Agreement on budget

Last Friday brought the first good news of the past few weeks. Prime Minister Viktor Yanukovych announced that President Viktor Yushchenko has signed the 2007 state budget into law. This means that the two branches of power have at last met each other halfway. They have clearly made peace, but this raises a ticklish question: are they wiser now?

The prime minister, the cabinet, and the parliamentary coalition accepted the president’s demand to increase pension allocations in the state budget. The president does not mind that the government will not do this immediately but only when it reviews the budget after the first quarter of next year. “The budget will be revised right after the first quarter, and pensions will be increased if and when possible,” Yanukovych explained last Friday.

Just a few days ago the two branches of power had radically different positions, and it looked more like a confrontation than cooperation. Still, Prime Minister Yanukovych and First Vice-Premier and Minister of Finance Mykola Azarov said more than once that the president would finally sign the budget. According to a source close to the government, the cabinet estimated the likelihood of the budget being signed at 90 percent and the resistance of presidential staff hawks at only 10 percent.

The coalition team demonstrated quite a high level of organization and speed. Once the “gentleman’s budgetary agreement” between the prime minister and the president became known, the Verkhovna Rada resolved that the cabinet should submit a bill on revising the subsistence level and minimum wages. Out of 429 MPs present, 376 voted in favor, including 185 from the Party of Regions, 81 from the BYuT, 58 from Our Ukraine, 28 from the Socialist Party, 20 from the Communist Party, and 4 independents.

It should be recalled that the BYuT and OU factions comprise 129 and 80 parliamentarians, respectively. Naturally, the “no” voters were unable to change things, but their position should still be taken into account. For example, BYuT faction member Oleksandr Turchynov said from the podium that “the president exchanged the budget for Drizhchany” (that same day parliament approved the president’s decision to fire the head of the Security Service) and noted that this was a “non-equivalent” exchange. Turchynov thene He He HrTurchynov called upon parliament to pass a law, not a resolution, and emphasized that otherwise “this will just be a Mickey Mouse contract intended to cover up the deal struck on Bankova Street.”

The resolution states that after estimating the GDP for 2007, the cabinet must submit a bill to parliament on amendments to the state budget in order to raise the subsistence level for disabled persons to 397 hryvnias by April 1 and 406 hryvnias by Oct. 1.

The government was also instructed to draw up a bill - after summing up state budget revenues for the first quarter of 2007 - to raise the minimum wage to 420 hryvnias on May 1, 430 hryvnias on Aug. 1, and 460 hryvnias on Dec. 1.

It is no longer important to know exactly what led the two sides to reach a compromise. The Drizhchany question was the least influential factor, while the visit to Ukraine by Russian President Vladimir Putin might have played a role. Can you imagine what image this country would have projected during the negotiations had it not adopted a budget before that? It is quite possible that we would have been treated as poor relations, even partially insolvent ones, at whom people look down their noses. It is a very good thing that our country’s top-ranking officials managed to curb their ambitions and adopt the same position. This also applies to the foreign minister without whom the meeting of the Yushchenko-Putin Commission would not have looked exactly legitimate.

Wags will say “friendship got the upper hand” in the budget conflict. In reality, this means that despite the never-ending acute conflicts, Ukraine’s political leadership possesses an ample store of common sense to resolve them and run the country efficiently. All they have to do is keep the hawks at bay (who will not calm down until they claw their way into the meat) and tap this invaluable resource as much as possible.