On 16 November, in Kyiv and many other Ukrainian cities, protests took place on a scale not seen since 2004. In Kyiv more than thirty thousand people from throughout Ukraine protested in front of Parliament; in Khmielnitski there were around 10,000, and in at least six other cities the numbers of protesters reached several thousand. Representatives of small and medium businesses were protesting against a draft tax code being considered by parliament.
On 27 September, the Ukrainian government initiated the procedure for privatising Ukrtelekom, the monopoly player on the telecommunications market. Because of Ukraine's budget problems, the tender is to be settled before the end of this year, which limits the chances for Western investors to participate. Russian investors were nominated as potential buyers, as was Rinat Akhmetov, the richest Ukrainian oligarch, who is linked to the ruling camp.
On 9 August the IMF published the contents of a memorandum signed with the government and central bank of Ukraine. The implementation of the memorandum guarantees Ukraine US$15.1 billion as part of a new standby programme. Implementation of the provisions of the memorandum will be conducive to an improvement in the economic situation and may lead to further reaching structural and institutional reforms. The Ukrainian leadership is also gaining a political alibi; the taking of socially expensive decisions is being presented as a consequence of Yulia Timoshenko’s incompetent governments, following which it became necessary to apply for IMF funds.
At the beginning of July, the Ukrainian government and experts from the International Monetary Fund agreed the terms of a new stand-by loan. The IMF’s Board of Directors will take the final decision at the end of July. The renewal of co-operation on loans will affect the improvement of the country’s balance of payments and the financing of its budget deficit, but it will also strengthen Ukraine’s position on the international capital market. The conditions laid down by the IMF may be a catalyst for reforms to improve the situation of Ukraine’s public finances.
In mid-June Prime Minister Mikola Azarov deemed the last year’s purchase of shares of the Ilyich metallurgical plant in Mariupol by companies registered in tax havens an attempt at an illegal hostile takeover of the second largest metallurgy plant in Ukraine. This is a new position as earlier the Ukrainian government had not questioned the legality of this transaction. This shift stems from the fact that Rinat Akhmetov, the richest Ukrainian associated with the Party of Regions, is currently interested in taking over the plant.
On 2 June, the presidential committee for reforms endorsed a complex program of economic and social reforms for the period from 2010 to 2014. The programme accurately diagnoses the problems and challenges which Ukraine faces, and has systematically presented proposals for reforms. The most important question is whether this programme will be realised at all, and if it is, to what degree.
Russia has not yet succeeded in inducing Ukraine to make any important economic concessions, but Moscow has made political gains in the security sphere.