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Ukraine to plead financial aid from IMF - vice-premier

“A very serious crisis is coming up,” he added

KIEV, October 1 (Itar-Tass) — Ukraine has no other versions, but to come to agreement with the International Monetary Fund (IMF) on rendering financial aid under conditions of an upcoming crisis, said vice-premier and Minister of Social Policy Sergei Tigipko live on one of local TV channels.

“A very serious crisis is coming up. We have no versions; we should come to agreement with the IMF, since it is very difficult to face the financial crisis all alone without support of international financial organisations,” he added.

“We should respond correspondingly to this situation. All try to slash their outlays; this is, above all, the budget deficit, because it will be necessary to finance a deficit, to go to the market and borrow money. We have big loans without this, and secondly, have no money. Nobody gives money during a crisis,” Tigipko continued.

“The situation will deteriorate, and it will be necessary to act.” He noted at the same time that “privileges to some categories of population will be slashed down after all”.

According to Tigipko, the IMF is worried over the budget deficit of the Naftogaz Ukrainy Company. “Ukraine should liquidate it, among other things, by raising gas prices for population,” he continued. At the same time, according to the vice-premier, the 2012 state budget plans to set off this rise.

He specified at the same time “if we succeed in agreeing with Russia on cutting down gas prices, gas prices for Ukrainian population will not be possibly raised. “There should be compensators for people, since it is a very big rise. We face a dilemma: either we try to hold successful negotiations with Russia and to beat down the gas price, and we shall achieve, in actual fact, the same effect that is demanded by the IMF – to raise gas prices for population or to boost tariffs,” Tigipko underlined.

An IMF mission planned to go to Ukraine between August 29 and September 9. However, it shifted on the visit to the end of this month. The Fund explained its decision by an appropriate request by the Ukrainian cabinet which needed additional time to carry out the main measures, necessary to complete the second review of the cooperation programme with the IMF, including introduction and operation of a pension reform, higher gas tariffs and insurance of implementation of fiscal aims for 2011 and 2012.

It is planned that by the result of the visit, the mission can recommend the IMF board of directors completing the review of a programme under the stand-by agreement and to grant Ukraine another tranche.

In July 2010, the IMF approved a programme of financial assistance to Ukraine to a sum of over 15 billion US dollars till 2012. The country received the first tranche of 1.89 billion dollars a year ago. But the implementation of the programme was suspended since that time.

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