The Verkhovna Rada, Ukraine's parliament, will vote for the law on the High Anti-Corruption Court this week. The decision of the parliamentarians on the implementation of the High Anti-Corruption Court will have two scenarios for the economy: either the country will be in a state of default if the decision is not supported, or will receive the next tranche of the IMF and the favor of the internati…
The IMF has demanded to create an anti-corruption court, which will include independent experts approved by international organizations, as a condition for further lending to Ukraine and implementation of the reform program. It is expected that the law will be voted on Thursday, June 7.
If Ukraine fails to launch the Anti-Corruption Court and will not implement the IMF program, it will face serious economic consequences and outflow of foreign investment.
"The point is not even at risk of a collapse of the national currency, which everyone fears of and which preserves stability at the expense of Ukrainian workers. More scaring are populist statements that IMF money does not affect the exchange rate and that the default is not so terrible. In fact, this is not true. And the example of our company can say that the impact is very painful, - said Andrіі Smolin, the Head of Ukrainian representative office of Avellana Gold Ltd.
“The fact is that no long-term investment project can do without a leverage, which can range from 30 to 90% of the project's investment. First of all, it is about purchasing equipment through export credit agencies, which may simply not give out insurance, referring to growing credit risks. Or even with insurance, credit limits on Ukrainian banks can be reduced or closed. Moreover, this solution is not a directive, and there will be no one to complain to, as a risk manager of a foreign bank deems it necessary to optimize their credit risks geographically. And he will be right and will receive his deserved award at the end of the quarter, while a dozen investment projects in Ukraine will be frozen for several years. And those investors who were ready to provide share capital without a leverage will simply switch to other projects, the prices on the Commodity market will pass their peak and it will be impossible to return them, "- said Andrii Smolin.
“Such complicated logic will be difficult to explain to people in Transcarpathia who simply want to receive new jobs and salaries. Therefore, we sincerely hope that the authorities are well aware of it”.