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29/09/2016

Telephone talks in ‘Normandy format’ held over Ukraine

Europe's East

Telephone talks in ‘Normandy format’ held over Ukraine

French President François Hollande

[Présidence de la République]

The leaders of France, Germany, Russia and Ukraine held talks on Thursday (23 July) over the conflict in east Ukraine, with all sides calling for the full implementation of a ceasefire deal, the French presidency said.

The phone conversation in the so-called ‘Normandy format’ between François Hollande, Angela Merkel, Vladimir Putin and Petro Poroshenko came a week after similar four-way talks. The first talks in this format were held on the occasion of the celebration of the D-Day in Normandy in June 2014.

>>Read: France invests in D-Day to bring a thaw in Ukraine crisis

On Thursday, the leaders “agreed on the importance of respecting pledges undertaken in Minsk in February”, the presidency said in a statement, referring to the truce deal struck in the Belarussian capital.

These included “the withdrawal of heavy weapons from the line of contact, the complete implementation of the ceasefire and access to the OSCE’s special observer mission”.

The leaders also “welcomed the intention of the parties to discuss on 28 July local elections and the decentralisation regime”.

“The importance of having a single date for the organisation of local elections in the whole of Ukraine – including some sectors of the regions of Donetsk and Lugansk – was underlined,” added the French presidency statement.

The Minsk deal had agreed to grant temporary autonomous status to the rebels controlling parts of east Ukraine, but it had struck a note of disquiet among many lawmakers in Kyiv.

IMF bailout tranche

The International Monetary Fund signaled yesterday it could release $1.7 billion (€1.55 billion) in bailout funds next week to Ukraine, as the country reels from civil war and seeks private-sector debt relief.

The IMF executive board is tentatively scheduled to meet on 31 July to decide on the second disbursement of the country’s four-year support package, said Fund spokesman Gerry Rice.

Approval of the payout is “possible provided our usual conditions are met”, Rice said at a regularly scheduled news conference.

In early July, the IMF said that the second disbursement would come after completion of certain, unspecified actions and in conditions that would allow IMF staff to assess whether Ukraine’s public debt is sustainable “with high probability”.

The IMF awarded Ukraine a four-year, $17.5 billion support program in March, as its economy neared collapse after more than a year of civil war; an initial $5 billion was released.

The Washington-based institution, with 188 member nations, originally conditioned its aid program on the country achieving a deal with private creditors that would reduce its debt payment burden by $15.3 billion over the coming four years.

Kyiv has sought a write-off of some of the debt but the Ad Hoc Committee of Ukraine’s Bondholders – mainly four US investment and hedge funds – say that lengthening the payment period on the debt would be enough to achieve the goals.

“The authorities and the ad hoc creditors committee have been making good progress in their discussions,” Rice said, although no formal agreement has been reached.

“Further progress is expected by 31 July,” Rice said.

The IMF spokesman meanwhile warned that Kyiv should “avoid policy reversals” on reforms demanded by the IMF in exchange for the bailout.

Asked about the IMF’s seeming easier bailout approach with Ukraine compared with its hard line on Greece, Rice noted that they were “two very different countries — very different set of circumstances”.

“The government there (Ukraine) has made a commitment, they’ve been implementing reforms, there’s been a lot of progress there,” he said.

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