The law on financing the Euro 2012 European Football Championship using the profits of the National Bank of Ukraine and the inclusion of provisions of the amended Budget Code into the draft law on the state budget for 2010 run contrary to the Road Map for Structural Fiscal Reforms agreed by the Ukrainian authorities and the International Monetary Fund, IMF officials have said.
The Ukrainian authorities and the IMF agreed during the second review of the cooperation program that proper testing is needed for the new Budget Code adopted by the Verkhovna Rada, and that its provisions should not be used in the 2010 budget, the IMF said in a press release on Wednesday.
They also agreed on selecting other sources for financing Euro 2012.
The IMF says that financing the championship using the NBU’s profit contradicts the law on the National Bank of Ukraine and impinges on the bank’s independence, whereas the introduction of the new Budget Code will require additional financing at a level exceeding 1% of GDP.
In addition, the road map published by the IMF includes a clause about the coalition’s refusal to vote for a law passed by the Verkhovna Rada at first reading about the increase of minimum salary and pension, as this will increase the budget deficit.
They also agreed that the government will not support a draft bill on a tax amnesty, will not approve the separation of the State Treasury from the Ministry of Finance and will not impose a moratorium on tax audits.
At the same time, the road map envisages energy sector reforms with a one-time 20% increase in the gas price for the population and heat suppliers in 2009, quarterly adjustments of the price in 2010, and eliminating gas subsidies by 2011. The document also stipulates the implementation of measures identified in the March Brussels declaration on raising the transparency, efficiency and reliability of Naftogaz Ukrainy’s operations.
The document, in addition, envisages the inclusion of a number of tax and pension reforms in the state budget for 2010, which should be prepared by the end of October 2009.
