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GISMETEO.RU
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Nation    

IMF money goes to Gazprom, external debt
Journal Staff Report

KIEV, Aug. 5 – The Ukrainian government made two massive payments worth a total of $1.1 billion on Wednesday, days after receiving $3.3 billion loan installment from the International Monetary Fund, officials said.

The payments include a $605 million transfer to Gazprom for natural gas imports in July, and a $500 million transfer to pay off a foreign debt that was due this month, Prime Minister Yulia Tymoshenko said.

Ukraine is supposed to make monthly payments for gas imports within the first week of each month, and Naftogaz Ukrayiny, the state energy company, has been struggling over the past three months while making the payments.

“Today, the government has paid ahead of time for purchases of gas,” Tymoshenko said after a government meeting. “We paid $605 million covering completely the gas purchases.”

Ukraine paid about $300 million on July 6 for importing about 1.1 billion cubic meters of Russian gas in June.

But the massive spending on Wednesday also included paying some of Ukraine’s foreign debts.

“Today the government paid half a billion [US] dollars in sovereign debt,” Tymoshenko said, adding that “the state debt has dropped by half a billion of dollars.”

The government has been struggling with collecting forecast budget revenue this year due to shrinking economy, which is affected by the global financial crisis.

The economy contracted 20.3% on the year in the first quarter, while the government had been collecting 11% less revenue compared with the original plan, according to the office of President Viktor Yushchenko.

The payments on Wednesday come five days after Ukraine has received $3.3 billion installment from the IMF, a development that has greatly improved the cash flow at the government’s disposal.

“The money has arrived on Friday,” Ihor Umanskiy, acting finance minister, said Wednesday.

Tymoshenko admitted on Wednesday that the government helped the cash-strapped Naftogaz to pay $605 million for Russian gas imports by making a transfer to the company from the budget.

But the prime minister fell short of admitting that the government had used the money from the IMF to make the payments.

“We do not separate money in the budget in terms of sources,” Tymoshenko said when asked if the government used the IMF money to pay for natural gas. “We have a joint Treasury account from which we pay. So it’s hard to say at the expense of which funds the payment has been made.”

She said the money has been transferred to Naftogaz as a rebate. Naftogaz, which is exporting services by shipping natural gas from Russia to Europe, qualifies for a rebate of value added tax like all other exporters.

The office of Yushchenko has earlier accused the government of intentionally delaying rebates to many exporters, a trick that allows the government to increase the amount of budget revenue. (tl/ez)




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