IMF says will give cash if Ukraine finances deficit

[Beet]

KIEV, Feb 27 (Reuters) - The IMF will release the second tranche of a $16.4 billion loan to Ukraine if Kiev proves it can finance a budget deficit, the Fund's resident representative Max Alier was quoted as saying on Friday.

"Our position now is such that if the government can agree on securing additional financing for its deficit, we will be pleased to release the second tranche," Interfax Ukraine news agency quoted Alier as telling a conference.

The 2009 budget passed by parliament before the New Year provides for a deficit equal to 3 percent of gross domestic product, while the International Monetary Fund had stipulated that the loan was contingent on a balanced budget. (Writing by Ron Popeski; editing by David Stamp)

http://in.reuters.com/article/asiaCompanyAndMarkets/idINLR36558320090227

Also, it looks like the crisis is forcing the government together-

Yushchenko: IMF to get Ukraine's consolidated program next week

The Ukrainian state agencies concerned and political parties will prepare their concerted positions on unsettled problems and submit them to the International Monetary Fund's office in Washington next week, said Ukrainian President Viktor Yuschenko in his letter to IMF Managing Director Dominique Strauss-Kahn.

In his letter, the Ukrainian president also pledged that a number of laws the necessity of whose adoption was stressed by the recent IMF mission would be tabled in the Ukrainian parliament. In Yuschenko's opinion, this will make it possible to considerably lower the deficit of Ukraine's national budget for 2009.

"Making such steps Ukraine displays its readiness to restart a dialogue with the International Monetary Fund," said the president.

The president thanked Strauss-Kahn for "the understanding of how the current economic situation in Ukraine is complicated and for the readiness to renew a dialogue with the Ukrainian side on the review of the criteria of the Memorandum on Economic and Financial Policies."

Yuschenko stressed that on Friday he held a meeting with the Ukrainian prime-minister, the Central Bank's governor, the chairman of the Verkhovna Rada and a representative of the Regions Party faction whose major goal was to hammer out a common national plan to overcome the crisis, stabilize the economy and make it stronger.

According to earlier reports, participants in the above-mentioned meeting decided to set up an ad hoc group which will work out joint positions on interaction between the Ukrainian government and the NBU, and the IMF. According to Yuschenko, the group will work on the document, which should demonstrate a consolidated stance. The document will be presented and initialed at 3:00 p.m. on Monday, March 2

http://www.kyivpost.com/nation/36409

[2952-0-0]

So all the countries with access to credit are ratching up huge deficits to finance stimulus spending.

Those who must go to the IMF are told to balance their budget.

Anyone else see what's amiss?

[Beet]

So all the countries with access to credit are ratching up huge deficits to finance stimulus spending.

Those who must go to the IMF are told to balance their budget.

Anyone else see what's amiss?

It's a sign of who holds the power. The more the IMF (and the IMF's European/US masters) is afraid a Ukrainian default would cascade across the Eastern European debt markets, the more willing they'll be to allow Ukraine to run a deficit.