Will IMF Help Us Form Our State Budget?

Last Wednesday Verkhovna Rada assessed as unsatisfactory the work of the Cabinet of Ministers, as far as budget utilization for the first ten months of this year is concerned, and instructed the General Prosecutor’s Office to study the respective materials of the Auditing Chamber.

“We have passed a resolution obliging the Cabinet to observe the law. All today’s reports have confirmed that the Ministry of Finance has long been flouting the budget law. For example, only half Article 41 has been fulfilled. Last year, during budget hearings, we backed the ministerial proposals. So where are the results? The high courts and prosecutors should intervene,” Speaker Oleksandr Tkachenko said, summing up the budget dispute that arose in Parliament, Ukrayinski Novyny reports.

Meanwhile, Minister of Finance Ihor Mitiukov, addressing Parliament, put the blame for nonreceipt of budget revenues on the respective legislative committee, which pressed last year for a considerable rise in the projected revenues, and said some revenues had not been collected due to precisely those (increased —Author ) items. Mr. Mitiukov also stressed, “It is not worth demanding that expenditures be fully financed, while passing laws on reduced revenues all year long.” In his words, the ten month budget deficit is UAH 1.47 billion, and Deputy Premier Serhiy Tyhypko noted recently that it is the excessive budget deficit that may become a problem in the talks with the International Monetary Fund, which started on Wednesday.

The IMF is likely to hold a more prominent place as a subject of the Ukrainian budgetary process. Yuliya Tymoshenko, head of the parliamentary budget committee, is inclined to vest the IMF with the function of arbiter in her budget-related dispute with the Cabinet. She told The Day, “The 2000 budget should be adopted, but it looks like there’s nobody to support it. Neither the Ministry of Finance nor the Deputy Premier in charge of these matters can say anything concrete about the budget.

All our negotiations with the Ministry of Finance and other high officials end up with this answer: we’ll do what the IMF says, we’ll be doing nothing on our own. So we decided to take a shortcut and came into systematic contacts with the IMF, which will give instructions to the Ministry of Finance. Unfortunately, this is the way the chain of budget-related decisions is made.”

Answering The Day’s question if she would agree to head the Ministry of Finance or become the Deputy Premier in charge of the economy, Ms. Tymoshenko said, “I will not accept these proposals because I am not used to taking orders. I would like to generate a certain line on my own and press for its being followed.”

“In this case, what suits you is only the post of Premier?”

“Unfortunately, no coalition government is being formed today, and thus this prospect ceases to be of interest to us. There still is a coalition of our four factions intended to support such a government, but the 100 votes it has are, as is known, insufficient to do so.”

Will Ms. Tymoshenko be able to overpower the Finance Ministry, enlisting at least partial support from the IMF? After meeting her, IMF Europen Departmen director Odling-Smee said, “I am in Kyiv for the first day, so it is too early to comment on any results,” Interfax- Ukraine reports.

INCIDENTALLY

Deputy Chairman of the Auditing Chamber Vitaly Melnychuk told The Day that the chamber had repeatedly been sending to the General Prosecutor’s Office its materials related to violations in budget fund utilization. But, as Mr. Melnychuk said, there is no active reaction to most of these materials, although a few criminal cases have still been opened in this connection. Mr. Melnychuk expressed hope that the chamber and the prosecutors would establish cooperation because the General Prosecutor and the Chairman of the Auditing Chamber have approved the procedure for submitting Auditing Chamber documents to the General Prosecutor’s Office and signed an agreement on the joint work of these organizations.