Why Does President Hold Back NBU Bill?

However, if one reads the Constitution not through the Presidential Administration's eyes, this could be formulated differently: under the circumstances and in accordance with Article 94, the President had seven days to sign or veto that law. He did neither, until the last minute, so under the Constitution the law is "considered approved by the President" and he has to enact it, reads the article.

The difference in interpreting this clause is explained by the constitutional formulation to the effect that the Chief Executive must sign a bill within fifteen days after receiving this bill. But which days? Calendar or working? The text leaves this question open.

The Constitution can be interpreted only by the Constitutional Court, but even a child knows that a day is the time between sunrise and sunset.

But suppose we take the President's stand and assume that only working days are implied. The next logical question is hat made the President think so long. The National Bank submitted its commentaries and requested that the clauses it found unacceptable be vetoed on June 4. Three days later, Presidential Aide Valery Lytvytsky told Ukrayinski Novyny that the NBU criticism is well motivated and noteworthy, adding, however, that the President had not as yet formed an opinion on the matter.

Why, then, has the President remained silent? Incidentally, the bill entitles the President to appoint one half of the Supervisory Board. In other words, considering that the parliamentary-appointed members are sure to offer differing views on practically every matter on hand, this clause actually empowers the Chief Executive to rule the National Bank single-handedly, without assuming any responsibility for what happens as a result. It is as though the bill were drawn up specially for Mr. Kuchma, allowing him to ignore NBU requirements, substantially curtailing the central bank's independence (under the new law NBU's right to return loans are made equal to those of regular financial institutions). This law will make it much harder for NBU to cope with its main task of saving the hryvnia. So what? The main thing is that now it will be kept on a short leash, in keeping with the United Social Democrat prescription (the reader ought to remember that the United Social Democrats were the ones to initiate parliamentary investigation into NBU performance and this actually resulted in the law at issue).

Hence the NBU opponents' expectation that, hard as the bank might try, the law was signed, even if at the very last moment. At least such is the opinion shared with The Day by Anatoly Stankov, chairman of the banking subcommittee of the parliamentary Finance and Banking Committee. Otherwise the President would play against himself, because this would leave Viktor Yushchenko hanging and the IMF requirement of a law on NBU unfulfilled, which would have an unwelcome effect on further loan installments, added Mr. Stankov.

PS: A document issued by the German economic consulting group accredited to the Cabinet, called "On Whether Ukraine Needs an Independent National Bank," reads that such a bank, independent of the executive, would be better equipped to secure monetary stability. In countries where central banks are subordinated to the Finance Ministry, there is ample opportunity for inflation. The law passed by the Ukrainian Parliament on May 20 does not provide for such independence.