Three dangers to government and president

The government is in the state of “red alert” over strategic reforms. Participants in the latest session of the National Reform Council chaired by the president told The Day that there had been a bitter debate about this issue. The first, open-door, part heard a discussion of the decentralization reform drawn up on the basis of Polish experience. The second one assessed implementation of the already begun reforms.

At first, President Petro Poroshenko praised the government for decentralization because changes to the Budget Code allowed local budgets to boost their finances by 40 percent. “This is the first time local budgets received the real money, which is an extremely positive first step,” he pointed out. It is also good, in the president’s view, that communes continue to merge voluntarily, which will launch a large-scale decentralization. “No bureaucrats will be pointing an instructive finger from above or persistently advising about this merger. It is the right of an individual. If you want to go on living as you do now, do not merge. But you will then collect 100-200 thousand hryvnias as annual budget of a village, which will be only enough to keep up the village head. There will be no changes,” the head of state explained.

This praise continued… until cameras were switched off. Real appraisals began when journalists had to wait for the news behind the closed door. As the participants told The Day, three conclusions were made in the course of a five-hour debate.

Firstly, parliament has indeed voted several important bills into law, which can be considered part of the reform of local self-government and decentralization. But, unfortunately, these legislative acts are being put into practice ineffectively.

Secondly, the session said that what represents a danger to local self-government and the political system is… the law on local elections, which passed the first reading (?!). The Samopomich faction leader Oleh Bereziuk explained to The Day that, although this document rests on new principles, it is written rather inadequately and is open to manipulations. Therefore, the MP adds, the entire public should keep a watchful eye on it during the second reading.

The third danger is the proposed version of the Constitutional reform. “Both the parliamentary speaker and the president have proudly spoken about the reform of and changes to the Constitution, but no MPs have ever seen the text of these changes,” Bereziuk adds. Meanwhile, the Venice Commission may pronounce its verdict one of these days, and these changes will have to be voted on in parliament. “The danger is that the Constitution will enshrine creeping centralism, not decentralization,” Bereziuk explained.

Economic reforms, successful as well as floundering, were also under discussion. It was decided that the Ministry of Agricultural Production, the Ministry of the Infrastructure, and the Ministry of Finance were the most successful as far as deregulation is concerned. “Medical reform was criticized (not unfoundedly). The Ministry of Ecology came under scathing criticism. The Ministry of Regional Development also had to hear not exactly pleasing words,” the Samopomich faction leader says. The Day inquired what the Ministry of Regional Development was criticized for because, on the contrary, the president had previously praised this institution for a right “first step.” Bereziuk explained that Hennadii Zubko, Minister for Regional Development, Construction, and Public Utilities, had been “rapped over the knuckles” for an inadequate implementation of decentralization reform. In other words, the campaign to explain this reform and the importance of commune merger has so far gone bust, which political opponents are taking advantage of and speculating on.

One of The Day’s interviewees, who asked not to disclose his name, said there had been a bitter dispute between Arsenii Yatseniuk and Bereziuk who demanded that the Ministry of Fuel and Energy and the National Energy Regulation Commission receive instructions about how to assess public utility rates. The premier left this question unanswered. Radical Party leader Oleh Liashko delivered rather a tough speech about the ecology minister, hinting at his professional inadequacy. Yet, as far as Liashko is concerned, it should not be forgotten that parliament is now actively discussing an option that if Ihor Shevchenko is dismissed, the new minister of ecology will be appointed on the advice of the Radical Party.

So, the latest meeting at the Presidential Administration revealed that a conflict of interests was imminent inside the coalition. There are at least three factors that may cause it: voting on the local elections law, portfolio distribution, and fulfillment of the Coalition Agreement. The latter point is raising a lot of logical questions. In particular, the Ministry of Finance suggests that the Constitutional Agreement’s provision on extending a privileged treatment of the agrarian sector until 2018 be scrapped and that agrarians be taxed on a customary basis from January 1, 2016, onwards. This provoked serious opposition on the part of various parliamentary groups, and it is not clear who will emerge victorious. Besides, it is obvious that most of the agreement’s provisions are just not being fulfilled. After the meeting, Dmytro Shymkiv, First Deputy Chairman of the Presidential Administration, said that a mere 39 percent of the Coalition Agreement’s provisions had been fulfilled by the end of May 2015. “Some of them are likely not to be fulfilled. There is a clear-cut plan of the Coalition Agreement, the agreed-upon dates and concrete actions. All this must be fulfilled,” he emphasized.

Does all this mean that the conflict of interests will soon lead to a Cabinet reshuffle? “The government will continue to work. Its activities will be examined soon, and the ministers who have failed to carry out reforms still have two or three months to do so. On the basis of the results of work in the past nine months, some ministers will perhaps have to be requested to resign,” Bereziuk told The Day. But, as The Day’s sources in the government are saying, it remains unclear whether or not the minister of ecology will stay on in office.