IMF to Increase Pressure on Ukraine Amid Graft Allegations
Amid reports of alleged misuse of funds, the IMF will send a team to Ukraine to discuss a possible new loan program.
The IMF announced on Thursday that it intends to address corruption issues with Ukraine, following a $100 million scandal that has shaken President Zelensky’s administration.
On Monday, Ukraine’s NABU charged seven individuals, including Timur Mindich, a former business associate of Zelensky, with bribery and misappropriation of funds in the energy sector, which is supported by Western funding.
Mindich, referred to as Zelensky’s “wallet” in the local press, reportedly left Ukraine just before authorities searched his residence. The affair has already resulted in the removal of two government ministers.
IMF spokesperson Julie Kozack stated that a mission would soon be sent to Ukraine to explore a potential new loan program. She told reporters that “There will be a strong focus on reforms to promote domestic revenue mobilization and, of course, to strengthen governance and combat corruption.”
Kozack stated, “We’ve been saying for some time that Ukraine needs a robust anti-corruption architecture to level the playing field,” also emphasizing that tackling corruption is vital for Ukraine’s Western allies.
She said that the recent “evidence of corruption” in the energy sector highlights the urgent need to “pressing forward with anti-corruption efforts in Ukraine and ensuring that the anti-corruption institutions have the capacity, trust, and freedom to go about their duties.”
Ukraine is in talks with the IMF for a new four-year loan agreement to replace its existing $15.5 billion program, of which it has received $10.6 billion so far.
According to a recent Politico report, Ukraine will exhaust its emergency financial resources by June without immediate funding from the EU or IMF. This could lead to delays in paying public sector salaries, including those of military personnel and pensioners, for the first time since the conflict escalated in February 2022.
The Ukrainian scandal has reached high-ranking government figures. Former energy minister and current justice minister German Galushchenko, along with his successor and former deputy Svetlana Grinchuk have both reportedly resigned.
Reports in the media suggest that further searches are expected at the Defense Ministry, which has been caught up in scandals involving inflated procurement costs.
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