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IMF chief warns Ukraine over slow pace of reform IMF chief warns Ukraine over slow pace of reform
(35 minutes later)
MOSCOW — The head of the International Monetary Fund, Christine Lagarde, has warned Ukraine it would be unable to keep supporting it financially if the country doesn’t step up its reforms efforts. MOSCOW — The head of the International Monetary Fund warned Ukraine on Wednesday that the organization would be unable to keep supporting the country financially if it doesn’t step up its reform efforts.
Ukraine relies on funding from the IMF and international donors as it battles deep economic problems, in large part resulting from the conflict in the country’s east. Ukraine relies on funding from the IMF and international donors as it battles deep economic problems, in large part resulting from the conflict in the country’s east, which has meant the loss of much industrial capacity. The economy shrank by more than 10 percent last year.
Lagarde says in a statement “it is hard to see how the IMF-supported program can continue and be successful” without a crackdown on corruption and a new push for governance reforms. “Without a substantial new effort to invigorate governance reforms and fight corruption, it is hard to see how the IMF-supported program can continue and be successful,” Christine Lagarde said in a statement. “Ukraine risks a return to the pattern of failed economic policies that has plagued its recent history.”
Lagarde also called on the government to cut “the influence of vested interests in policymaking.”
Ukraine is still waiting for the IMF to provide an installment of funding that has been delayed since October amid disputes over the budget.Ukraine is still waiting for the IMF to provide an installment of funding that has been delayed since October amid disputes over the budget.
Last week, Ukrainian Economy Minister Aivaras Abromavicius resigned, saying his reform efforts had been blocked by government colleagues. Last week, Ukrainian Economy Minister Aivaras Abromavicius resigned, saying his reform efforts had been blocked by government colleagues and that corrupt figures were trying to gain control of state funds.
The Lithuania-born former investment banker, who was a leading voice for reforms, told The Associated Press recently that he hoped his departure would serve as a “cold shower” for the government. “We are either two steps away from a break-through or we are two steps away from a break-down,” he added.
The IMF last year agreed to provide a total of $17.5 billion in loans to Ukraine to prop up its fragile economy, as part of a total $40 billion package from various international sources and debt renegotiation. The conditions for the IMF aid include sharp spending cuts.
Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.