Ukraine needs extra funding beyond the $6 billion left in a suspended International Monetary Fund programme if it is to undergo deep reforms and it hopes for initial cash to come after April, top officials said on Friday. An IMF mission is in Kiev until April 2 to discuss with Ukraine's new leadership the bailout programme which was first agreed in November 2008 but suspended at the end of last year, according to Reuters. "Supporting reform of the economy is a gigantic task," Prime Minister Mykola Azarov told journalists. "The fourth tranche (of the suspended programme) of course will not be sufficient for those tasks which exist in the process of reform." Ukraine's economy shrank 15 percent last year and its banking sector was rocked after the hryvnia currency lost almost half of its value to the dollar as vital steel and chemical exports plummeted. One of the biggest problems is state energy firm Naftogaz, which is the sole importer of increasingly expensive Russian gas but is forced to sell it onto the domestic market at heavily-subsidised prices. The IMF suspended its $16.4 bailout programme in November over broken spending promises under former President Viktor Yushchenko and with political tension high ahead of the presidential election. This hit the ex-Soviet republic hard as it struggled to cope with the harsh impact of the global downturn on markets for its main exports and the cost of Russian natural gas imports. An economic aide to President Viktor Yanukovich, elected last month to succeed Yushchenko, said the IMF required the 2010 budget to be passed with a 6 percent deficit including any contributions to Naftogaz and bank recapitalisation, before it could disburse any funds. "Everything has to be done so that the budget goes through a constructive debate in parliament and receives approval," the aide, Iryna Akimova, told journalists. "If in April this task is completed, then the question of supportive cooperation could be looked at by the IMF within a month," she said, adding that the authorities were conducting "constructive" talks with the international lender. She said resumption of IMF lending could also open the door for additional borrowing of $2 billion from the European Bank for Reconstruction and Development (EBRD) and the World Bank.
