Kiev is against raising household utility charges and housing maintenance fees as a condition set by the International Monetary Fund to provide a new loan tranche, Vice Premier and Social Policy Minister Serhiy Tyhypko said on Wednesday.
“Neither the government nor the president is ready to raise tariffs, and this is the main problem in the negotiations with the International Monetary Fund,” Tyhypko said, adding that the Ukrainian government was working out alternative proposals to resume cooperation with the IMF without raising utility charges and housing maintenance fees.
The IMF is insisting on higher domestic gas prices, but the Ukrainian government hopes to keep tariffs unchanged, in expectation of an agreement with Russia in the near future on lower gas contract prices. The IMF has also insisted on unpopular pension reform, which Ukraine has partially implemented by increasing the retirement age.
“The IMF positions on tariffs remain very tough,” Tyhypko said.
In July 2010, the IMF approved a $15.15-billion standby loan for Ukraine "in support of the authorities' economic adjustment and reform program."
Ukraine has so far received two tranches worth a total of over $3.4 billion. The provision of further aid was suspended in December 2010.
“In such a difficult time, I believe it to be bad for the country to remain without the support of international organizations,” he said, adding that the country could do without the IMF funds.
“But this would be negatively perceived by domestic and foreign investors,” he said.
