Press Release: Statement by IMF Managing Director Christine Lagarde on Ukraine

IMF News, March 11, 2015

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IMF Executive Board approved an Extended Arrangement under the Extended Fund Facility (EFF) of SDR 12.348 billion (about $17.5 billion, €15.5 billion) for Ukraine.
The arrangement is four-year in duration.
The program replaces a Stand-By Arrangement with an Extended Arrangement under the EFF to reflect Ukraine’s more protracted balance-of-payments needs.
Expected benefits of the Extended Arrangement as stated:
- more funding
- more time
- more flexibility
- better financing terms

Support immediate economic stabilization in Ukraine.
Support a set of deep and wide-ranging policy reforms aimed at restoring robust growth over the medium term and improving living standards for the Ukrainian people.
The program builds on actions taken under the earlier Stand-By Arrangement and is supported by additional resources from the international community.

Many key measures are front-loaded under the new program, including:
- further sizable energy tariff increases
- bank restructuring
- governance reforms of state-owned enterprises
- legal changes aimed at combating corruption and strengthening the rule of law
The Ukrainian government has taken actions toward consultations with the holders of their public sector debt with a view to improving medium-term sustainability.

The Ukrainian authorities have:
- maintained fiscal discipline in very difficult conditions
- allowed the exchange rate to adjust
- increased retail end-user prices for gas
To cushion the impact of adjustment, especially for the poorest groups, measures are being taken to strengthen and better target the social safety net.

The program is ambitious and involves risks, notably those stemming from the conflict in the east of the country.
The cease-fire agreed last month in Minsk seems to be largely holding for now, offering hope that a further loss of life can be avoided.
With continued firm implementation, the Managing Director stated there is a "reasonably strong prospect of success."

Press Release No. 15/105
Date: March 11, 2015
IMF Communications Department, Media Relations — E-mail: media@imf.org, Phone: 202-623-7100

Source: Press Release: Statement by IMF Managing Director Christine Lagarde on Ukraine (Press Release No. 15/105), March 11, 2015.