Ukrainian Prime Minister Mykola Azarov has said that "we will have a very difficult round of negotiations" with the International Monetary Fund (IMF) on the revision of the cooperation program. He announced this at a Cabinet of Ministers meeting on Wednesda, according to UKRINFORM.

Azarov said that the IMF had noted financial stability and economic growth in Ukraine. However, he said that the requirements for the continuation of the program remained fairly tough.

"The IMF insists on tough approaches to the fiscal policy. On the other hand, we have our own vision, for example, regarding a reduction in the tariffs for heat and energy to the level of market-oriented prices," the prime minister said.

Azarov noted that during negotiations, the Ukrainian government is trying to convince the IMF that it is inexpedient to substantially increase the tariffs at one time: "We insist on a gradual change in tariffs during 2011, in accordance with the current market realities, first and foremost, in order not to disrupt economic growth and not to reduce the purchasing power of the public. This is a priority for us."

At the same time, he noted that IMF funds, under conditions of uncertainty on foreign markets, were currently a crucial factor for the stability of the financial situation in Ukraine.

As UKRAINFORM reported, an IMF mission led by Thanos Arvanitis is on a visit to Kyiv on February 1-11 to hold talks on the second review of the program of cooperation for the provision of the third tranche of a loan from the IMF to Ukraine.

On February 4, Prime Minister Azarov said he hoped that the conditions for the continuation of Ukraine's cooperation with the International Monetary Fund under a stand-by program would be reviewed.

In November 2008, the IMF decided to allocate a USD 16.4 billion loan to Ukraine under a stand-by program.

In 2008-2009, Ukraine received three tranches of a loan, worth a total of USD 12 billion. The country expected to get the fourth tranche, worth USD 3.8 billion, in November 2009, but the funds were not allocated because of the presidential elections in the country.

The new government, under agreement with the IMF, closed the current credit line and started to cooperate with the fund under a new program.

The program of cooperation between Ukraine and the IMF, approved in July 2010, foresees the provision to Ukraine of a USD 15.15 billion loan. The program will last two-and-a-half years. Funds are raised at an interest rate of 3.5% per annum.

Shortly after the approval of the program of cooperation, Ukraine received the first tranche of the loan, worth USD 1.89 billion.

The Executive Board of the International Monetary Fund at a meeting on December 22, 2010 decided to give Ukraine the second tranche of the stand-by loan, worth SDR 1 billion, or USD 1.5 billion.

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