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Focus on Ukraine, October 27-November 2, 2008

November 3, 2008

Overview of this week’s political events

October 27

VR deputies failed to draft a consolidated anti-crisis bill that would include the wishes of the Cabinet of Ministers, the president and the parliamentary factions.
Recall that the parliament must approve the anti-crisis package as soon as possible in order to receive a US $16.5 bn line of credit from the International Monetary Fund.
Each of the political forces drafted their own anti-crisis proposals. Now the parliamentarians and the government officials must consolidate them. They had planned on put their proposals to vote in the parliament on October 28.
VR Speaker Arseniy Yatsenyuk assured that the parliament will work until they manage to propose a consolidated anti-crisis package.

October 28

The Yulia Tymoshenko Bloc blockaded the morning session of the VR to prevent its opponents from put the issues of financing early parliamentary elections to vote before submitting their anti-crisis proposals. The president proposed a compromise by submitting his own anti-crisis draft law for consideration by the parliament.

The Yulia Tymoshenko Bloc is prepared to support the president’s anti-crisis draft law on condition that this document is at the top of the order of the day.
Meanwhile, the Our Ukraine pro-presidential bloc claims it will not support the president’s draft law, arguing that all proposals submitted to the VR for consideration must be reviewed.
The Party of Regions is also refraining from voting in favor of the president’s draft law that they have yet to see.

Governor of the National Bank of Ukraine Volodymyr Stelmakh said that inflation will steadily grow and Ukraine will end up on the verge of default if the IMF does not grant the country the promised line of credit.
Stelmakh said the IMF will grant Ukraine financial assistance only after the the government and the parliament adopt the proposed draft law. As a reminder, Ukraine is requesting a US $16.5 bn line of credit.
As one of the leaders of the YTB Mykola Tomenko stated, if the parliament votes in favour of this draft law the line of credit will be granted for 15 years at an interest rate of 4%.

October 29

The VR adopted the president’s draft law of anti-crisis measures in the first reading.
The parliament voted after Premier Yulia Tymoshenko recalled the government’s package in the president’s favor.
The parliamentarians were faced with the choice of one of three draft laws – that of the president, the Party of Regions and Our Ukraine. The president’s proposal garnered the votes of 248 parliamentarians from the YTB, OU-PSD, the Lytvyn Bloc and two members of the Party of Regions.
This document envisages the formation of a stabilization fund, increasing the insurance fund of citizens’ deposits, measure supporting the banking and agricultural sectors, as well as the norm on freezing an increase in social expenditures for two years, with the exception of compensation for inflation. These are the requirements of the IMF.

The parliament did not allocate funds from the national budget for holding early elections. Only 222 parliamentarians voted in favor of the amendment on financing early parliamentary elections submitted by OU-PSD member Ksenya Lyapina.
In addition to that, adoption of the draft law on amendments to electoral legislation proposing the cancellation of 50% voter turnout failed to garner enough votes in the parliament. As Vyacheslav Kyrylenko informed, the Our Ukraine bloc will included the amendment on financing early parliamentary elections in the anti-crisis draft law, which is up for review in its second reading. Otherwise, the bloc will abstain from voting for this draft law.

The president said at the Ukraine-Poland Forum held in Donetsk that he will announce the exact date of elections after the parliament allocates money for holding them.
The president said today the issue of holding early elections is in the hands of the parliament.

October 30

The parliament did not consider the draft law that will mitigate the consequences of the current global economic crisis in its second reading. Parliamentary ad hoc committees failed to give their assessments of the anti-crisis package.
The amendment submitted by Our Ukraine member Ksenya Lyapina on financing early elections sparked the greatest conflict.
The head of one of the ad hoc committees Serhiy Teryokhin turned down the proposal to include the amendment in the anti-crisis draft law.
In Lyapin’s opinion, such committees do not have the right to not submit such amendments. This prompted OU-PSD to submit a complaint to VR Speaker Arseniy Yatsenyuk.

The value of the hryvnia has taken a nosedive relative to the US dollar, euro and the Russian ruble.
NBU Governor Volodymyr Stelmakh announced that the official exchange rate of the hryvnia will fall to UAH 6/US $ by the end of the year.
In addition to this, representatives of Ukraine’s central bank informed that the rate of the hryvnia will be a floating rate in the future, though the NBU promised that it will try to prevent serious fluctuations.

October 31

The parliamentarians approved the president’s package of anti-crisis measures in order to prevent the economy from collapsing. This was the main requirement of the IMF to Ukraine.
As a reminder, the parliament worked on this document since last week and was only approved in full today in its second reading.
243 members of the YTB, OU-PSD and the Lytvyn Bloc voted in favor of the anti-crisis measures.
Meanwhile, the parliament did not approve the allocation of funds to finance early elections. The amendment to the anti-crisis measures proposed by OU-PSD garnered only 189 votes.

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