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Ukraine Says It Expects Second IMF Tranche, Even As Judicial Reform Stumbles

Ukrainian Prime Minister Denys Shmyhal (file photo)
Ukrainian Prime Minister Denys Shmyhal (file photo)

Ukrainian Prime Minister Denys Shmyhal has said Kyiv expects to receive a second tranche from the International Monetary Fund (IMF) under a $5 billion loan program before the end of the year, even as the nation’s crucial judicial reform stumbles.

An IMF mission will arrive in Kyiv on September 18 to evaluate Ukraine’s progress on several key reforms, including judicial, central bank, and anti-corruption legislation, that the loans are contingent upon.

The IMF last year approved the 18-month loan to help the country deal with the economic impact of the coronavirus pandemic. Ukraine received its first tranche totaling $2.1 billion in June and is seeking a second tranche of $750 million.

“Ukraine has fulfilled all the conditions, met all the benchmarks that were underlined in the memorandum with the IMF," Shmyhal said. "We expect this mission will go smoothly, which will be the final one in preparation for the next tranche.”

Ukraine’s parliament in July passed judicial reform, which has been a top priority for the nation’s Western backers because it is seen as essential to enhancing the rule of law and curbing corruption.

The reform calls for the creation of two panels consisting of six experts each, including three foreigners, who will oversee the two bodies responsible for selecting and choosing candidates for judicial vacancies.

Ukraine’s judiciary has opposed the reform, saying the inclusion of foreign experts in the process comprises the nation’s sovereignty and is seeking to overturn it in the Constitutional Court.

Civil society activists say outside experts are necessary because the nation’s judicial system is deeply corrupt and incapable of reforming itself, pointing to past failures to rid itself of compromised judges.

International business associations say Ukraine’s corrupt judiciary is a major hinderance to foreign investment.

Ukraine’s judicial reform took a step forward when the country’s Western backers on September 10 selected its three candidates for each of the two panels.

However, Ukraine’s Council of Judges on September 13 announced that it had failed to select experts for one of the two panels, sparking accusations it was seeking to undermine the reform.

"They are buying their time to bring the appeal to the Constitutional Court with the hope of canceling the reform,” Tetiana Shevchuk, legal counsel for the Kyiv-based Anti-Corruption Action Center, told RFE/RL.

Following the council’s decision, Ukrainian President Volodymyr Zelenskiy called for a meeting on September 16 -- two days before the IMF mission arrives -- with representatives of the judiciary and parliament as well as ambassadors from the Group of Seven (G7) nations who back the reform agenda.

Judicial reform is said to be one of Ukrainian President Volodymyr Zelenskiy’s “main achievements” during his two years in office.
Judicial reform is said to be one of Ukrainian President Volodymyr Zelenskiy’s “main achievements” during his two years in office.

The president said the purpose of the meeting is to prevent the legislation from being derailed.

“Every illegal action aimed at blocking judicial reform will be immediately evaluated and rebuffed. I will not allow judges who hamper the reform and the cleanup of the judicial system to deprive the Ukrainians of the right to justice,” Zelenskiy said on September 13.

Zelenskiy touted the passage of judicial legislation during his first official visit to Washington earlier this month as he sought to dismiss concerns about his nation’s commitment to the tough reform agenda.

Shevchuk said judicial reform is one of Zelenskiy’s “main achievements” during his two years in office and that he has to “show ownership” of the process to resolve the situation.

“Hopefully this meeting will be enough to persuade the judges to move ahead with the reform,” she said.

With reporting by the Kyiv Post
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