Ukraine finance minister: We paid the West more than we received

Natalie Ann Jaresko is not part of the new cabinet [Georgi Gotev]

Natalie Jaresko [Georgi Gotev]

Ukraine is a good payer: in the course of 2014 it has received almost 9 billion dollars of credit from the EU and its international partners, the IMF and the USA. However, the country has paid out about 14 billion dollars in debt repayments to honour its commitments, and it needs more help, Natalie Jaresko, Minister of Finance of Ukraine, told EURACTIV in an exclusive interview.

Natalie Ann Jaresko is an American-born Ukrainian businesswoman who became Ukraine’s Minister of Finance on 2 December 2014.

She spoke to EURACTIV’s Senior Editor, Georgi Gotev.

Minister, you are in Brussels for the first EU-Ukraine Association Council. What are the topics?

This is indeed the inaugural Council of our Association agreement, for us this is a major event. A year ago as you know, students and citizens of Ukraine stood outside in the freezing cold, in some cases beaten and in some cases killed, in order to stand up for their desire to have this EU Association Agreement be signed and be real. So this Council is a very important, symbolic event for us in the history that’s transpired in the past year.

For those who might be surprised by your American accent, can you say something about yourself? You were born in the United States and you became a Ukrainian citizen very recently, when you took office.

Yes, I am a Ukrainian American. I grew up in an American family in the Chicago area; both my parents are from Ukraine. We were raised speaking Ukrainian, we were raised in the Ukrainian church, we were raised in the Ukrainian tradition and culture, and then I had the opportunity to live and work in Ukraine and I moved to Ukraine in 1992. So I have been working and living there for about 22 years.

Prime Minister Arseny Yasenyuk said yesterday that Ukraine needs EU help “not today, but yesterday”. What does he mean?

We are living through a very very complex financial and banking crisis, there is no question. This is a crisis that’s been caused firstly by the illegal annexation of Crimea, which represented almost 5% of GDP. Secondly, the war in the east, in Donbas, which represents 10-15% of GDP. The war is costing us, as you can well imagine, in humanitarian costs, in infrastructure, approximately 200 million dollars per month in subsidies, because we are providing electricity, gas, water, without being paid.

And not to diminish in any way the human cost, the loss of lives, the wounded soldiers, the civilians and military that have been lost is enormous. That, on top of years of economic policies that were, frankly speaking, less than transparent, has put the economy in a difficult situation.

The EU and our international partners, the IMF, the USA, have been very helpful in the year of 2014. We have received almost 9 billion dollars of credit. However, we have paid out about 14 billion dollars in debt repayments to honour our commitments. So during an economic crisis with the balance of payments crisis, when we have paid out a good deal more than we have received, it is a very difficult moment for us. That said, we are clear about the reforms we are undertaking, we are clear about the road we are going down, we see the light at the end of the tunnel and we need the support of our partners going forward in a big way, to give us a breath of fresh air that we need, to have the time to implement these reforms and return in 2016 to economic prosperity.

What form will this aid take? Will there be a donor conference?

There is a great deal of discussion. You probably heard about a potential support or donor conference, I think that’s all under discussion. The type of support is also under discussion. As I sit here today, we have an IMF mission working with us to ensure our 2015 budget takes into account the kind of austerity measures and structural changes that are necessary to kick off 2015 in the right way.

Do you think that there is political will on the part of your Western partners, and especially the EU?

I do. I believe we had a very supportive reception yesterday, and our western partners are looking forward to the new government led by Prime Minister Yatsenyuk to act quickly, and to move beyond the words and programmes and plans and show that we are serious and that this is something that we want to do. We are not doing it for third parties; we are doing it for ourselves and for our country. We have received a great deal of support. One thing is that we have received 500 million euro of macro financial assistance within the first week of the new government, so that was a very big sign of support. The IMF returned to work with our government within a month of their last mission. Again, I find those things to be not just symbolic support, but real support, where people are investing their time and money in coming to Ukraine, working with us and enabling is to move quickly to restore, renew and recover the Ukrainian economy.

You are minister of finance, not energy, but I am going to ask you about gas, because gas costs money, and in the past, when Ukraine was unable to pay, Russia simply stopped the gas from flowing, leaving parts of Europe in the cold. What are the guarantees that there will be no gas crisis for Europe this winter?

I can only guarantee from the Ukrainian side of the equation. The Ukraine has entered into an agreement with the EU’s support and advice, as you know, and we are making payments on a timely basis. We have made one already since my entry into office and another one is due by the end of this year. We will abide by our contracts.

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