On January 14, Kristalina Georgieva, the Managing Director of the International Monetary Fund (IMF), announced that in the coming weeks, she expects to request approval from the IMF’s Executive Board for a new $8.1 billion loan program to support war-torn Ukraine.
Georgieva is currently on her first visit to Ukraine since February 2023, meeting with President Zelensky and senior government officials.
In an interview with Reuters, she mentioned that despite numerous changes in Ukraine since the preliminary agreement reached in November, the core requirements of the plan will remain unchanged.
“I am here to understand the situation in this country during these exceptionally difficult times because I want to ensure that the agreement reached in November will be implemented. We recognize that the direction forward remains the same, but the way we take these steps needs careful adjustment,” she said.
IMF loans come with certain conditions. Georgieva stated that she informed Ukrainian authorities that they must continue with the removal of value-added tax (VAT) exemptions on consumer goods, despite facing resistance domestically.
She emphasized that the IMF is not asking for parliamentary approval of this measure for the loan to be approved, but rather mentioning the measure in parliament.
Georgieva stressed that this is a requirement that must be met, as the IMF cannot allow the Ukrainian economy to “hover between a market economy and a non-market economy.” “We must move forward. It’s not a question of whether we do it, but how we do it and how we gain parliamentary support,” she added.
She explained that the IMF’s demand is clear on this issue, stating, “This is non-negotiable. You need it to join the EU. You need it to attract the private sector, to make the business environment more favorable.”
Georgieva revealed that the IMF is discussing giving Ukraine a year to seek support in parliament to pass this controversial measure.