IMF Managing Director Kristalina Georgieva has said a full-fledged aid program for Ukraine is “weeks away”.
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The IMF is weeks away from finalizing a full-fledged program of support for Ukraine, the fund’s managing director Kristalina Georgieva told CNBC on Saturday.
This comes hours after The IMF said on Friday that it had reached a staff-level agreement with Ukrainian authorities, paving the way for talks on a full loan program that would support Kiev’s economy and advance its bid to join the European Union. The plan is now subject to approval by IMF management.
“Time is not Ukraine’s friend under these extraordinary conditions of war,” Georgieva told CNBC’s Hadley Gamble at the Munich Security Conference.
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“We’re talking about a number of weeks, not a very long period of time,” she added when pressed on the timeline for implementing the program.
Georgieva said the UN Finance Agency was confident that Ukraine meets its requirements on fiscal policy, governance, anti-corruption and stability in the financial sector.
“We have a country where institutions work. Where pensions are paid. Where social services are in place. Where the government is very interested in continuing to reform, even when bombs are falling,” she noted.
The program comes at a crucial time for Ukraine, which is approaching the one-year anniversary of Russia’s February 24 invasion. The IMF estimates that the country may need more than $40 billion in financial aid this year, even as Ukraine’s economy is expected to return to growth after a 30% contraction in 2022.
“Ukraine needs the IMF at this very critical time,” Georgieva said. “Why? Because the financial needs are significant: We put them somewhere between $40-48 billion for this year.”
“And two, because the country needs the political support that the IMF provides. Running a war economy is not a trivial matter,” she added.
Accelerate Ukraine’s path towards EU accession
In addition to supporting Ukraine’s economy amid the conflict, Georgieva said the reforms would also help “accelerate” Ukraine’s efforts to eventually join the EU.
The European Parliament passed a resolution calling on Ukraine to immediately grant candidate status for EU membership to Ukraine on 23 June 2022. The European Council granted the country candidate status for EU membership on the same day.
“We make Ukraine’s desire to join the European Union a priority in our work,” Georgieva said on Saturday.
“They belong there,” she added. “And the fund can, of course, help them move faster on that path.”