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Poroshenko Assures IMF He's Committed To Reform After Warning

Ukrainian President Petro Poroshenko has assured the IMF that his government remains committed to reform and purging corruption.
Ukrainian President Petro Poroshenko has assured the IMF that his government remains committed to reform and purging corruption.

Ukrainian President Petro Poroshenko assured the International Monetary Fund (IMF) he remains committed to pursuing economic reforms and purging corruption from his government.

After receiving a sharp warning from the lender that Ukraine's $17.5 billion bailout is at risk on February 10, Poroshenko spoke with IMF managing director Christine Lagarde by phone and agreed to draw up a "road map" aimed at keeping reforms on track.

"The president noted the necessity of rebooting the government without snap elections, which would only deepen the political crisis and worsen conditions for carrying out reform," a statement on Poroshenko's official website said.

Separately, Lagarde said Poroshenko "reassured me of his unwavering commitment to reforms, including improving governance and fighting corruption."

"We agreed on the principle of a roadmap of actions and priority measures to ensure prompt progress," she said.

Lagarde had strongly warned that "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," in a highly unusual statement from Washington.

Repeating Mistakes Of The Past?

The warning followed the abrupt resignation last week of Ukraine's widely praised economy minister, Aivaras Abromavicius, who cited corruption within the ruling coalition.

The departure set off a political crisis and highlighted the government's tepid performance on reforms, which have been linked to $40 billion in loans from the IMF, European Union, and United States.

Lagarde in her statement stressed that she was concerned about slow progress on corruption.

Ukraine's Western backers have warned it not to repeat the mistakes of the past when the euphoria of 2004's pro-European Orange Revolution waned as a result of political infighting and a failure to stamp out graft.

Ukraine has been hoping to receive a third tranche of IMF loans worth $1.7 billion since October, but it was delayed by political squabbles and incomplete reform efforts.

Ukraine's central bank urged the government to work with the IMF to ensure the country's financial stability and give it a chance to recover from a deep recession.

"Further delay in resuming cooperation with the IMF could have negative consequences as much for the financial stability of our country as for the welfare of citizens," it said.

While Poroshenko expressed his preference for a cabinet reshuffle, his government's approval ratings have plummeted and it could face a no-confidence motion in parliament in mid-February.

The political crisis has weighed heavily on the Ukrainian bond market and has helped push the hryvnia currency close to 11-month lows.

With reporting by Reuters and TASS
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