Transparency in the selection of the head of the Deposit Guarantee Fund is one of the keys to receiving IMF financial assistance

Ukraine is in critical need of international financial support. Loans from the International Monetary Fund (IMF) play a crucial role in the stability of the state budget and economic development of the country. The conditions under which Ukraine can receive a loan from the IMF not only affect relations with this institution, but are also key to securing further assistance from other international partners, such as the European Union and the United States, UNN writes.

IMF financial assistance is an indicator that Ukraine remains on the path of reforms and adheres to its international commitments. The IMF program provides Ukraine with access to significant financial resources that are essential for maintaining macroeconomic stability and recovery from the war. Without this support, our country may face significant difficulties, including losing the trust of investors and allies.

According to Oleh Ustenko, a former advisor to the President of Ukraine and economic expert, cooperation with the IMF is a kind of signal to other foreign lenders and investors to cooperate.

"I would say this: cooperation with the IMF is one of the key cooperation with international financial institutions for any country and Ukraine in particular, especially in such a time as we are going through now. When we have a huge state budget deficit and when our state budget expenditures are covered by our allies and partners as a result of the war, it is simply necessary to have a guarantor of this in order to show everyone that the macroeconomic situation is not only under the control of our government here, but it is also under the control of our international partners, such as the IMF," Ustenko said.

Experts are confident that the government realizes the importance of continuing cooperation with the IMF, and therefore will make every effort to fulfill the conditions set by foreign creditors. 

In particular, in order to receive further funding, Ukraine must implement changes to improve the functioning of its rule of law institutions, increase the independence of anti-corruption bodies, and increase transparency in public administration.  

The next IMF mission will start working in Ukraine in September. It will take place in the context of preparations for the fifth review of the Extended Fund Facility program. It is planned that expert discussions will focus on Ukraine's compliance with the terms of the Memorandum of Economic and Financial Policies.

In Ukraine, the IMF pays special attention to holding a transparent and open competition for the position of the Managing Director of the Deposit Guarantee Fund (DGF). This is an important step to ensure confidence in the banking system and to ensure the stability of citizens' deposits. 

Currently, the head of the Fund is appointed by the administrative board in a closed session. It includes representatives of the National Bank and the Ministry of Finance. However, according to Ustenko, the IMF has long been demanding that Kyiv change its approach to personnel policy.

The partners emphasize that the leadership of state bodies should be elected in open and transparent competitions with the participation of international observers.

Earlier, Ukraine has already promised the IMF to develop a procedure and appoint a new managing director in the spring of 2025. To do this, the relevant amendments to the legislation need to be developed and voted on in the Verkhovna Rada.

Experts interviewed by UNN say that Ukraine will be able to fulfill the "beacons" in time. of the International Monetary Fund and receive funding.

"Now half of Ukraine's budget is external financing, and most of it is from the IMF. Therefore, the state is forced to do all these important things, all the anti-corruption things, the rules that minimize black schemes, things that have not been done for decades, are now being done quite quickly. So, we think that everything will be done. And we will receive the tranche - we have no other options," said economist Oleg Getman.

At the same time, after Svitlana Rekrut was dismissed from her position as Managing Director of the Deposit Guarantee Fund, everything indicates that the National Bank and the DGF's administrative board are planning to slip between the cracks and appoint a new head in closed mode before the amendments to the legislation come into force.

According to media reports, the regulator has already identified the main candidates. In particular, Pavlo Polarush, head of the National Bank's Department for Work with Troubled Assets, may head the Fund. It is possible that this haste is due to the fact that a National Bank official would not be able to win a transparent competition.

Indeed, as the journalists found out, Polarush repeatedly traveled abroad after the start of Russia's large-scale invasion of Ukraine. In particular, the journalists reported that in November 2022, he received permission to leave the country from the odious former Deputy Minister of Defense, who is currently a suspect in corruption crimes. The permit was allegedly issued to Polarush to travel abroad in an elite Lexus car to receive humanitarian aid. However, it is not yet known on what grounds Polarush traveled abroad from February to November 2022.

Member of the Verkhovna Rada Committee on Transport and Infrastructure Mykola Velychkovych believes that law enforcement should investigate Polarush's travels abroad. And a member of the Verkhovna Rada Committee on National Security and Defense, Hennadiy Kasai, does not rule out that Polarush may have problems during the special vetting process as a candidate for the position of managing director of the Deposit Guarantee Fund.

Thus, it seems that the new head of the DGF is being appointed in a hurry before foreign observers have a chance to influence the results of the competition.