Budget discord: What threatens Ukraine, the main financial document

On October 20 the Verkhovna Rada adopted in the first reading the budget for 2017


However, the document did not vote number of members of the coalition and opposition parties have proposed hundreds of amendments.What is troubling in the budget of deputies, and to establish whether its final adoption by the disintegration of vertical?


The oligarchs remain

The government, once again found a dependence on the oligarchs and the actual preservation of their status in 2017.
245 votes for the document was collected not at the expense of the ruling coalition, and with the usual support of the oligarchic factions of the “Will of the people” and “Renaissance”. The Bloc of Petro Poroshenko for the budget voted 108 of the 143 MPs in the popular front — 74 of 81. The former coalition partners — “Batkivschyna”, the Radical party and “Samopomich” in the amount given only 4 votes.


Experts list several key points in the budget, which play in favour of large financial-oligarchic circles.
“The current government is not a hostage, and representatives of oligarchic interests, — explains the head of the Committee of economists of Ukraine Andriy Novak. All they could do for them, — did: retained a reduced rent for gas and oil production (hence the voice “will of the people” with the “Vidrodjennya”), the state order for defense left under “classified”, and there’s just a lot of oligarchs “feeds “, a major farmers and exporters have left the “gray schemes” VAT refund”.

The main feeder of the oligarchs and officials next year, according to forecasts Novak will be the increase in VAT refund by 35%.
“Mechanism of VAT refund is one of the largest corruption schemes in the country. All known odds in his return, which range from 30 to 50% of the amount of compensation”, — said the expert.



On the verge of collapse


The vote on the budget showed that not only the coalition on the brink of contention, but some of the party.
Unpleasant the vote on the budget-2017 was personally to Yulia Tymoshenko and the Opposition bloc. “Woman with scythe” is actually split his own faction voted “Nay,” her, and her longtime partner Sergey Vlasenko and two subtle deputies: Sergey evtushok and Valery Dubil. Young stars BYUT, like Nadiya Savchenko, Olena Shkrum and Alexei Ryabchin, abstained from the vote, and Igor Lutsenko generally voted “for”.

The political scientist Taras Chornovil considers that the contradictions in the vote, “Batkivshchyna” will only increase and the formation of the ruling coalition along with the Opposition bloc in the Kherson and Mykolaiv regions will not pass her unnoticed.
“It is obvious that any strict instructions to vote “against” was not, or the people in her faction is no longer adhere to the decisions of Yulia Tymoshenko. The main reason for many was indicative of the policy of Association with the opposition bloc in the southern regions and vote with them in the hall of the Verkhovna Rada. For the rich this is unacceptable, and that dirty story only to continue, ” — said Chornovil.
The opposition bloc in the last time is going through hard times. To loud statements Evgeniy murayev and Vadim Rabinovich, the exit of the faction, adding, “treason”, 15 of the 43 members of the OP, who “abstained” from voting.
It would not be noticed, if not for the names of those who “abstained”: Nestor Shufrych, brothers Dobkin, Vadim Novinsky, Alexander Vilkul, Serhiy Kivalov. They are closely associated with serious oligarchic structures and the adoption of the budget decided “not to interfere”. However, Chornovol suggests another cause negolosovaniya budget these deputies.
“In ABOUT there are several informal groups, and he’s on the verge of a split. Purely Russian — Rabinovich, and Moore is already out, the group of Lyovochkin and Boyko have different interests, so unanimous decisions were never there. This story is not about dependence on the oligarchs, most of them just don’t care” — says Chornovil.


Speceficity of contention


Without confiscation of so-called “Yanukovych’s money” budget for next year in jeopardy, and threatens NF in General in the second reading not to vote for him.
To show the seriousness of the Verkhovna Rada urgently arrived the former Prime Minister-the Minister Arseniy Yatsenyuk, who called the failure to vote for specefication “an attempt to undermine the government” and blamed the… deputies of BPP allegedly not performing “from the President”.
We are talking about 10.5 billion UAH of the arrested assets of officials of times of Victor Yanukovych and members of his so-called “Family”. The money is in the accounts of Ukrainian banks in 2014, but members of the two convocations can’t find the votes to pass the law allowing to direct these funds to the budget.
In the spring NF has threatened to stop any vote, including the launch of the judicial reform, if the law of special confiscation will not be accepted. In the end, the amendments in the Constitution necessary for the judicial reform, adopted, and the main requirement of the second biggest political force in the Parliament was not fulfilled.
In the following year to the Yanukovych’s money can be added to those that will be arrested by the officials in the framework of the law “On combating corruption”. The future Agency for the management of arrested assets, which should be up before the end of 2016, will be able to take away from the officers, the property and funds, the origin of which they cannot explain. If in two years the fight against corruption in the Ukrainian budget returned less than 10 thousand UAH, only for the first year of a similar Agency in France transferred to the budget of 4.5 million euros (127 million), more than 30 million they have listed in the target public funds and payment to the victims in different articles.
“To blackmail Arseny Petrovich loves, but to carry out the threat — a direct threat to it — soothes Chornovil. Here the problem of basic sloppiness, so he moved into a frontal attack on this issue.”


Year without reform?


Almost the main topic of debate in Parliament was the fact that in addition to law enforcement in 2017, any reform in the budget is not planned.


The armed forces next year will receive guaranteed by the law On defence 5% of GDP. 129 billion UAH, which is 14.5 billion more than this year. Additional billion hryvnias will be received by the state office of public Prosecutor, 5 billion UAH — Ministry of interior, 9 billion of the defense Ministry. Clear for the country in war.
But for the allocation of funds for medical reform MPs do not vote. This section promised to prepare for the second reading. Expenditure on education, science, culture, ecology, decentralization reform and subsidies to farmers was reduced.
To cut spending on the Armed forces and law enforcement agencies in the Parliament has consistently tried the deputies of the Opposition bloc and majoritarian deputies from the party “Freedom” Andrey Ilyenko and Yuri Levchenko.
“MIA, SBU, state special connection service and Management of public facilities is not a defense budget, and the passive elements of the police apparatus. If you count the MIA defense, except from their own people”, — explained his position Levchenko television broadcast on the eve of voting in Parliament.



Black holes


In addition to political storms, financial plan for 2017 involves a lot of doubtful economic moments.
The main threat is too optimistic scenario of development of the Ukrainian economy. The Finance Ministry expects GDP growth at 3% vs 1% predicted by the world Bank, the increase in exports by 8% and imports by almost 10%. What are the plans too ambitious, said as a budget Committee and scientific expert Department of the Verkhovna Rada.
The experts came to the conclusion that negative trends in the Ukrainian economy in 2016 (the stagnation in the domestic industry in the conditions of low external demand, low level of modernization of production capacities), increases the risks.
The second point that experts point out, is an expectation of UAH 17 bn from the large-scale privatization. In the explanatory Memorandum to the budget says about the Odessa port plant, “Ukrspirt”, “Turboatom”, “Ukrenergo” and other state giants.
The need for privatization of these enterprises, experts do not deny, but remind you that since 2014, no intent broadcasts mainly loss-making state enterprises was not carried out. In the budget for 2015 was planned UAH 10 billion, and sew 200 million In 2016, was going to get 15 billion UAH, and it is, as of now, a little more than 100 million
“This is one of the most unlikely items in the budget. Largely its implementation next year will depend on the political factor. If there are early elections — it is unlikely that the government will be engaged in large privatization”, — predicts Novak.
Now the budget deficit is planned at UAH 75 billion. If you are going to be 15-20 billion backlog of plans — it’ll make the government as usual to go into debt, but on worse terms than now.
“No real reforms for economic growth next year is not done, so the absence of privatization may affect the decision of the IMF and worsen the country’s credit rating. We will take the loan is not average under 7% per annum, as now, but at 10-12%, ” the disappointing concludes Novak.


Now the government has two weeks to make changes and enumeration of items in the budget that is not agreed by the deputies. Then for two weeks the document will be considered in the parliamentary committees, not later than November 20, the budget should the second reading be considered at the plenary hall of the Verkhovna Rada.


Ilya Lukash

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