April 10, 2014 / 11:18 AM / 5 years ago

Ukraine passes state procurement law to help secure IMF bailout

KIEV (Reuters) - Ukraine’s parliament passed a law on Thursday to end corruption in government purchases and promote transparency in tenders, a move aimed at helping the country to secure a $14 billion to $18 billion bailout from the International Monetary Fund.

Prime Minister Arseny Yatseniuk, presenting the law to parliament, said the government spent about 300 billion hryvnia ($25 billion) state purchases every year.

Crooked deals mean about 40 percent of the money earmarked for state purchases “stays in the corrupt pockets of the people who carry out these purchases,” he said.

The IMF threw a financial lifeline to Ukraine, whose economy is staggering after four years under ousted President Viktor Yanukovich, on condition it enacts reforms and austerity measures. Those steps are needed to get the economy back on track and avoid a debt default following months of turmoil, the IFM says.

Ukraine has already passed an anti-corruption bill, freed the exchange rate of the national currency, the hryvnia, and raised the price of gas for household consumers. Passing the procurement law was one of the last key conditions to be met.

The deal with the IMF, which was announced on March 27, should unlock further credits, for a total of $27 billion. The agreement is subject to approval by the IMF management and its executive board, which Ukraine hopes will come before the end of April.

Writing By Richard Balmforth; Editing by Larry King

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