The country’s parliament has passed a series of new laws in order to receive over $3 billion in loans from a bailout program backed by the IMF.
Finance Ministry official Artem Shevalev announced that the necessary laws have now been passed. So far Ukraine has received $5 billion from the International Monetary Fund, which pledged a total of $17.5 billion, according to Reuters.
Parliament passes laws to unlock foreign loans
In order to unlock a further round of loans, reforms to the banking system and energy sector had to be written into national law. The last law was passed by MPs on Thursday, meaning that bills on utility prices, anti-corruption programs, deposit guarantees and the collection of receivables by the state energy company have all been passed.
“Thanks to the MPs for being responsible – all currently outstanding IMF and World Bank laws (have been) approved,” Shevalev wrote on Facebook.
Ukraine has approached bankruptcy due to economic pressures resulting from years of mismanagement and the ongoing conflict with pro-Russian rebels in the East of the country. As a result a $40 billion bailout plan was drawn up to save the economy, of which the IMF loans are one part.
Of the $40 billion, $15 billion is expected to come from a restructuring of Ukraine’s sovereign and quasi-sovereign debt.
The latest reforms are expected to unlock $1.7 billion from the IMF, $1 billion from the World Bank, $300 million from Japan and $218 million from Germany.
“These funds will be used to support the budget and foreign currency reserves, that is, to strengthen the hryvnia (currency) and for urgent budgetary needs,” he said.
Separatist movement further complicates situation in Ukraine
Not only is Ukraine working to clean up its finances, it also has to deal with continued violent clashes in the East. Exhanges of fire between Ukrainian troops and pro-Russian rebels continue despite the agreement of a ceasefire.
Under the terms of the agreement, separatist regions are to be granted more autonomy from Kiev. MPs approved a draft law this Thursday which goes some way to meeting this requirement.
Western leaders placed considerable pressure on Ukrainian President Petro Poroshenko to make him submit the bill.
“We’ve been talking about these changes for over a year. It’s time to stop talking and get down to business,” Poroshenko told assembled MPs.
Opposition to terms of ceasefire within Ukraine
Some members of the opposition claim that the law flies in the face of Ukrainian attempts to maintain its territorial integrity following the Russian annexation of the Crimea last year.
“Thousands of soldiers are giving their lives on the front line for an independent sovereign state – not for the special status of these territories,” Radical Party leader Oleh Lyashko said. He then sang the national anthem at the end of his speech.
For the law to be passed, the courts must decide it is constitutional, before at least 300 of 450 MPs vote in favor of the bill. The Ukrainian parliament will meet again in autumn following the summer break. It has not yet been decided exactly what level of autonomy the two separatist regions would receive if the law is passed.
Given the continued loss of military and civilian lives in the East, it may not be easy to convince a two-thirds of the Ukrainian parliament that concessions to the separatists are in the country’s best interests. Continued fighting makes dealing with economic strife a great deal harder for Kiev.