Last Wednesday can go down in Ukrainian history as a turning point on the way out of the crisis. If we draw an analogy with World War II, it somewhat resembles the Battle of Moscow, when the invader was still strong but the defending side showed him its true power and organization.
The International Monetary Fund (IMF) had set Ukraine a number of conditions that did not stir up too much enthusiasm in Ukrainian society and, if accepted by the government, might have thwarted Yulia Tymoshenko’s political intentions. So what happened to our government, which prior to this had not seemed too willing to bow to the IMF?
Certain steps were taken a few hours before the beginning of the promised “powwow of the three” at President Viktor Yushchenko’s office. Did the president and the prime minister, who had been fighting, really manage to muster courage and throw away their ambitions and stop the process of self-ruination? This appears to be the case. The uneasy political truce agreed upon on February 27 seems to have been working in this country’s interests since last Wednesday.
Tellingly, the International Monetary Fund’s resident representative in Ukraine, Max Alier, immediately spoke about progress in the cooperation between the IMF and Ukraine. He noted that the negotiations of the Ukrainian government and the IMF had “entered the next phase” and added more precisely: “We are starting a debate on the economic policy required for combating the crisis.”
It was Vice-Premier Hryhorii Nemyria who was requested to tell this good news to journalists. “Thanks to the constructive cooperation of all the participants in this process, the government made an agreed decision today, which we think will allow us to achieve practical results in the near future as far as the return of the IMF mission and, after some time, clearance of the second tranche of the loan are concerned,” he said.
Nemyria also spoke about measures “to ensure independent functioning of the National Bank of Ukraine,” for which it was decided to introduce changes to the Cabinet and NBU resolutions on refinancing banks during the financial and economic crisis and the Cabinet resolution on state participation in the capitalization of banks. Besides, the government has drawn up a draft law on canceling articles 84 and 86 of the 2009 State Budget, which Nemyria said “in the opinion of experts, created a threat to really independent functioning of the National Bank.”
This was also confirmed by the NBU First Deputy Chairman Anatolii Shapovalov. Noting that the Cabinet had introduced changes to the procedure of bank refinancing and canceled its demand that its representative take part in NBU board meetings that discuss the problems of refinancing, Shapovalov said that “Turchynov (first vice-premier appointed as the Cabinet’s official representative in the NBU – Ed.) will not be participating in the meetings.”
This looks like the defeat of Tymoshenko, who once proclaimed the NBU Governor Volodymyr Stelmakh and the National Bank itself enemies and was doing her utmost to establish control over the central bank. Is this the reason why Lady Yu told the vice-premier last Wednesday to make public the government’s decision? Still, this assessment looks rather light-minded. Our premier is an experienced tactician, and she considers any retreat as sort of a sidetrack to victory.
There is a temptation to believe that this will also be Ukraine’s victory over the crisis. Europe also signaled this last Wednesday. As Thomas Mirow, president of the European Bank for Reconstruction and Development (EBRD), said in London, Eastern European countries will be able to avoid a default on debts and “their revival will be very fast.” “Underneath the present problems, many of the fundamentals remain strong… We believe that Eastern Europe will come out of the present crisis, perhaps bruised and battered, but not beaten,” Mirow said confidently.
In his words, “The biggest concern in the region at the moment is Ukraine, which is confronted with a multitude of problems. An inherently unstable political situation only exacerbates a grave economic situation. The stability of Ukraine is of crucial importance for the future of all Europe. We must not allow it to become a no-man’s land,” Mirow pointed out. In his opinion, “shutting the door on our neighbors now will also mean shutting the door on our own future.”
President Viktor Yushchenko of Ukraine also spoke about the importance of the IMF program for Ukraine’s economy. “This is the basic document for Ukraine in 2009,” he said in an interview with a British TV channel and stressed that the IMF program is very important for Ukraine at this stage because it is about changes and reforms in the budgetary and social spheres and in a number of economic sectors. The president expressed hope that the international community will make a concerted effort to this end.
