Ukrainian Prime Minister Arseniy Yatsenyuk hardly left anyone out during a televised government meeting on Sept. 16. He charged at Russia, parliament, government coalition partners, local authorities and the customs and tax services.
Reacting to the Kremlin’s threat of imposing a blanket trade embargo on Ukraine if the country and the European Union went ahead with a free-trade deal on Jan. 1, Yatsenyuk said: “We are ready. Neither the Russian Federation nor any other country has right to alter our decision on European integration.”
Pleased that Ukraine received a second $500 million loan from the World Bank on Sept. 16 to reboot the credit market, Yatsenyuk said that “this is only because we are conducting reforms.” The prime minister has come under criticism lately for being in impediment to reforms, an accusation he categorically denies.
Echoing a statement by the international lender, Yatsenyuk made it clear that more change was needed. Citing “political unity between his government, the presidency and parts of the (governing) coalition,” Yatsenyuk hinted that those who would not vote for reform measures were playing into the hands of the country’s enemies – the Russian Federation and the oligarchs.
“If you don’t vote – you are against reform – so you are for default,” Yatsenyuk said, complaining that only a third of proposed reforms got passed by parliament. “We need real reforms … leaving no place for oligarchs,” he said.
Calling for more cooperation in parliament, he said that “the more we do, the more we get” from the West.
Yatsenyuk also addressed a boycott by the Batkivshchyna and Radical parties in parliament, in effect since Sept. 15.
Batkivshchyna had declared that the party wouldn’t vote in parliament before the price of natural gas levied on the nation’s households was lowered. The move was widely seen as populism ahead of the local election scheduled for Oct. 25. The gas price, Hr 7.3 per cubic meter, had increased more than three-fold since 2014, and were scheduled to rise until they reached cost-recovery levels.
Batkivshchyna had also asked that the 70-percent rent payment for gas extraction be lowered in order to boost domestic production. That demand made sense, gas analyst Mykhailo Honchar, president of the Centre for Global Studies Strategy XXI said.
Yatsenyuk called for an open hearing on the pricing policy, where he would prove that the price hikes were well founded. He accused Yulia Tymoshenko, the former prime minister and current leader of Batkivshchyna, of reaching a bad gas deal with Russian President Vladimir Putin in 2009.
Yatsenyuk went on to demand that parliament pass a law that would raise pensions and salaries of more than 12 million individuals by 13 to 20 percent. Tymoshenko had said inflation had reached 73 percent, far more than the prime minister’s proposed hike.
The World Bank loan was designed to strengthen the capacity of the Deposit Guarantee Fund and assist under-capitalized banks, a statement by the international lender said.
Yatsenyuk also told parliament to ratify a foreign debt restructuring deal that would cut almost $4 billion of Ukraine’s foreign bond obligations. The deal was controversial because the bondholders would get parts of the so-called haircut back if Ukraine’s gross domestic product would increase by more than three percent.
Yatsenyuk, moreover, called on local governments to end a reported Hr 53 million backlog in paying out pensions and salaries across the country. “You have money in your accounts, so get them out to people,” he almost shouted.
He pledged a pool of Hr 2 billion to support poor areas but at the same time urged local authorities to do a better job. “You have untaxed land plots, business in the shadows,” he said, pointing to sources of funding for local administrations.
Yatsenyuk went on to demand that all bosses in customs and tax authorities should be fired and new heads of local branches be recruited via open and competitive testing based on merit, similar to the hiring process for the new police force.
“We will not get effective state institutions just by changing the bosses though,” he said. He praised a recent “more than Hr 2 billion increases in value-added tax revenue, but that was only the beginning.”
Yatsenyuk didn’t exclude that existing customs personnel could fulfill the vacant positions, but “you will have to undergo testing and change the approach to the citizens, if you want to serve the country,” he said.
Kyiv Post staff writer Johannes Wamberg Andersen can be reached at [email protected]
