Location Ukraine Ukraine

IMF demands pension cuts as condition for further loans to Ukrainian government

Ukrainian Finance Minister Oleksandr Danyliuk says that Ukraine will not receive a new disbursement from the International Monetary Fund (IMF) if it does not conduct pension reform.

“There are some key conditions for receiving the next tranche. Pension reform is very important. There will be no disbursement without the pension reform,” he said during debates at Hudson Institute, Washington, D.C., when answering a question about conditions for the next tranche under the IMF’s Extended Fund Facility (EFF).

The minister said that reforming the pension system is needed for Ukraine and its people rather than for securing an IMF loan. As UNIAN reported earlier, the IMF Executive Board on April 3 completed the third review of the EFF and approved the fourth $1 billion tranche. On April 5, the National Bank of Ukraine announced the receipt of the new IMF tranche, which together with the second disbursement of the European Union macro-financial assistance received the day before would allow increasing international reserves to $16.7 billion, the highest level since the middle of 2014.

The receipt of the fourth tranche of the IMF loan is an unprecedented event for Ukraine since the country had earlier suspended the implementation of loan programs at earlier stages, while the IMF halted its financing after the first, second, and third disbursements. The IMF urged Ukrainian authorities to accelerate structural reforms to achieve faster and more sustainable growth, starting with the privatization and development of the agricultural land market. The IMF also stressed that corruption needs to be tackled decisively.

Ukraine cannot any longer delay comprehensive pension reform, including by raising the effective retirement age, the IMF said.

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