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Focus on Ukraine, December 22-28, 2008

December 29, 2008

Overview of political events of the week

December 22

First Vice Premier Oleksandr Turchynov informed that the government will submit the draft of the national budget and the package of anti-crisis documents to the parliament on December 23.  
The Cabinet of Ministers proposes amending tax legislation to increase revenues to the state treasury, suspending tax breaks for members of parliament, introducing a real estate tax for the wealthy and financial sanctions for unlawful use of land.
As a reminder, VR Speaker Volodymyr Lytvyn forewarned that the parliament must adopt the 2009 National Budget before the end of the year.


Assistant Presidential Secretary Oleksandr Shlapak stated that the National Bank of Ukraine can rectify the situation on the domestic currency market.
Shlapak said that although the president is opposed to the resignation or dismissal of the NBU management, he presumes that the central bank is partially to blame for the devaluation of the hryvnia.


The National Movement of Ukraine (Rukh) party undergoes another schism.  
At one time the party expelled several leaders in provincial centers and suspended the membership of deputies Yaroslav Kendzior and Ivan Stoiko, who countered the formation of a coalition between the OU-PSD, YTB and the Lytvyn Bloc.
As a reminder, these deputies stated that Borys Tarasiuk personally approved a decision to join the coalition without consulting with his faction.

December 23

Premier Yulia Tymoshenko presented the national budget to the parliament.
Although the Cabinet of Ministers plans to render assistance to Ukrainian banks in 2009, it does not plan to raise the subsistence level. Next year it will remain at the 2008 level of UAH 669 and, accordingly, the minimum wage will be lower than the subsistence level.  
Tymoshenko admitted that this budget is not ideal and appealed to the opposition to cooperate with the government. In turn, the opposition described the government’s draft budget “as robbing the country blind and impoverishment of the people”. 
Some members of OU-PSD suggested elaborating the national budget. The Verkhovna Rada accepted the draft for consideration in the first reading on Thursday.


The president of Ukraine criticized the draft budget and urged the Cabinet of Ministers to fundamentally change its budget policy.  
President Yushchenko said that the macroeconomic indicators the government is proposing could be a big ‘can of worms’ for the 2009 National Budget. The head of state further noted that the budget is imbalanced and will lead to a shortage of funds in local budgets.

December 24

The Kommersant-Ukraine newspaper informed that lawyers of the YTB have drafted a document for the impeachment of President Viktor Yushchenko. 
Vice Speaker of Parliament and member of the YTB Mykola Tomenko denied such information. The YTB stated it did not prepare any documents about impeachment, explaining that it is merely demanding that the president acknowledge the fact that he has lost the trust of the Ukrainian people.     
At the same time, the Party of Regions upholds a Constitutional method of stripping the president of his powers and is convinced that the fabricated social impeachment is one step away from becoming reality.    
In his turn, VR Speaker Volodymyr Lytvyn initiating the impeachment of the president is impossible.


Premier Yulia Tymoshenko accused President Viktor Yushchenko of complicity in currency gerrymandering and demanded that the president to step down from office.   
Tymoshenko said Yushchenko’s plan is to drive the country into default and then declare a state of emergency, which would render the holding of new elections impossible.


Premier Yulia Tymoshenko is demanding the resignation of the NBU senior management. The head of the government is accusing NBU Governor Volodymyr Stelmakh of taking actions aimed at devaluing the hryvnia. She said that certain commercial banks were allocated funds that they cannot repay to the national budget.  
Recall that the premier recently made public a corruption conspiracy between the NBU and commercial banks. Tymoshenko is convinced that a new governor of the central bank can bring the hryvnia back down to its substantiated value of 6.50 to the US dollar.

December 25

The Verkhovna Rada did not approve the 2009 National Budget in its first reading.
Those deputies that voted in favour were short by three votes. The draft budget was submitted back to the government for revision, though the parliament has only one working day left.    
As a reminder, the president and the speaker of the Verkhovna Rada insisted several times that Ukraine see in the New Year with an adopted budget.

December 26

The Verkhovna Rada adopted the Law “On the 2009 National Budget of Ukraine.
As the UNIAN news agency reported, 226 of the 353 deputies registered in the session hall voted in favor of the budget.
All members of the Communist Party of Ukraine abstained from voting, while only four members of the Party of Regions – Taras Chornovil, Vasyl Hrytsak, Volodymyr Hureyev and Petro Korzh – voted in favor.
All deputies of the YTB and the Lytvyn Bloc supported the draft budget and 46 members of OU-PSD voted in favor.  
Ivan Plyushch, Arseniy Yatsenyuk and deputies of the Yedyniy Tsentr (United Center) and Za Ukrainu (For Ukraine) abstained from voting.
The national budget envisages a deficit of UAH 31 billion, or 3% of the GDP. The revenues of the 2009 budget are set at UAH 238 billion, while expenditures are set at UAH 266 billion.


The parliament dismissed Valentyna Semeniuk-Samsonenko from her post as the head of the State Property Fund.
In addition to that the deputies expressed non-confidence in NBU Governor Volodymyr Stelmakh and are demanding that the president dismiss the head of the central bank.
Today the parliamentarians also adopted in the first reading a draft law for creating an ad hoc committee envisaging the procedure for impeachment of the head of state.

December 27

The party Our Ukraine expelled at its congress seven of its members that joined the coalition of factions of the YTB and the Lytvyn Bloc. 
The party also made amendments to its statute legalizing President Yushchenko as its leader. From now on there will be “a head of the party – political leader of the party”, who will fulfil his authority based on civil principles and will not be a member of the party’s founding body. President Yushchenko will assume this position.


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