Q: What will the challenges be for Ukraine's government in implementing the measures agreed with the International Monetary Fund (IMF) in July 2010 as part of the $15.15bn standby agreement?
A: It is not the IMF [measures that are the problem] but the impact of the crisis and the mistakes of the previous government that are forcing us to take unpopular measures. In 2009, the budget deficit amounted to at least 13% of gross domestic product [GDP]. The public debt of Ukraine is growing rapidly. In 2007, we had about Hrv100bn [$12.6bn] of foreign debts; two years later, at the beginning of 2010, this had increased to Hrv316bn. Our external debts amounted to 12% of GDP and then grew to 36% of GDP. This figure is critical for us. If we do not change anything we will get into the same situation as Greece, Romania and Hungary. This will mean rises in prices, currency devaluation and sharp cuts in public spending, including cutting public sector staff, salaries and pensions. To prevent this, we need to understand our main challenges.
