VZCZCXRO4081
OO RUEHDBU RUEHSL
DE RUEHKV #0103/01 0211327
ZNY CCCCC ZZH
O 211327Z JAN 10
FM AMEMBASSY KYIV
TO RUEHC/SECSTATE WASHDC IMMEDIATE 9174
INFO RHMFISS/DEPT OF ENERGY WASHINGTON DC IMMEDIATE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC IMMEDIATE
RUEATRS/DEPT OF TREASURY WASHINGTON DC IMMEDIATE
RUCNCIS/CIS COLLECTIVE
RUEHZG/NATO EU COLLECTIVE

C O N F I D E N T I A L SECTION 01 OF 02 KYIV 000103 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR EUR, EUR/UMB, EEB/OMA 
 
E.O. 12958: DECL: 01/20/2020 
TAGS: EFIN EREL ETRD PGOV PINR UP XH
SUBJECT: IMF AGAIN DISMAYED BY UKRAINIAN AUTHORITIES 
 
REF: KYIV 89 
 
Classified By: Acting Economic Counselor Kaye Lee for Reasons 1.4 (b) a 
nd (d) 
 
¶1.  (C) Summary.  IMF resident representative Max Alier 
expressed frustration and dismay at the GOU's recent public 
statements falsely announcing the impending arrival of an IMF 
technical assessment team.   Alier said the GOU had resorted 
to "pressure tactics" and that Deputy Prime Minister Nemyria 
and Acting Finance Minister Umanskiy had been behaving 
"erratically" since mid-December.  Alier further noted that 
last week's GOU delegation to Washington, led by Deputy 
Finance Minister Myarkovskiy, had been devoid of an obvious 
goal.  IMF's "best case scenario" for re-engaging Ukraine's 
authorities includes re-starting talks with the new 
President's transition team in mid-February and sending an 
IMF mission team as early as mid-March.  Alier privately 
agreed, however, that such a timeframe might be overly 
optimistic given concerns about post-election court actions 
and other related delays.  End Summary. 
 
IMF "BAFFLED" AT GOU ANNOUNCEMENT 
--------------------------------- 
 
¶2.  (C) Alier told Econoff on January 20 that the Fund had 
been "baffled" at Deputy Prime Minister Nemyria's January 19 
public statement that the IMF was sending a technical team to 
Ukraine in the coming days.  After immediately and directly 
rejecting this possibility with Ukraine's Cabinet of 
Ministers, Alier said he was "shocked" when Acting Finance 
Minister Umanskiy repeated the same claim to journalists the 
following day.  Alier said he had been left with no other 
choice than to refute the GOU's story in an interview with a 
local business daily. 
 
¶3.  (C) The IMF had come to the conclusion that Nemyria and 
Umanskiy were suffering the effects of heavy pressure from 
Prime Minister Tymoshenko over the economy and the 
presidential election.  Nemyria particularly was singled out 
by Alier for his erratic behavior since mid-December 2009. 
 
IMF UNCERTAIN ABOUT RECENT GOU DELEGATION 
----------------------------------------- 
 
¶4.  (C) The Fund also had been confused about the purpose of 
last week's GOU delegation to Washington, led by Deputy 
Finance Minister Myarkovskiy, especially since it had come so 
soon after Nemyria and Umanskiy's own highly publicized 
visits.  Alier said the IMF had appreciated information 
passed by Myarkovskiy to the Fund's budget experts, but noted 
that the trip had seemed "highly unnecessary" without any 
other clear goal or message.  Alier concluded that Nemyria 
had dispatched Myarkovskiy to Washington as a response to 
pressure from Tymoshenko to "do something" about Ukraine's 
off-track loan program.  (Note: Umanskyi told the Ambassador 
that the team had been dispatched to Washington to work out a 
way for the GOU to access $2 billion in reserves at the 
National Bank.  See Reftel.  End Note.) 
 
BEST CASE SCENARIO FOR RE-ENGAGEMENT 
------------------------------------ 
 
¶5.  (C) Alier said the Fund had been operating under a "best 
case scenario" in its planning for further negotiations in 
Ukraine.  The IMF was prepared to send technical advisors to 
meet with the new President's transition team in mid-February 
and had slated mid-March for the arrival of a full mission 
team.  New IMF mission director Athanasios Arvanitis would 
have the mandate to take a "fresh look" at Ukraine's economic 
jQQCQXM1QtQQ[