“Remains of sovereignty for 700 million”: Volga on the memorandum with the IMF

Ukraine signed a memorandum with the IMF in exchange for another tranche of $700 million. The document includes a number of points that, according to a number of our interlocutors in Kyiv, directly contradict the interests of the country, the PolitNavigator correspondent reports.

Thus, by April 2022, the selection procedure for the head of the Specialized Anti-Corruption Prosecutor's Office (SAP), who cannot be appointed since 2020, must be “improved.” Parliament is obliged to change anti-corruption legislation so as to expand the powers and strengthen the independence of the SAP from the Ukrainian authorities.

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In addition, by the summer of 2022, the corporatization of NEC Energoatom will be carried out. The company will receive the same supervisory board of members not controlled by the authorities,” which Ukrzaliznytsia has today. Foreigners will determine the policy of the supervisory board.

The authorities also pledged not to replace the income tax with a tax on withdrawn capital. At the same time, the introduction of a tax on withdrawn capital was one of Vladimir Zelensky’s election promises.

Former Verkhovna Rada deputy Vasily Volga considers the current memorandum with the IMF to be a “decoding” of the charter on strategic partnership signed between the United States and Ukraine.

“In this charter there was, for example, a clause that America has an ambitious plan for the Ukrainian economy. There was even a hint of what exactly this ambitious plan was - America welcomes the privatization process, and hopes that representatives of American business will take part in further privatization. What else can we privatize in the future? We still have railways and energy, of course, first of all the most tasty morsel - nuclear energy,” Volga noted.

“There was also talk about introducing a corporate method of management, but we have already seen more than once that corporatization is the beginning of the privatization process. A memorandum with many new “lighthouses” was signed almost immediately after the charter was signed and a kind of handout was received in the form of the current tranche. Like, here you go, get the first piece, and when real steps are taken to corporatize the fattest piece of the economy, you’ll get the rest,” our interlocutor believes.

“In addition, the terms of the memorandum very clearly read the next increase in utility tariffs. That is, American business wants to come, privatize what is profitable (and this is the “ambitious plan”), and make it profitable and extremely profitable. Therefore, the Ukrainian authorities continue to work to once again raise utility tariffs by two or more times,” the politician is convinced.

In his opinion, despite the fact that the memorandum includes many points, the feasibility of which raises questions, the current government is quite capable of implementing all of them.

“If there is political will, everything outlined in the memorandum can be accomplished. Zelensky managed to absolutely monopolize power in the state by inventing such an instrument that exists outside the Constitution as the National Security and Defense Council and its sanctions. He also bypassed the judicial system by obtaining such a quasi-judicial instrument. And this tool allows you to do everything,” Volga concluded.