Parliament and Government Share Responsibility for 2001 Budget

Verkhovna Rada passed the 2001 budget bill as a whole on December 7, with 249 of the 423 registered lawmakers voting for it. Among the opponents were the Communists and Yabluko. President Leonid Kuchma declared that by passing the 2001 budget bill Parliament has demonstrated its adherence to “the statehood and democratic development of Ukraine.”

The foundations for adopting the budget program in the third reading were laid previously when the parliamentary majority’s coordinating council recommended the member fractions and groups finally approve the bill. More than one-third of the state budget items remained to be accepted after the second reading, including internal budget relationships, concessions to a number of categories of the population, and budget expense allocation (Supplement No. 3). Generally, the item-by-item vote passed rather evenly, except that Item 58 turned out to be a stumbling block; it was voted down the first time and Premier Viktor Yushchenko had to assure from the podium that the budget bill does not provide for social privileges worth UAH 16 million, and that there are no sources of financing. The people’s deputies thought this over during the intermission and then passed it. As was to be expected, internal budget relationships caused heated debate. The Premier explained his “complex approach” to the problem; 27 regional budgets would be formed based on the normal allocation system, with 10% of the resources remaining under the Cabinet’s operational control.

Parliament voted for an increase in state budget revenue items: by UAH 340 million to UAH 41.9 billion, including common fund receipts worth up to UAH 33.3 billion and special funds of UAH 8.7 billion. The balanced budget was confirmed, setting expenditures at UAH 41.9 billion.

Thus ended this year’s budget saga. Deputy Leonid Kravchuk told The Daythat such comparatively quick passage of the budget bill is explained by the presence of the parliamentary majority with its group responsibility for Ukraine. Legislator Oleksandr Riabchenko believes the budget process in Parliament should not be associated with the meeting of the IMF Board scheduled for December 19; the IMF is not likely to consider any financial aid to Ukraine before the new US President takes office. Mr. Riabchenko noted that copies of the two volume budget program prepared by the Cabinet were handed lawmakers just thirty minutes before they were called to order by the Speaker. Naturally, no one had the time to look through the text in any detail.

Deputy Viktor Suslov does not consider the enactment of the budget a great attainment. “Passing the budget bill allows one to expect resumption of EFF tranches. Without EBRD loans, Polish coal, and IMF money, Ukraine might not survive the winter. What is happening shows that Ukraine has lost its independence; it is unable to solve its problems using its own resources. The deputies voting for the budget knew that Ukraine is gripped in a crisis.”

That same day, Verkhovna Rada passed two other important resolutions, ratifying the Loan Agreement with the EBRD, worth $100 million (for winter fuel procurements in 2000-01), and passing the bill On Banks and Banking as a whole.