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Ukraine Lawmakers Approve Key Legislation With Eye On IMF Funds


Ihor Umanskiy had only been finance minister since March 4.
Ihor Umanskiy had only been finance minister since March 4.

KYIV -- Ukraine's parliament, the Verkhovna Rada, has approved in its first reading a banking bill that will help open up billions of dollars worth of aid to Kyiv from the International Monetary Fund (IMF).

The bill, approved at an extraordinary session of parliament on March 30, prevents the former owners of banks that were nationalized or liquidated in recent years during a widespread financial-sector clean-up from regaining ownership rights or receiving monetary compensation.

Though the legislation also has other implications for Ukraine's banks, analysts say its main purpose is to prevent one of Ukraine's most-powerful tycoons, Ihor Kolomoyskiy, the former co-owner of PrivatBank, from regaining ownership rights to the bank.

Later in the session, lawmakers also approved legislation lifting a ban on the sale of farmland, which is expected to unlock enormous investment potential in what is already one of the world's top grain exporters.

The land market should be opened by July 1, 2021, based on the bill's provisions.

The IMF is said to have insisted upon approval of the banking law -- and also pushed for the farmland sale ban to be lifted -- amid signs the government was considering returning PrivatBank, which is in the midst of a major legal and political fight involving Kolomoyskiy.

The bank was nationalized in 2016 when international auditors found a $5.5 billion hole in its balance sheet; Kolomoyskiy, who has close ties to President Volodymyr Zelenskiy, has insisted that the bank was improperly nationalized by Ukrainian regulators.

Kolomoyskiy has denied any wrongdoing and maintains he is the rightful owner of PrivatBank.

Ukraine has been in talks with the IMF for months about a three-year, $5.5 billion loan tied to reforms to help the country meet a spike in debt repayments this year.

In addition to the banking bill, lawmakers at the March 30 session approved Serhiy Marchenko, who was previously a deputy finance minister and deputy head of the presidential office of former leader Petro Poroshenko, as finance minister, replacing Ihor Umanskiy, who had been in office for less than a month before he was fired earlier in the day.

Parliament also voted to approve former Odesa Governor Maksym Stepanov as the new health minister to replace Illya Yemets, who like Umanskiy was only weeks into his job before being fired on March 30.

Umanskiy and Yemets became ministers on March 4 when parliament approved Zelenskiy's cabinet shuffle.

No reason was given for their dismissal.

The Verkhovna Rada also failed to approve the first reading of a revised 2020 state budget that takes into account the impact of the coronavirus outbreak.

The government said in a statement on March 30 that the virus would have a devastating impact on the economy in a revision of gross domestic product for this year to a contraction of 3.9 percent from a previous forecast of 3.7 percent growth.

Prime Minister Denys Shmyhal said at the session when introducing the revised budget that a special fund to tackle the pandemic had been established.

"The fund will total more than 97 billion hryvnyas ($4 billion) and will be a transparent tool that will be used to support the purchase of equipment for medical personnel, pharmaceuticals, and personal-protection items," Shmyhal said.

The draft budget will now return to a parliamentary committee for revision.

As of 10 p.m. local time on March 30, the number of confirmed infections in Ukraine was officially reported at 548, with 13 deaths.

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