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December 2016. The IMF has made it clear that returning the bank or paying compensation is a red line it is not willing to cross and it is widely believed that this was one of the main reasons the IMF team didn't complete their negotiations as the IMF is waiting for a clear statement on Privatbank’s status from Zelenskiy which he has yet to make.
Fuel was added to the fire on September 27 when Secretary of the National Security and Defence Council of Ukraine Oleksandr Danylyuk and former Finance Minister quit his post. The local press report that the reason for his departure was a dispute with Zelenskiy over Kolomoisky.
"The mission has had productive discussions on policies for a new programme these last two weeks, especially on fiscal and monetary policies, as well as key reform measures. It also underscored the importance of central bank independence and safeguarding financial stability, as well as the need to make every effort to minimise the fiscal costs of bank resolutions. Discussions on the new program will continue in the coming weeks."
The updated macro-forecast of the NBU assumes the country will receive $2bn from the IMF under the Extended Fund Facility (EFF) that the authorities are expected to sign ​in the fourth quarter of 2019​.
In 2018, the IMF approved ​a 14-month, $3.9bn Stand-By Arrangement (SBA) for Ukraine; however, Kyiv failed to secure this amount of funding before the start of the presidential and parliamentary campaigns. The programme replaced a $17.5bn EFF agreed with Kyiv in 2015.
The IMF added in the statement that following this year’s elections, the Ukrainian authorities now have an opportunity to advance much-needed reforms. "They have set themselves the ambitious task of transforming the economy and achieving stronger growth to improve living standards of all Ukrainians, while safeguarding macro-economic stability, and they have already secured passage of various pieces of reform legislation."
2.6​ ​Ukraine Cabinet publishes a five year plan for 40% real growth and a slew of ambitious goals for each ministry
Ukraine’s Cabinet published an ambitious five-year plan ​that calls for real GDP growth of 40%, $50mn in FDI and 1mn new jobs for Ukrainian citizens on September 29.
“It’s a lot more than we are attracting now, but it’s absolutely realistic if to consider the example of successful countries, such as Georgia,” Prime Minister Oleksiy Honcharuk told a press briefing the next day, adding,” This means that we should create such conditions that it will be comfortable for people to launch businesses ... and for it to be interesting for foreign investors to enter Ukraine and establish their manufacturing here.”
The program was published on the rada.gov.ua website and includes targets for each ministry for the next five years.
Amongst the targets for the Finance Ministry ​is the introduction of an agency for state debt management, make state debt paper more liquid, reduce the foreign currency portion of state debt to 50% from 66% currently, and cut the state debt to GDP ratio to 40% by end-2024 from about 58% currently.
The Finance Ministry is also targeting a ratings upgrade to A- by 2024 from CCC+/B currently. It plans to “attract investors to state banks” and reduce the state's share in the banking system to 20% from 60% of banking assets now.
10​ UKRAINE Country Report​ October 2019 ​ ​www.intellinews.com