Ukraine’s PM Honcharuk upbeat on talks with IMF

The government expects that a new three-year program with the IMF will be launched this year, PM Oleksy Honcharuk has said in a video blog. He dismissed the reports that talks with the IMF stalled and noted that representatives of his government and the central bank would shortly head for Washington to continue talks with the IMF. The new program with the IMF would serve as a foundation for cooperation with all international partners, said Honcharuk. Reuters cited central bank deputy governor Kateryna Rozhkova as saying that discussions with the IMF on the next funding tranche were stalled because of the situation around Privatbank. However, later she said in a social media post that the uncertainty over Privatbank did not mean that talks with the IMF on a new program were over.

Privatbank, which is Ukraine’s largest bank, was nationalized in 2016, and the state has injected UAH 155bn in the bank to keep it afloat. However, Privatbank’s former co-owners sued Ukraine over the nationalization. Honcharuk suggested in an interview with FT last month that some compromise could be reached with Privatbank’s former owners. After that, an IMF mission left Ukraine, issuing a non-committal statement on further cooperation. Most recently, Zelensky’s former security aide Oleksandr Danylyuk said his resignation was prompted by the situation around Privatbank.

In the meantime, Privatbank CEO Peter Krumhansl complained of pressure on the bank from law-enforcement agencies after the change of government, speaking in an interview with nv.ua. He said the bank’s top managers, including himself, had been regularly questioned and the bank’s documents were requested for checks by investigators since last May, while in September Privatbank’s offices were searched. We recall that Volodymyr Zelensky was elected as president last April, and Ihor Kolomoysky, a former co-owner of Privatbank, backed his campaign. Krumhansl said he met IMF mission representatives when they visited Ukraine last month. Commenting on Honcharuk’s interview to FT, Krumhansl said the government should first of all discuss with Privatbank former owners how they planned to pay their debt to the state. He noted that Ukraine promised to the IMF that the former owners would pay.

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