Ukraine's reform push underwhelms with billions in aid on the line
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Editor's note: this article was updated to include comments from the European Commission.
Ukraine's parliament made scant progress on several reforms tied to funding from international partners during a highly anticipated parliamentary session on April 7–8.
Ukraine has missed deadlines on a range of reforms tied to international financing over the past year.
Lawmakers attempted to gain momentum during this week's plenary session, yet were only able to pass one of four new taxes required by the International Monetary Fund under a new $8.1 billion lending arrangement. The parliament also passed just one of the four bills tied to a $3.35 billion World Bank loan, despite a looming April 20 deadline.
Although the parliament fully passed three bills tied to funding under the Ukraine Facility program — potentially unlocking over $1 billion in blocked funds — Kyiv is yet to pass 18 others for which it missed the deadline.
The funds are all the more precious as Kyiv approaches a gaping hole in its finances, as Hungary stalls the 90 billion euro ($105 billion) EU loan to Kyiv.
The European Commission welcomed Ukraine's progress on reforms on April 8 in comments to the Kyiv Independent.
“We look forward to seeing further progress (…) later this month,” an EU Commission Spokesperson said, referring to the next plenary session, scheduled for the end of the month.
The two-day parliamentary vote followed weeks of tension between the parliament, government, and President Volodymyr Zelensky over stalled legislation. Parliament's dysfunction stemmed from multiple factors, including Zelensky's fragile supermajority, which exists largely on paper.
"While we did pass some laws, the Rada voted for less than half of what we expected," said Volodymyr Tsabal, lawmaker for the opposition party Holos.
"It shows that the parliament is able to vote, but I wouldn't assess this week's result as positive," he added.
The parliament on April 8 did make some progress on a new tax on digital platforms — an IMF condition — approving a first version. The parliament will likely have a second and final vote in the next plenary session.
Pressure on Kyiv to move on reforms has mounted in recent weeks. Brussels explicitly highlighted this week's plenary session as a chance to make progress on the reforms, while a high-level IMF conference in Washington D.C. will see Ukrainian officials hold meetings with fund officials.
One of the IMF conditions — changes to Ukraine's simplified tax regime for self-employed entrepreneurs — is yet to be approved by Ukraine's government.
The IMF is pushing for the change, saying it will improve revenue collection and bring more of the economy out of the shadows. But the changes are widely unpopular across Ukrainian society.
The next opportunity to move forward on reforms will be at the plenary session at the end of April.
