KIEV (Reuters) - Ukrainian lawmakers have proposed thousands of amendments to banking legislation required by the International Monetary Fund, threatening to derail an $8 billion IMF aid package needed to fight the economic fall-out from the coronavirus pandemic.

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The law, which prevents former owners of banks declared insolvent from regaining their assets, is seen as against the interests of Ihor Kolomoisky, a tycoon and early backer of President Volodymyr Zelenskiy’s 2019 presidential campaign.

Kolomoisky used to co-own Ukraine’s largest lender, PrivatBank, until it was nationalised in 2016. He has waged a long legal battle against the government to either win it back or receive compensation.

The law was passed last week but needs to be voted on again and in a version acceptable to the IMF. Lawmakers, including two who once worked for Kolomoisky’s TV channel 1+1, proposed thousands of changes that could delay its passage for months.

Zelenskiy has previously warned of the risk of default without the IMF loans, as stringent anti-coronavirus lockdown measures in Ukraine and around the world have threatened to tip one of Europe’s poorest countries into recession.

“We are forced to state that the attempt by a group of (parliamentary) deputies, one way or another affiliated with certain business circles, to ‘kill’ the bill by making more than 16,000 changes clearly goes beyond common sense,” a source in Zelenskiy’s office told Reuters.

The changes are not intended to improve the law “but rather to completely block it,” the source said, adding this would worsen “relations with our external partners during such a difficult period”.

In an interview with the Ukrainian outlet NV published on Tuesday, Kolomoisky denied asking lawmakers to put forward the amendments on his behalf. He said the bill was not against him but against the whole of Ukraine.

He and some lawmakers associated with him have said Ukraine should start negotiations with its creditors to restructure its sovereign debt.

Lawmaker Olha Vasylevska-Smahliuk, who used to work for Kolomoisky’s 1+1 channel and put forward some of the amendments, told Reuters the law in its current form contravened Ukrainian legislation and the constitution.

She said Ukraine was being held “hostage” to pass the banking law by the spectre of default. “I do not see a direct connection between the adoption of this law and default.”

The leader of Zelenskiy’s faction in parliament, Davyd Arakhamiia, told Reuters that voting on the amendments could take 2-3 months at least unless another solution was found.

One option was to try to persuade the lawmakers putting forward the amendments to drop them. Another would be to try to vote on the amendments in clusters, to speed up the voting.

But Nikita Poturaev, another lawmaker in Zelenskiy’s party, told Reuters that trying to bunch the amendments together would be difficult as it needed the approval of a committee where lawmakers associated with Kolomoisky wield influence.