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anti-corruption court (ACC). While an ACC law has been passed it included a clause that allows appeals to heard in regular (corrupt) courts, which effectively guts the entire initiative of its value.
The IMF has dug its heels in and it appears that the $17.5bn stand by programme, of which Ukraine has received half and most of that in 2014, is now effectively frozen.
The IMF is also insisting Ukraine follow through on promises to hike domestic gas tariffs and also cut public spending. The IMF insists that the public deficit be capped at 2.5% of GDP but the current budget assumes a 4%, with heavy spending in the social sphere given that next year is an election year.
President Petro Poroshenko himself has fallen between the cracks of failing to please either the voters or the donors and his personal popularity has tumbled to single digits, as has that of his eponymous party. Popularist Yulia Tymoshenko is now the front-runner in both parliamentary and presidential elections next year, but as a popularist with a track record of lying to the IMF she is less popular with Ukraine’s western backers. In the meantime a whopping 82% of the population say the country is “going in the wrong direction” according to recent polls.
If the IMF is not placated and a new deal put in place in 2019 then Ukraine could run into serious trouble. It has some $3bn of debt redemptions to make this year, rising to $7bn next year, as the debt relief deal cut by former Finance Minister Natalie Jaresko is about to expire. With out international support Ukraine could be facing a fresh round of devaluation and default as soon as next year.
5 UKRAINE Country Report July 2018 www.intellinews.com