On January 16, Evropeyska Pravda newspaper published a document that it calls the latest version of the memorandum on cooperation between Ukraine and the IMF. To receive the next billion-dollar tranche, Ukraine must meet 12 requirements, seven of which are new. The requirements include carrying out pension reform by raising the retirement age to 63 years, selling the land, abolishing the simplified tax system, dealing with the registry of the recipients of social payments and other unpopular reforms.

The document evoked the criticism of experts in Ukraine. Some doubted its authenticity. Others suspected the President’s administration in the "leak" of the information. 

The government cannot confirm the accuracy of the published memorandum

Deputy Prime Minister of Ukraine Pavlo Rozenko said he cannot confirm the validity of the memorandum on cooperation between Ukraine and the IMF that was published by the media. "I would like to ask you to pay less attention to another batch of unknown documents in the media. Now, I cannot confirm the authenticity of the documents. The agreed updated text of the memorandum does not exist today," Rozenko said.

At the same time, the Deputy Prime Minister assured that the government would not support raising the retirement age. In fact there is no document that would oblige the authorities to do so.

"Nobody is going to raise anything. To date, there are no demands from the IMF or a signed memorandum on raising the retirement age. Yes, the difficult negotiations are being conducted. I think it is not a secret that the IMF has long spoken about the need for such a step. But my principled position remains unchanged: this step will not solve the problems of the pension system in Ukraine," he said. Rozenko also added that "the government will not allow any shock in the pension system."

The main requirement of the IMF is not to increase the retirement age, but to establish conceptual reforms and to fight against corruption, which they did observe in Ukraine. This was stated by the leader of the Agrarian Party of Ukraine, Vitaliy Skotsyk.

"Yesterday I met with the IMF Resident Representative in Ukraine, Jerome Vacher and his team. The main conclusion that I made after that meeting is that the Fund wants to work in Ukraine but the experts do not see progress in the implementation of reforms and the fight against corruption," Skotsyk explained.

Commenting on Pavlo Rozenko's statement that the government would not make any laws on retirement, Skotsyk noted that there is no need for this for now because the Cabinet is still fulfilling the obligations undertaken by the government of Azarov.

"A separate memorandum is signed for each tranche of the loan. Now the government is implementing the increase of the retirement age for women to 60 years. Ukraine promised to implement this way back under President Yanukovych. We could talk about 63 years only after that [is accomplished]. If the economic policy will not be changed, this is how, obviously, it will be, because the Pension Fund deficit amounts to 140 billion hryvnia," Skotsyk said.

According to the politician, the problems with the revenue of the Pension Fund of Ukraine are not caused by demographics but by the migration crisis. "According to the UN classification, 42 percent of the population in Ukraine is economically inactive, that is, people under 16 and older than 64 years. Our demographic structure is good. But the problem is that 7.5 million Ukrainians are working abroad and not paying taxes in Ukraine.”

He noted that the IMF's recommendations are designed to ensure that within 8-10 years the provision of loans to Ukraine will be stopped.

"What is the IMF? It's a lending organization that wants to get their money back with interest. It is the government which made the IMF into a "boogeyman" in the eyes of Ukrainians and frightens us with requirements instead of implementing reforms. The Fund might not even give the money. But the problem is that the government itself is approaching the lender to patch a hole of 1.6 billion dollars in the budget and agrees to fulfill the obligations," Skotsyk said.

Expert: the publication of the memorandum might leave Ukraine without the tranche

Economist Oleksandr Okhrimenko believes that the publication of the new requirements of the IMF in the media may leave Ukraine without another loan because the board might simply not gather for the meeting.

Okhrimenko accuses the administration of the President of Ukraine in the "leak" of the information. According to him, they understood there that the loan would not be given, therefore they used the document to alleviate social tensions.

"The disclosure of the agreements with the IMF is a serious crime—even the slightest hint of a disclosure. This indicates that the information about the memorandum was given to the reporters in the presidential administration. The purpose of this campaign is to "leak" the information. As a result of this incident, the IMF Executive Directors Board could fail to meet: they could say that confidential information was disclosed. And the government will tell us that we were not given the loan because these conditions are very disadvantageous for us.

Okhrimenko is one of a number of experts who called the IMF "requirements" themselves absurd.

"Yes, indeed. Demands to Ukraine seem a bit absurd: for the sake of one billion to absolutely kill the pension system, which is a painful issue. The money is not worth the social revolt that will happen if it is still put forward. Plus, you need to add to this the abolition of the simplified tax system, which at the moment covers about 1.6 million people in Ukraine, which is not also not worth IMF money," he stressed.

Okhrimenko expressed confidence that the search for those responsible in the Administration of the President will not be conducted, and journalists will say that they received the information in the mail.

  Ukraine, IMF

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