Friday

15th Dec 2017

Feature

Behind the scenes of the EU-IMF 'shit-storm' on Ukraine

  • Poroshenko meets special forces of new anti-corruption bureau, the NABU (Photo: president.gov.ua)

The IMF has joined the EU in piling pressure on Ukraine to fight corruption. But the shock resignation of an EU fixer, which prompted the storm, may not be all it seems.

Ukrainian president Petro Poroshenko phoned International Monetary Fund (IMF) chief Christine Lagarde on Wednesday (10 January) to promise her “a roadmap of … top-priority reforms”.

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  • Shock resignation will test both Poroshenko (c) and the NABU (Photo: president.gov.ua)

He added that Kiev needed a government reshuffle, but without early elections, which would “only deepen the political crisis”.

She said that he had “reassured me of his unwavering commitment to reforms, including improving governance and fighting corruption”.

The exchange came after she had said earlier the same day: “Without a substantial new effort to invigorate governance reforms and fight corruption, it is hard to see how the IMF-supported programme can continue.”

The IMF is contributing $17.5 billion to a $40 billion international rescue package, which includes at least €11 billion ($12.5bn) of EU money.

The Washington-based lender had in any case delayed payment of a $1.7 billion tranche since last October.

But Lagarde’s ultimatum came after Aivarus Abromavicius, a 40-year old Lithuanian banker who’d been posted to Kiev as its economy minister, resigned last week citing corruption in Poroshenko’s inner circle.

The resignation prompted Lithuanian foreign minister Linas Linkevicius to tell EUobserver that Ukraine’s EU visa-free deal was at risk.

Danish foreign minister Kristian Jensen told the Reuters news agency that if Ukraine “doesn't come through” with reforms “it will be very difficult for Europe to continue united in support for sanctions against Russia”.

The row comes shortly before Dutch people in April vote in a referendum on whether to scrap the EU-Ukraine free-trade treaty.

It “plays into hands” of Russia, Linkevicius warned.

But corruption is in itself bad for the Ukrainian people, who struggle on average wages of €160 a month and pensions of €67 a month.

The Heritage Foundation, a US think tank, has said that in the past year Ukraine’s “economic freedom index”, a measure of good governance, went down again from an already awful level.

Zooming in

Abromavicius’ public allegations centred on MPs and high officials in Poroshenko’s clan.

He said they’d tried to force him to make dodgy appointments, such as installing Andriy Pasishnyk as deputy economy minister in charge of the defence industry.

He also said he’d file charges at the National Anti-Corruption Bureau (the NABU), a new body which started work last October.

Prime minister Arseniy Yatsenyuk endorsed Abromavicius’ allegations and said he might himself resign unless Poroshenko adopted a five-point reform plan.

Mikheil Saakashvili, a former Georgian PM who is governor of Ukraine’s Odessa region but who is eyeing Yatsenyuk’s job, also backed the Lithuanian banker.

A Viber chat

But Ukrainian journalists looking behind the scenes say all is not as it may seem.

Dzerkalo Tyzhdnya, an investigative weekly, revealed that Abromavicius had also asked Poroshenko for the resignation of Yatsenyuk, who likewise faces corruption allegations.

But Abromavicius did it while under fire for reform failures in his ministry and for lobbying for US agricultural firms.

Ukrainska Pravda, an investigative website, says Yatsenyuk had told Abromavicius he would most likely lose his post in a cabinet reshuffle in February.

The website also published screenshots of a Viber chat between Abromavicius and Pasishnyk.

The Viber chat indicated that Yatsenyuk had backed the controversial appointment. But it also showed that Abromavicius didn’t really oppose it.

The two men had a friendly exchange in which Abromavicius offered to meet Pasishnyk and promised to tell him if the defence job came up.

'Ukraine fatigue'

For some Ukrainian activists, the events recall those of 10 years ago when Orange Revolution leaders such as Yulia Tymoshenko began throwing round corruption claims to score political points.

Viktor Yushchenko, who was president at the time, sacked everybody.

It ended badly for him. His former friends and enemies, including Poroshenko, lined up against him and he lost the next election.

It also ended badly for Ukraine’s international relations. What little post-revolutionary romance there was began to give way to post-scandal “Ukraine fatigue” in EU capitals.

If you’re going, just go

Roman Sohn, a former activist in the Maidan revolution and an Ukrainska Pravda columnist, says if the young Lithuanian banker caused the new scandal just to save his own skin, then he's little better than Tymoshenko.

“Judging from the reactions from the US and EU it worked superbly. Abromavicius' future is safe. I'm just worried about the future of reforms,” Sohn told EUobserver.

“Hopefully something good comes out of it, otherwise this whole shit-storm was for nothing and public opinion has been duped.”

Abromavicius has promised not to go back into Ukraine politics, either with Yatsenyuk or Saakashvili.

“However, it’s not clear whether his resignation is final and effective or not,” Sohn said. “It seems the Russian proverb ‘Uhodia, uhodi’ - If you’re going, just go - applies in this case.”

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