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and Ukraine down graded from a medium term Extended Fund Facility (EFF) of $17.5bn that runs over several year to more tightly monitored Stand by agreement (SBA) of $3.9bn that has to be renegotiated every 18 months or so.
Zelenskiy has hinted that he wants Ukraine to go back to the more generous EFF framework.
Recall, the current SBA program with the IMF was signed in December 2018 for 14 months and for a total consideration of $3.9bn, of, which Ukraine got $1.4bn in late 2018, and was planned to get other two tranches of $1.25bn each in May and November 2019.
Alexander Paraschiy of Concorde Capital said in a note: “We expect that the new Cabinet will be formed much ahead of these deadlines outlined, or by mid- September. However, this does not necessarily mean that Ukraine will be able to finalize talks with the IMF and get the next loan tranche soon after. A possible impediment for the tranche's quick arrival could be the start of preparation of Ukraine’s state budget for the next calendar year in mid- September. Usually, the IMF tends to avoid issuing loans while the budget is being formed (usually, it’s completed no earlier than in late November).”
“We do not rule out that this year will be an exception for the IMF, as the state budget for 2020 is not among the focuses of the current loan program. But our base-case scenario is that Ukraine will see the next IMF tranche not earlier than in late November. At the same time, it’s possible that Ukraine will get more than the $1.25bn earmarked for this tranche,” Paraschiy added.
2.1 Zelenskiy party aiming to form parliamentary majority by itself
The People’s Servant party, led by President Volodymyr Zelenskiy, will aim to form the parliamentary majority by itself in the early elections scheduled for July 21, campaign manager Oleksandr Korniyenko told a May 27 press conference.
“We don’t plan to turn to anyone for help or forming the coalition,” he said. “We have a program for the maximum – forming the coalition with one political force.” The party’s program, as well as its candidates for single-mandate districts and closed list, will be presented at its June 8 congress, Korniyenko said. The same day, the party announced its leadership, with the 35-year-old Dmytro Razumkov serving as party head, the 34-year-old Korniyenko as campaign manager and the 28-year-old Mykhaylo Fedorov as digital manager.
The party will recruit its candidates from its list of about 600,0000 volunteers during the presidential campaign, Korniyenko said. Candidates will be filtered based on a review of their documents, integrity, a staff assessment and public feedback, he said. A typical candidate “is a team player who can defend the interests of our country. They should be a successful person with a clean reputation,” said Party Head Razumkov, as reported by the pravda.com.ua news site.
“The goal of forming the parliamentary majority, and coalition government, is realistic for The People’s Servant party, which has 37% support, according to a recent poll. It will be able to gain a majority by cobbling together strong candidates in the single-mandate districts. Declaring such an ambitious feat
15 UKRAINE Country Report June 2019 www.intellinews.com