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6 months ago
Ukraine PM sees IMF deal by end-Feb amid new fighting in east
February 10, 2017 / 12:21 PM / 6 months ago

Ukraine PM sees IMF deal by end-Feb amid new fighting in east

A Ukrainian serviceman is seen at a position on the front line near the government-held town of Avdiyivka, Ukraine.Oleksandr Klymenko

BRUSSELS (Reuters) - Kiev expects to reach a deal with the International Monetary Fund by the end of the month to allow the next tranche of aid, Prime Minister Volodymyr Groysman said on Friday.

Groysman, speaking in an interview with Reuters, also blamed Russia for the biggest surge in violence in Ukraine's industrial east for more than a year. He called on U.S. President Donald Trump to provide "defensive weapons" to Ukraine to bring Moscow back into peace talks.

"We have practically completed negotiations (with the IMF) and only a few nuances remain," he said of talks with the global lender to unlock the latest series of loans under Ukraine's $17.5 billion (14 billion pounds), four-year bailout by the end of the month.

The disbursement of $1.7 billion worth of aid, part of a plan to aid recovery from an economic crisis aggravated by the separatist conflict in the east, has been delayed since October.

Groysman, 39 and an ally of President Petro Poroshenko who last April was brought in to end parliamentary infighting that threatened Western-backed reforms, said Kiev intended to cooperate with the Washington-based lender.

But he said the IMF needed to have "realistic" expectations on what Ukraine could achieve in terms of judicial reforms that are holding up talks.

"It's important that all the conditions ... have realistic deadlines," he said during a two-day visit to Brussels where he met officials from the European Union and the North Atlantic Treaty Organisation.

Groysman also promised to submit a pension system proposal this year to reduce its massive deficit after years of mismanagement in order to receive further IMF loans.

A local resident shows a family photo in her home which was damaged during fighting between the Ukrainian army and pro-Russian separatists in the government-held industrial town of Avdiyivka, Ukraine.Gleb Garanich

However, he warned that it was one of the most sensitive reforms, pointing to how a previous government's bid to raise the retirement age in 2011 led to protests. He stressed he had no plans to raise the retirement age but warned: "This is a not an easy discussion to have with the Ukrainian people."

In a gesture by the EU, Commission President Jean-Claude Juncker promised to send 600 million euros ($638 million) to Kiev in the next few weeks after Groysman submitted a draft bill to lift a ban on Ukrainian wood exports.

Slideshow (6 Images)

"BARBARISM"

The West has been seeking to modernise one of the world's most corrupt countries since the 2013-14 pro-European uprising which ousted Russian-backed president Viktor Yanukovich. But Groysman said he believed Moscow was doing everything in its power to hold Ukraine back from closer ties with Europe.

With Kiev's forces fighting pro-Russian separatists in the Donbass region of eastern Ukraine for nearly three years in a conflict that has killed some 10,000 people, Groysman accused Moscow of sponsoring "21st century barbarism".

Russia denies any involvement in the conflict.

Last week was the most violent over the last 13 months, according to international monitors.

"Russia completely controls the situation," he said of the hostilities that put at risk a fragile, two-year ceasefire.

Reporting by Robin Emmott; Editing by Alissa de Carbonnel and Ralph Boulton

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