Ukraine’s parliament at odds over bills needed to secure $8-billion IMF package

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Ukrainian lawmakers on Monday failed at their first attempt to approve an emergency budget, appoint a finance minister or pass reform bills needed to unlock an $8-billion loan package from the International Monetary Fund.

President Volodymyr Zelensky had urged lawmakers to pass banking legislation and lift a ban on land sales – the final hurdles to an IMF deal – or risk plunging the country into default due to the economic shock from the coronavirus epidemic.

But there was not enough consensus to put the bills on the parliamentary agenda at the start of the day, the speaker said.

The banking law, which would prevent former owners of banks declared insolvent from regaining their assets, is seen as against the interests of Ihor Kolomoisky, a wealthy tycoon and an early backer of Zelensky’s 2019 presidential campaign.

The government also could not muster enough votes to approve the appointment of Serhiy Marchenko, a former deputy finance minister under a previous administration, as the new finance minister after his predecessor was sacked less than a month into the job.

Parliament could resume voting later on Monday but it was not immediately clear whether the government would have enough votes to carry its proposals.

“There will most likely be an evening meeting of the parliament – at a time like this you cannot leave the country without a finance minister,” Oleksandr Kachura, a lawmaker in Zelensky’s party, told Reuters.

With the number of coronavirus cases rising fast, parliament also voted to dismiss Health Minister Illia Yemets, who had also been appointed as part of a sweeping government reshuffle at the start of March.

In revised forecasts submitted to parliament on Monday, the government said it expected the budget deficit to treble and inflation to rise to 8.7 per cent from a previous estimate of 5.8 per cent. The economy could shrink 3.9 per cent, a government spokeswoman said.

Ukraine’s economy has been propped up by IMF deals since the 2014 Russian annexation of Crimea plunged the country into turmoil. Such deals, contingent on passing reforms and tackling endemic corruption, also shored up investor confidence.

Zelensky in a national address on Sunday urged lawmakers to pass the bills on banking and land sales.

“Our country has, in fact, found itself at a crossroads due to coronavirus, and has two paths,” he said. One path meant passing the bills.

“Otherwise – the second path. A failure of these laws leading to the economic downturn and even the threat of default.”

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