Where the devil lurks

The current exchange of blows between parliament, the cabinet, and the president in the “budgetary ring” looks quite predictable. Last Tuesday, when the budget bill was submitted for the first reading, Volodymyr Makeienko, chairman of the Verkhovna Rada’s Budget Committee, announced that the committee had supported and considered the president’s proposals. Then he requested the MPs to back the committee’s proposal and allow the cabinet to draw up the draft budget for a second reading.

The committee suggests taking into account, fully or partially, 1,900 out of 3,600 proposals submitted by the parliamentarians, later reduced to 2,500 and shown in the comparative table. As is often the case, most proposals were aimed at increasing expenditures rather than collecting higher revenues. According to Makeienko, the ratio is UAU 75 billion to UAH 400 million. This weighty argument undoubtedly played into the hands of the cabinet, which always tries to suppress expenditures as much as possible and, at the same time, to keep revenues in check because it is extremely difficult to deal with the latter.

This time around the cabinet seems to be employing the usual tactic, envisioning a certain gap in the revenues at the expense of free economic areas. This provoked objections even from the “native” budget committee, which had instructed the cabinet not only to draw up and submit to parliament the budget bill for the second reading but also propose regulations for the special economic areas.

The other threat to the budget, according to the coalition, is privatization revenues. Taking into account this year’s sad experience, when the plan of this kind of revenue is most likely to remain unfulfilled, the budget committee insists that the cabinet should expand the list of businesses to be sold with some more attractive facilities and draft a law “On the State Program of Privatization in Ukraine for 2007-2009.”

Nevertheless, no one doubted that the anti-crisis coalition factions would support the government’s budget, including the articles that infringe on the constitutional rights and freedoms of individuals (for example, the downward revision of the already agreed-upon pensions). Last Tuesday Communist Party leader Petro Symonenko declared in parliament that his faction suggests limiting the maximum pension for all Ukrainian citizens to 12 minimal pensions (about UAH 4,700). Obviously, by expressing such intentions seemingly based on a feeling of social justice, the coalition is providing its adversaries with good trump cards for torpedoing the budget, if not during the vote then by means of a presidential veto or a ruling by the Constitutional Court.

The most radical part of the opposition is certain to take advantage of this and will thus succeed in reduce the cabinet’s rating. (The impression is that, having received the go-ahead for long-term work as a result of the political reform, the cabinet has chosen to assume full responsibility for adopting unpopular measures.) Last Tuesday Yulia Tymoshenko said it was an antisocial budget and called on the MPs “simply not to vote for this national shame.”

Meanwhile, Our Ukraine is going to refer some articles of the state budget to the Constitutional Court. “Azarov should understand that if he does not remove these articles from the budget, we will get the Constitutional Court to repeal them, or maybe we will succeed in having the entire budget canceled as an unconstitutional one,” said one of the OU leaders, Mykola Katerynchuk, who scathingly criticized the attempts to cut the pensions of still-employed retirees.

Pavlo Zhebrivsky, first deputy chairman of the Parliamentary Budget Committee, claims that 90 percent of the president’s proposals about the draft budget have not been taken into account and that his and Our Ukraine’s comments and proposals in fact coincide. This MP thinks that Our Ukraine is not happy with the social cuts in the draft budget.

Still, this attitude does not appear to be entirely sincere. It looks as though the opposition is now more worried about the electoral points that it can accumulate by criticizing the coalition’s unpopular measures than about the budget. Zhebrovsky says that Our Ukraine’s goal is to put the “ludicrousness” of the budget across to the public “so that it will know what to expect next year.”

There is also a pragmatic part of Our Ukraine, represented by the ministers who have handed in their resignations but are still in office. For instance, Ukraine’s Minister of Defense Anatolii Hrytsenko said last Tuesday that the changes made before the budget bill was submitted for the first reading were positive. According to him, military servicemen “should clearly see that the state is taking a responsible attitude toward them, and our task is to restore the trust of soldiers in their state.”

It would be a good idea to assign this kind of task with respect to other social strata. Whatever the case, the draft budget was passed in the first reading, and Speaker Oleksandr Moroz even called it more progressive than the 2006 one “if we don’t go into details.” But, as we know, the devil is in these very details. The only way to expose and get rid of him is a second reading, when the budget may be considered article by article.