Behind the scenes of the EU and IMF backlash on Ukraine

The IMF i has joined EU ministers in piling pressure on Ukraine to fight corruption. But the shock resignation of an EU fixer, which prompted the backlash, may not be all it seems.

Ukrainian president Petro Poroshenko i phoned International Monetary Fund (IMF) chief Christine Lagarde i on Wednesday (10 January) to promise her “a roadmap of … top-priority reforms”.

He added that Kiev needed a government reshuffle, but without early elections, which would “only deepen the political crisis”.

She said after the call that he had “reassured me of his unwavering commitment to reforms, including improving governance and fighting corruption”.

The exchange came after she had said earlier the same day: “Without a substantial new effort to invigorate governance reforms and fight corruption, it is hard to see how the IMF-supported program can continue.”

The IMF is contributing $17.5 billion to a $40 billion international rescue package, which also includes at least €11 billion ($12.5bn) of EU money.

The Washington-based lender had in any case delayed payment of a $1.7 billion tranche since last October.

But Lagarde’s statement came after Lithuanian banker Aivarus Abromavicius, who had been posted to Kiev as its economy minister, resigned last week citing corruption in Poroshenko’s inner circle.

The resignation prompted Lithuanian foreign minister Linas Linkevicius to tell EUobserver that Ukraine’s EU visa-free deal was at risk.

Danish foreign minister Kristian Jensen told the Reuters news agency that if Ukraine “doesn't come through” with reforms “it will be very difficult for Europe to continue united in support for sanctions against Russia”.

The row comes shortly before Dutch people in April vote in a non-binding referendum on whether to throw out the EU-Ukraine free-trade treaty.

The dispute “plays into hands” of Russia, Linkevicius warned.

But corruption is in itself bad for the Ukrainian people, who struggle on average wages of €160 a month and pensions of €67 a month.

The Heritage Foundation, a US think tank, has said that in the past year Ukraine’s “economic freedom index”, a measure of good governance, went down again from an already dire level.

Zooming in

Abromavicius’ allegations focused on MPs and high officials in Poroshenko’s circle.

He said they had tried to force him to make dodgy appointments, such as installing Andriy Pasishnyk as deputy economy minister in charge of the defence industry.

He also said he would file charges at the National Anti-Corruption Bureau (NABU), a new body that started work last October.

Prime Minister endorsed Abromavicius’ allegations and said he might also resign unless Poroshenko adopted a five-point reform plan.

Mikheil Saakashvili, a former Georgian PM who is now governor of Ukraine’s Odessa region, also backed the Lithuanian banker.

Behind the scenes

But Ukrainian journalists looking behind the scenes say all is not as it may seem.

Dzerkalo Tyzhdnya, an investigative weekly, revealed that Abromavicius had also asked Poroshenko for the resignation of Yatsenyuk, who himself faces corruption allegations.

But Abromavicius did it while under fire for reform failures in his ministry and for lobbying for US agricultural firms.

Ukrainska Pravda, an investigative website, published screenshots of a Viber chat between Abromavicius and Pasishnyk.

The screenshots indicate that Yatsenyuk backed the controversial appointment. But they also show that Abromavicius did not really oppose it.

The two men had a friendly exchange in which Abromavicius offered to meet him and promised to tell him if the defence job came up.

Ukrainska Pravda also reports that Yatsenyuk had told Abromavicius he would most likely lose his post in a cabinet reshuffle in February.

'Ukraine fatigue'

For some Ukrainian activists, the events recall those of 10 years ago when Orange Revolution leaders such as Yulia Tymoshenko began throwing around corruption allegations to score political points.

Viktor Yushchenko, who was president at the time, sacked everybody.

It ended badly for him. His former friends and enemies, including Poroshenko, lined up against him and he lost the next election.

The events also harmed Ukraine’s EU standing. Post-revolutionary romance slowly gave way to post-scandal "Ukraine fatigue".

Uhodia, uhodi

For Roman Sohn, a former activist in the Maidan revolution and an Ukrainska Pravda columnist, if Abromavicius ends up using the scandal to get a new top job in Ukraine, then the EU fixer will have harmed Ukraine for the sake of personal ambition.

“Judging from the reactions from the US and EU it worked superbly. His future is safe. I'm just worried about the future of reforms,” Sohn told EUobserver.

“Hopefully something good comes out of it, otherwise this whole shit-storm was for nothing and public opinion has been just duped.”

Abromavicius has promised not to go back into politics, either with Yatsenyuk or Saakashvili.

“However, it is not clear whether his resignation is final and effective or not,” Sohn said. “It seems the Russian proverb ‘Uhodia, uhodi’ - ‘If you’re going, just go’ - applies in this case.”