Editor's Note: The Kyiv Post tracks the progress made by Ukraine's post-EuroMaidan Revolution leaders in making structural changes in the public interest in six key areas: economy & finance, security & defense, energy, rule of law, public administration and land. The following issues were in focus on June 26 - July 2.
Economy &
finance
With talks mounting of Ukraine possibly
defaulting on its sovereign debt, Kyiv on June 30 agreed with creditors to conduct
debt restructuring negotiations behind closed doors, announcing only that the
parties would begin “principal to principal” talks in the following week. Investment firm Dragon Capital said that the
agreement, reached under the auspices of the International Monetary Fund in
Washington, D.C., was an important sign of progress after a prolonged deadlock
in negotiations. “The no-haircut approach advocated by the
creditors’ committee is hardly acceptable to Ukraine (and the IMF) while with
40 percent nominal haircut proposed by the finance ministry is barely tolerable
for bondholders, given the uncertainty over future debt-to-GDP dynamics,” Dragon Capital
said.
Rule of law
On July 2, parliament
passed controversial changes to the nation’s new law on public prosecution,
adopted last autumn. The amendments, proposed by President Petro Poroshenko’s
camp in parliament, endanger the independence of the key judicial body, critics
say. He could, through his political leverage, potentially control a majority
in a commission that chooses the head of the anti-corruption prosecutorial
branch without which the newly formed National Anti-Corruption Agency cannot
carry out its powers.
Its adoption prompted
the reformist Samopomich and the populist Radical Party to abandon the session
in protest in what they called “usurp of power” by the president. The changes
furthermore retain more presidential power over the prosecutor’s office than
foreseen in last year’s law.
Also,
parliament on
July 2 passed a key law aimed at transforming the much criticized and widely
disrespected post-Soviet militia into a modern police force. After a heated
debate over the degree of independence of the new force, it was agreed that the
interior minister would retain his influence over key appointments in the
force, even at the regional level.
Moreover,
parliament on July 2 passed a bill regulating cooperation between the different
branches of the interior ministry, the police, the immigration service and the National
Guard.
Foreign experts
and members of the Constitutional Commission, the advisory body to the
president, said the process of making changes to the nation’s fundamental law,
lacks transparency and interest from the public. The commission drafts
amendments in three core areas: human rights, the judiciary and decentralization
Security & defense
Vasyl Hrytsak,
a former
head of the State Security Service’s
Anti-Terrorist Center, was appointed head of the security
service on July 2, 14 days after replacing Valentyn Nalyvaychenko as
acting head of the service, known by its Ukrainian
abbreviation of SBU.
Public administration
In a move labeled
as decentralization, President Petro Poroshenko on July 1 proposed changes to
the Сonstitution aimed
at transferring power to local elected authorities. If the changes make it
through parliament and the Сonstitutional Сourt, the president will lose his power to appoint the
heads of oblasts and
districts,
and local administrations will instead answer to elected local bodies.
The
new position of prefect will be introduced to ensure that local authorities act
lawfully in executing their powers. Appointed by parliament and the president, the
prefects will not have hands-on control over local affairs, unlike the current
presidentially appointed governors, Poroshenko argued. Critics said that the
prefects would control the regions in a manner similar to the current,
president-appointed governors today.
The Minsk II agreements of Feb. 12 stipulate that Ukraine is to conduct constitutional reform focused on decentralization.
The parliament
on July 2 passed a law introducing an external audit of the Accounting Chamber,
the audit body of the parliament, controlling all state expenditures. The external
audit was a requirement of the International Monetary Fund.
Energy
Beginning on July 1, the state owned oil and gas
company Naftogaz Ukrainy suspended purchases of natural gas from the Russia’s giant
gas company Gazprom.
The suspension came as trilateral
talks in Vienna failed to produce new terms for Russian gas supplies to Ukraine.
Meanwhile, Naftogaz said that Ukraine would continue to transit gas to Russia’s
customers to the south and west of Ukraine.
“For a renewal of the
supplies, the parties have to approve a joint temporary position on the provisions
of the contract that will remain in effect at least until first quarter of
2016,” Naftogaz said in a statement. Gazprom continues to reject Ukraine’s proposals.
Land
To ensure there is enough funding for regional budgets, the Verkhovna
Rada has approved amendments to the Tax Code increasing the ceiling of land
rents. If there is an open competition for the right to rent, the ceiling on
annual rents can exceed the current level, which is 12 percent of the estimated value of the land.
