IMF Warns Ukraine to Battle Corruption or Face Halt of Bailout

The International Monetary Fund has warned it will halt its $40bn (£28bn) bailout programme to Ukraine unless the conflict-torn eastern European country takes immediate action to tackle corruption.

The IMF’s managing director, Christine Lagarde, said on Wednesday that “without a substantial new effort” to improve governance, it was hard to see how the Washington-based organisation could continue to provide financial help.

“I am concerned about Ukraine’s slow progress in improving governance and fighting corruption, and reducing the influence of vested interests in policymaking,” Lagarde said.

“Without a substantial new effort to invigorate governance reforms and fight corruption, it is hard to see how the IMF-supported programme can continue and be successful. Ukraine risks a return to the pattern of failed economic policies that has plagued its recent history. It is vital that Ukraine’s leadership acts now to put the country back on a promising path of reform.”

Lagarde’s comments follow the resignation last week of Ukraine’s economic minister, Aivaras Abromavičius, after he accused a senior aide to the country’s president, Petro Poroshenko, of blocking anti-corruption reforms.

The IMF’s programme involves disbursing money in stages and has always been contingent on economic and political reforms. A third tranche of assistance has been held up since October because IMF officials have grown increasingly concerned that the financial assistance would be squandered or stolen by corrupt officials.

via The Guardian

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza