which will be topped up by further support from the international community, in particular from the EU.
Given the geopolitical situation in Ukraine, this four-year aid plan, which has yet to be formally enshrined, “is not without its risks”, but it will support the Ukrainian authorities in their reform efforts, said the Director General of the IMF, Christine Lagarde, in Brussels on Thursday 12 February. She praised the results already achieved by the Ukrainians in their reforms, in the framework of the current bailout plan: compliance with a “strict budgetary discipline” (public deficit of 4.6% of GDP), adoption of a flexible exchange rate mechanism, significant increase in energy prices, reinforcing the legislative arsenal to fight corruption and money laundering. Under the new programme, further reforms will be expected: further increase in energy tariffs, restructuring of the banking and public enterprise sector and reinforcing the social safety net to help the least-favoured categories of the population.
On the European side, discussions on further aid to Ukraine may resume at the Ecofin Council of Tuesday 17 February, although this is not a formal agenda item. The finance ministers are to discuss aid of €1.8 billion, which could potentially be extended (see EUROPE 11240). (Mathieu Bion)