Economics

International lenders postpone plans to provide loans to Kyiv because of corruption

27 march 2015 | 10:25

They fear that money allocated for development of the country will end being in the pockets of corrupt officials. 

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The West is still not sure that the Ukrainian government can (and wants) to curb corruption
Western governments and agencies postpone granting loans for Ukraine, hoping that Kyiv will provide more detailed plans for using the funds.

According to Reuters, citing its sources, it is unlikely that large loans will be provided for Ukraine at the donors conference, scheduled for April 28. Moreover, according to one of the sources, major donors might entirely ignore the event.

"World's largest economies, Germany and the USA are preparing to invest billions of dollars in long-term loans, and they want to know how their money will be spent," – cites Reuters an unnamed EU official.

Having agreed with the EU, Ukraine presented a plan to reform until March, 2015. "(But) there are still doubts about how much Ukraine needs on roads, power plants, schools and hospitals and how far the judicial reform will go to avoid the money ending up being on the accounts of corrupt officials," – writes Reuters.

It is expected that the final decision will be taken at the end of the year. European officials, however, note that the conference is likely to be in some sense a step forward, since Kyiv by receiving $ 17.5 billion loan from the International Monetary Fund is preparing the ground for entering donors such as the EU, Norway, Switzerland and Canada.

Earlier, it was assumed that the international donor conference will be held in late January and early February 2015. Nevertheless, in January it was announced that it would be held in April.

Read more: IMF believes Donbas conflict intensification jeopardizes providing loans to Ukraine

"The donor conference will likely be held in April, since we want to refer more to reforms and changes," – said the Minister of Economy Ayvaras Abromavichus.

On March 30, Ukraine will be visited by a high-ranking delegation from the EU, including the European Commission's President Jean-Claude Juncker and head of EU diplomacy Federica Mogherini. It is assumed that the issue of future donors conference will be raised during the visit.

Source: Reuters

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