Alina Zymenko (UNIAN)
Some Ukrainian officials tried to derail Kyiv’s cooperation with the IMF, having incited a scandal with a fake memorandum and speculating on the issue of social standards. The long-awaited law was adopted on the simplification of access of western medicines to the Ukrainian market.
Another long-term dream of the Ukrainians
can become true: to buy used cars cheaper.
Ukraine’s relations with the International
Monetary Fund, the country’s key creditor, have remained on top agenda for
several consecutive weeks. This time, a quite unexpected scandal emerged
initiated by certain political forces.
Yulia Tymoshenko of Batkivshchyna and
Oleh Lyashko of the Radical Party said that the country's leaders had allegedly
signed a memorandum with the IMF, which provided for some "terrible"
things – raising the retirement age and allowing the purchase and sale of land.
This blew up the news bulletins.
However, the Ministry of Finance, and then
in the IMF both denied the allegations. In turn, Prime Minister Volodymyr
Groysman said that the publication of a fake document jeopardizes relations
between Ukraine and its major creditor. "I think this is an attempt to
discredit our cooperation with the IMF. I believe that this is an attempt to
put under an awful threat economic stability in our country, and I believe that
this means a complete lack of responsibility. There is no such document, "
said the head of Government.
Meanwhile, the rhetoric of the Finance
Ministry still suggests the idea that raising the retirement age is inevitable.
The budget deficit already exceeds UAH 140 billion, and the country
desperately needs to find mechanisms to patch this hole. According to Finance
Minister Oleksandr Danylyuk, the IMF does insist that the pension reform be
carried out, although it does not specify how.
"The draft agreement [memorandum ]
with the IMF has no requirements [on raising the retirement age]. The IMF asks
us to carry out a balanced pension reform. And this is what we must do. We’re
not talking about raising the retirement age in Ukraine at the moment,"
Danylyuk said.
Deputy Prime Minister Pavlo Rozenko
elaborated that for now, the government does not intend to raise the retirement
age. But experts see not too many ways to solve the problem of the Pension
Fund’s deficit. It’s either raising the retirement age for all categories of
pensioners, or introducing a funded pension insurance system, or extending the
retirement age at least for certain categories – miners, prosecutors, customs
officials, who are now eligible to retire at 40.
The final version of the memorandum is
completed yet, so we can only guess what will be the IMF requirements to the
pension, monetary, banking, and anti-corruption policy. Groysman believes that
the Fund will support the Ukrainian Government. Meanwhile, the support of the
U.S. Government in the form of a $1 billion loan guarantee is encouraging, It will
allow Ukraine to issue bonds and raise funds for social assistance to the most
vulnerable groups of the population.
"The fact that we have U.S. support
concerning deep structural reforms and a regarding finance gives us confidence
that we are going the right way. It is important that we use efficiently the
time that we have to carry out reforms. We understand that," said
Groysman.
Speculation on
subsistence level
Last week, there was an attempt to raise
the subsistence level in Ukraine. The initiative once again was of Yulia
Tymoshenko. However, the relevant draft law has not received the required number
of votes.
First and foremost, that’s because the
deputies have not found in this bill the mechanism of compensation for the
increase of budget spending. And that is a huge sum indeed- almost UAH 70
billion. Given the growing budget deficit, which in January-April was recorded
at around UAH 22.2 billion, the failure of the bill is for the better.
The National Bank noted that in the same
period last year, the state budget recorded a surplus of UAH 8.2 billion due to
proceeds from the sale of licenses for 3G connection. But this year sees
minimum revenues. Besides, budget expenditures increased due to the reduction
of the single social contribution. Of course, the increase in the minimum
subsistence level is very important. Today’s UAH 1,330 per month has nothing to
do with reality.
Now the Cabinet is calculating the
adequate subsistence level and thinking how to fill the state treasury to
safeguard it. A source in the Finance Ministry told UNIAN that the analysts at
the ministry had already come to a common denominator of UAH 2,800 per
month. But it is not so smooth with the financing the spending related to the
increase of social standards.
Otherwise, the government would have
already submitted to the parliament a bill on an updated living wage, which
would at the same time not destroy the country's economy.
However, at the moment, the Cabinet is
busy fending off populist initiatives. Regarding the abolition of taxation of
pensions, this initiative has been partially implemented, but as part of
another Government-proposed bill. The MPs have increased the level of pensions
subject to taxation from UAH 4,350 to UAH 10,740. Thus, if the pension is
greater than 10 living wages, then it will be taxed at 18% of the excess
amount.
Waiting for lower prices
for medicines and cars
Under pressure from civil society
organizations, the deputies last week finally took one of the socially
important decisions – reduced the period of registration and simplified access
to the Ukrainian market of medicines already registered in the West.
The fact that there are too many parties
of interest in this issue led to this bill being impeded, amended, with commas
and paragraphs constantly revised. Prime Minister Groysman, who personally
oversaw the adoption of the bill mentioned, expresses gratefulness to the MPs
several times this week for passing the draft law.
Now the term for registration of medicines
in Ukraine is reduced from 30 days to just 10 days. Moreover, the medicines
already registered in the EU, the U.S., Switzerland, Australia and Canada will
automatically be eligible to be sold in the Ukrainian market.
As noted by one of the bill’s authors, MP
from BPP faction Olha Bohomolets during the presentation of the bill, the
provisions of the law will fo a long time remove pharmaceutical monopoly from
the domestic market. "The initiative allows to take into the territory of Ukraine
in a fashion of the European Community those medicines that today the
Ukrainians travel to buy in Hungary, Slovakia, Slovenia, that are much cheaper
than those presented in Ukraine," said Bohomolets.
Easier access of the western medicines to
the Ukrainian pharmaceutical market is one of the preconditions for the
elimination of the shortage of medications. But some are still dissatisfied.
Several MPs continue to insist that that now the Ukrainian market will be
filled with medicines of poor quality. Another important decision the Verkhovna
Rada adopted last week was the abolition of import duties on used cars.
Now the vehicles with smaller engine capacity will cost us about the same as
they do in Europe.
Until now, the Ukrainians have overpaid
for such cars by many times. However, everyone may sigh with ease only when
President Poroshenko signs this law. At his big presser Friday, the Head of
State said that he had not yet decided the fate of the document because he had
not yet gotten familiar with it.
Previously, experts and politicians
suggested that Poroshenko was likely to veto the law, as it may harm the
automotive business of Bohdan Motors Corporation, which, according to media
reports, is part of the closed investment funds owned by the head of state. Car
dealers selling new vehicles also oppose this legislative initiative.
Original
Original
No comments:
Post a Comment