KYIV. Oct 19 (Interfax-Ukraine) – Finance Minister of Ukraine Natalie Jaresko has called on the government and society to discuss how to reduce budget expenses in 2016.
“The ministry is ready to reduce budget expenses, but the issue of what expenses are to be reduced and what should not to be reduced requires serious discussion by the public and it also requires hard political decisions. Today, only tax rates are being discussed, and no one proposes concrete changes to expenses,” she told reporters last week.
Jaresko said that the planned tax reform should not result in the increase of the budget deficit in 2016 compared to 2015.
“The budget deficit of 3.7% of GDP is our benchmark for next year,” she said.
She said that the tax reform model proposed by the Finance Ministry includes the reduction of revenues by UAH 60 billion, and expenses should be also cut by UAH 60 billion.
Jaresko said that the structure of consolidated budgets foresees the largest sums for security and defense, servicing of the state debt is second, and social payments, medicine and education is third.
Other tax reform models foresee the reduction of revenues by 25%, but this would entail the necessity of reducing expenses by 25%.
The finance minister presented information from the International Monetary Fund (IMF), according to which over the past 25 years the global economy had only 10 cases when a country cut expenses by over 5%. The average reduction of expenses was around 9%.
“To cut revenues by one fourth as some options of the reform propose and not to cut budget expenses is suicidal for our country,” she said.
Jaresko said that this would mean the termination of cooperation with the IMF and forced quantitative easing.
“I remember that the hyper-inflation of early 1990s was caused by this approach,” the minister said.
Jaresko believes that the simple reduction of tax rates would not give momentum to Ukraine’s investment attractiveness.
She also said that the IMF insists on reducing the budget deficit in 2016 to 3.7% of GDP from 4.1% of GDP in 2015 and refuses to agree to any tax reform without realistic compensators of the reduced budget revenue.
KYIV. Oct 19 (Interfax-Ukraine) – Ukraine’s President Petro Poroshenko has said that he will meet with the leaders of the parliamentary factions and hold a meeting of the National Reform Council next week to discuss the implementation of measures required to secure a visa-free regime with the European Union.
“Look at what is happening. I believe that we need to meet with leaders of parliamentary factions and hold a meeting of the National Reform Council next week to address the implementation of all the necessary changes,” he said in an interview with Ukrainian TV channels on Sunday evening.
Poroshenko said that the latest Ukraine-EU summit made it clear that no political obstacles remain to granting a visa-free regime with the EU to Ukraine, but technical issues are still a problem.
“On the one hand, the government submitted the necessary draft bills but there is no consensus in parliament… We need to reach the compromise urgently. And I hope that parliament will finally make this step and vote for the laws needed for the visa-free regime,” Poroshenko said.
He added that it is necessary to fulfill all the tasks that are beyond the competence of parliament, including combating corruption.
KYIV. Oct 16 (Interfax-Ukraine) – The European Bank for Reconstruction and Development (EBRD) has approved the issue of EUR100 million to several Ukrainian cities to improve public transportation, focusing on renovating and improving transport efficiency including EUR8 million to municipal enterprise Odesamiskelektrotrans for the purchase of 45 new trolleybuses.
EBRD Senior Adviser for External Affairs Anton Usov told Interfax-Ukraine that the bank’s board of directors made the decision on October 14.
According to the project, credit funds will be given to public transport enterprises in Odesa, Chernihiv, Chernivtsi and a number of other cities in the country under municipal guarantees.
At the same time, prior to the signing of relevant agreements the EBRD intends to issue EUR2.5 million within technical cooperation, after signing another EUR5.5 million.
As part of consultation and technical cooperation in the subproject in Odesa it is planned to grant EUR50,000 before signing the contract, EUR350,000 – after its signing.
KYIV. Oct 16 (Interfax-Ukraine) – The introduction of the law and legal acts on public private partnership in healthcare could help to attract investment to the Ukrainian medicine sector under the conditions of a lack of budget funds, Deputy Head of the parliamentary healthcare committee Iryna Sysoyenko (Samopomich) said at a forum devoted to investment in Ukrainian healthcare held on Thursday.
“I’ve prepared several examples of this partnership. In 2014, in Europe EUR 18.7 billion was attracted to the public private partnership projects in 2014, and EUR 16.3 billion in 2013. Our southern neighbor – Turkey – managed to triple GDP during 10 years mainly thanks to the use of public private partnership mechanisms, attracting $115 billion of investment into 193 projects,” the lawmaker said.
Sysoyenko said that the settling of the public private partnership issue is required to improve the disabled rehabilitation system in Ukraine.
“We need rehabilitation centers of the European level, which Ukraine does not have. The settling of the public private partnership issue would help creating these centers,” she said.
Sysoyenko said that the coordination council at the parliamentary healthcare committee is finishing drawing up a draft law on rehabilitation.
The lawmaker also supports draft laws on self-administration of medical institutions and changing the financing of clinics.
KYIV. Oct 16 (Interfax-Ukraine) – The UkrAgroCom and Hermes-Trading group of companies (Kirovohrad region) hopes to retain agricultural exports in the 2015/16 agricultural year (July-June) at 500,000 tonnes.
“I think that the group should reach the figure of at least 500,000 tonnes, maybe, it would be 700,000-800,000 tonnes next year,” Hermes-Trading Director Yuriy Skichko told reporters at the Ukrainian Agrarian Congress.
He said that the company continues to harvest corn harvesting. The yield of corn is higher than in 2014, despite the hot summer.
Skichko expressed disappointment in the actions of lawmakers concerning the adoption of the law on internal water transport.
“The non-adoption of these laws is ruinous for the further development of the country. They would allow for boosting transportation, loading roads, and developing the shipbuilding sector,” he said.
Three options of the draft law on internal water transport are on the floor of the Ukrainian parliament, but they were rejected. A new version is being drawn up.
In 2013, the group opened Svitlovodsk river terminal with a grain storage capacity of 94,000 tonnes.
UkrAgroCom and Hermes-Trading are part of an agricultural corporation specializing in the production of grain and oilseeds, as well as cattle and pig breeding
The group rents about 75,000 hectares of farmland in Kirovohrad region and owns elevators with a capacity of 353,000 tonnes of grain.
It also owns the Oleksandriya sugar refinery.
KYIV. Oct 16 (Interfax-Ukraine) – State-run Ukreximbank (Kyiv) will become part of the Export-Credit Agency being created in Ukraine to support Ukrainian exporters after it is reformed.
“The Finance Ministry is drawing up a system to reform state-run banks and it is clearly defined that Ukreximbank will support export-import transactions,” Deputy Ukrainian Deputy Economic Development and Trade Minister and Trade Representative Natalia Mykolska said at a meeting of the council for supporting Ukrainian exports held on Thursday.
She said that by the end the month, the government will finish the concept of the export-credit agency which could be also named Export-Insurance Agency.
Mykolska said that Ukreximbank will finance export-import transactions, while Export-Credit Agency will insure non-banking risks.
After completing the concept, the government would also submit the relevant law on the export-credit agency to the parliament.
Economic Development and Trade Minister of Ukraine Aivaras Abromavicius said at the meeting that Citibank wants to hold a large conference in Ukraine in Q1 2016 with the involvement of the heads of the world’s largest credit agencies.
