KIEV, Oct. 21 – Ukraine’s opposition Regions Party on Wednesday accused the International Monetary Fund of conducting an “ineffective” lending program that politically supports Prime Minister Yulia Tymoshenko ahead of the next presidential election.

Mykola Azarov, a leading opposition figure and a former finance minister, met an IMF team in Ukraine to express his concerns ahead of the IMF’s decision over whether to release the next $3.4 billion installment.

“We have to state that the program of cooperation appears to be ineffective,” Azarov said in a statement after the meeting. “In this situation we can nothing but believe the IMF lending politically motivated, which finances one of the candidates ahead of the election.”

This is the strongest yet criticism from the opposition groups of the IMF, which has already disbursed about $11 billion to Ukraine since November 2008.

Ukraine depends on the IMF’s $16.4 billion Standby loan to be able to pay foreign debts this year and next, and to support the national currency, the hryvnia, which has already lost more than 50% against the U.S. dollar over the past 12 months. The loan was approved in November 2008.

But the Tymoshenko government has failed to implement most of economic reforms that had been earlier agreed with the IMF, including the refusal to hike natural gas prices from September 1.

“It’s a pity that the IMF has never listen to our warnings,” Azarov said. “Ukraine is in a serious debt adventure: over the past year the country has borrowed twice as much as in all other years.”

President Viktor Yushchenko also criticized the Tymoshenko government for the failure to reform the economy.

The IMF team arrived in Ukraine on October 12 and is expected to stay through October 24, before leaving for Washington with a report on whether Ukraine has implemented the reforms.

Bohdan Danylyshyn, the economy minister, said the government implemented 80% of reforms and policy measures that had been earlier agreed with the IMF. (tl/ez)