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Ukraine has to borrow from IMF to repay 2008-2009 debts - Azarov

October 08, 2011, 3:37 UTC+3
"We, unfortunately, have huge debts dating back to 2008-2009, which we must repay now," he wrote on his personal page in Facebook
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KIEV, October 8 (Itar-Tass) —— Ukraine has to borrow from the International Monetary Fund (IMF) to repay the debts made incurred under the previous government, Prime Minister Nikolai Azarov said.

"We, unfortunately, have huge debts dating back to 2008-2009, which we must repay now," he wrote on his personal page in Facebook, answering questions from users of this social network. Azarov said that no one was forcing Ukraine to take loans from the IMF.

"So far we have had to borrow money wherever possible on favorable terms," said Azarov.

"We are not forced to borrow from the IMF. Russia, for example, has refused to take IMF funds. But, thanks to the enormous revenues from oil and gas its foreign exchange reserves exceed 500 billion dollars. In addition, there is a so-called stabilization fund, approximately as big," Azarov said.

At the same time, he promised that the Ukrainian Cabinet of Ministers was working hard to develop the national economy.

"Only economic development will make the country independent from other creditors. In the meantime, let us be realistic: the creditors have the right to determine their conditions," Azarov said.

An IMF mission will arrive in Kiev at the end of this month. In July 2010 the Fund decided to resume cooperation with Ukraine to adopt a stand-by program for Ukraine 16 billion dollars worth. It was also then that Kiev received the first tranche. In December 2010 the IMF agreed to disburse a second stand-by tranche of approximately 1.6 billion. In March, however, its mission in Kiev did not recommend its board of directors to take a positive decision on the disbursement the next tranche to Ukraine. The government believes the two stand-by tranches may now be combined, which would replenish the foreign exchange reserves of the National Bank of Ukraine with about 3 billion dollars.

Earlier, the IMF mission had planned to visit Ukraine in late August-early September, but then postponed the visit. The Fund explained the delay followed a request from the Ukrainian government, which had asked for more time to implement key activities to complete the second review of the cooperation program with the IMF. Among the main activities required for completing the second review of the program the IMF names the introduction of a pension reform, higher gas prices, as well as compliance with fiscal targets for 2011 and 2012.

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