Speech of Natalie Jaresko at the briefing with Prime Minister of Ukraine Arseniy Yazenyuk and US State Secretary of the Treasury Jacob Lew

11/13/15

Mr. Lew, Mr. Prime Minister, dear journalists,

on behalf of the Ministry of Finance, the Government of Ukraine and all citizens of Ukraine I want to say “thank you” to my colleague, Mr. State Secretary Jacob Lew for his visit to Ukraine which reaffirms the active support provided by the United States of America to the reform process in Ukraine. We appreciate this visit as an important sign of partnership and support as well as acknowledgement of tremendous work which has been done to return the Ukrainian economy to recovery and growth. This meeting also demonstrates that our partners are aware that we must continue our hard way.

As a part of this support, the US Government has already provided Ukraine loan guarantees amounting $2b including $1b in 2014 and $1b in the current year. Ukraine and the USA are now negotiating on the terms of a third loan guarantee for Ukraine for further $1b. This third loan guarantee will depend on Ukraine’s reform progress and hence the further cooperation of our country with the IMF.

This year our Government has achieved a considerable progress in our reforms:

(1) Now we live up to our financial capacities, fulfill all public social welfare obligations towards our citizens and supply our armed forces without increasing the budget deficit;

(2) We have changed our regulations on public spending – we have stopped huge subsidies to inefficient branches and state-owned enterprises and re-directed a major part of the funds to those who really need support from the state including the most vulnerable citizens (more than 4m households will be receiving subsidies to pay for municipal utilities);

(3) We have agreed a support program with the IMF amounting $17.5b for next four years. We have been strictly following our obligations and have already received $6.7b in financial support this year. We are implementing the IMF program which enables us to receive support from other international partners including the USA.

(4) We restructured our external sovereign debt by immediate write off of $3b of our debt burden.

(5) We move towards more transparency in the Government. Our first high-quality projects are proving that. Among these projects are: new National Police, electronic procurement, open budget project E-Data.

(6) We improve the quality of public services for citizens and business (by introduction of on-line services, radical restructuring of the State Fiscal Service).

(7) We work on development of the Tax Reform which has three main goals: to reduce tax burden for business, reduce administrative burden and making fair and equal rules of the game in order to restore justice among all groups of taxpayers.Nevertheless we have lot of work ahead of us.

In particular, the Government plans to submit a package of laws to the Parliament within the next few weeks. These laws will include the 2016 State budget draft law which is based on the new tax base and will also reduce public expenditures. This reduction is supposed to be done through the structural reforms in a broad number of fields.

Approval of the balanced 2016 budget, as well as implementation of other reforms, agreed in the Memorandum with the IMF, will allow Ukraine to receive almost $4b of financial support, including US loan guarantees amounting $1b and the new IMF tranche amounting $1,7b.

This $4b financial support will help to strengthen our international reserves now equal to $13b.

We are thankful to the US Government for the support of our country in such an important period. And we sincerely thankful to the Mr. State Secretary Lew for his active support of Ukrainian reforms process.

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