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Archive for June 23rd, 2010

Ukraine ready to transit more Russian gas to Europe

Posted by the Editor on June 23, 2010

News / 23 June 2010 | 16:35

Ukraine ready to transit more Russian gas to Europe

Ukraine ready to transit more Russian gas to Europe

Ukraine is ready to do everything to settle a gas dispute between Russia and Belarus, as well as to pump more Russian gas to Europe if needed, Ukraine’s fuel and energy minister said on Wednesday, RIA Novosti informed.

“First, I want to say that today’s conflict is a bilateral affair between Russia and Belarus. And we want it [the dispute] to end as soon as possible, and the two countries to find a compromise and agree,” the Ukrainian Fuel and Energy Ministry’s press service quoted Yury Boiko as saying.

Russian energy giant Gazprom has reduced supplies to Belarus by 60% over Minsk’s $200 million gas debt. The company initially cut supplies by 15% on Monday, doubling the reduction to 30% on Tuesday and again to 60% on Wednesday.

It has warned the cuts may reach 85% or daily volumes if Belarus fails to repay the debt.

Gazprom CEO Alexei Miller said “the Belarusian side has taken no steps” to meet the company’s demands.

Boiko said Ukraine, the main transit nation for Russian gas supplies to Europe, would be able to increase supplies if Moscow makes such a proposal.

“We have the technical capability to increase the transit of gas across our territory by approximately 30 billion cubic meters,” he said, adding that “we have received official proposals neither from Russia nor from Belarusian colleagues.”

Ukraine currently pumps more than 110 billion cubic meters of Russian gas to Europe annually.

Gazprom has said it has agreed with Kiev to reroute gas intended for European consumers via Ukrainian pipelines.

The dispute between Russia and Belarus has erupted as Minsk has refused to pay the Russian gas price, set at $169 per 1,000 cubic meters for the first quarter of the year and $185 for the second quarter, and has been paying only $150 since January 1.

Miller has said Belarus continued pumping the same volume of Russian gas to Europe despite Belarusian President Alexander Lukashenko’s threats to cut supplies. Poland’s gas company said on Wednesday it was receiving its full allocation of gas via Belarus.

Lukashenko told Russian Foreign Minister Sergei Lavrov on Tuesday in Minsk that he had found money to repay the debt, but argued that Gazprom owed Minsk for transit fees and proposed canceling the debt. He said he had ordered suspension of Russian gas supplies to Europe, potentially affecting 6.25% of consumers.

Gazprom admitted it had a debt but did not specify its amount, only saying Minsk refused to allow it to settle the debt. The two parties have failed to reach any mutual debt offset arrangement.


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Tymoshenko criticises Azarov’s report on 100 days of government’s work

Posted by the Editor on June 23, 2010

News / 23 June 2010 | 14:45

Tymoshenko criticises Azarov's report on 100 days of government's work

Tymoshenko criticises Azarov’s report on 100 days of government’s work

By announced allegedly positive results of their first one hundred days in office, Mykola Azarov’s government is deceiving society, says Yulia Tymoshenko, BYuT press office reports.

“Yesterday as I was watching Azarov report on the first one hundred days of their work I began to think that perhaps there is no limit to the cynicism on the current ruling political team in Ukraine, because it broke my heart to hear a person talk about 6% GDP growth when I know how untrue this is,” Yulia Tymoshenko said today during a meeting with representatives of the Mykolayiv branch of the Committee to Defend Ukraine.

According to Yulia Tymoshenko, based on GDP figures from March and April “there was a 1.8% drop in production in Ukraine based on state statistics, and a 2.8% decrease in May.” She noted that she has never seen such a “rollback” in economic development in Ukraine.

Yulia Tymoshenko also presented official data from the National Bank of Ukraine, according to which “in the time that Azarov has been in power, direct investment in the Ukrainian economy shrank by nearly one third – 29%.”

“One hundred days have passed and we’ve already taken a $4 billion loan from Russia – 32 billion hryvnias, and at a cost three times higher than what the IMF was giving us,” she added.

In her opinion, $4 billion was borrowed from Russia under conditions that are unfavorable for Ukraine. “If Tsushko announced that the crisis is over, then why borrow such amounts and also issue up to 20 billion? This is already 52 billion hryvnias,” she underscored.

“I wonder what the boundary is to the propaganda being demonstrated today by the Azarov-Yanukovych government’s central media, and what is the limit to what Yanukovych is doing today? There is no limit,” said Yulia Tymoshenko.


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PM Azarov’s report on 100 days of government’s work

Posted by the Editor on June 23, 2010

Analytics / 23 June 2010 | 13:36

PM Azarov's report on 100 days of government's work

PM Azarov’s report on 100 days of government’s work

Dear friends!

The Government’s activity for 100 days has been very eventful and objectively effective. Naturally, everyone wants to see changes as soon as possible, but an obvious contrast is evident – as in the previous two years people have seen mainly talkative heads instead of hard-working hands.

Our results are determined by the fact that after several years of playing in power we managed to form a real government in Ukraine. This is the team of the President of Ukraine that implements the choice of the people in favour of the country’s renewal program. Unity of actions of the President, the coalition and the Government has created a unique opportunity to implement reforming that have waiting for its time almost all the years of our independence.

It is impossible to live further without reforms.

Starting point for the activity of the Government appeared to be much worse than we estimated being in opposition.

In terms of gross domestic product the country is rebounded at the level of 2005, fixed capital expenditures – 2004, industrial production – 2003, construction – 1996.

Monthly we are forced to spend on repayment of debts of the previous government amounts comparable to the cost of thousands of kilometres of roads, bridges, maintenance costs of all hospitals in Ukraine.

The country met 2010 without a law on the state budget. This was done by the previous government deliberately to manage public funds without control, in manual mode. They did great business in crisis and hoped that this wouldn’t come to an end.

I think the showiness (as opposed to efficiency) of the previous government will study investigation officers, not economists.

This must be done so that officials will not more take the power from the people.

So what have we managed to do with the dowry, which we got?

For the first time in the recent years the realistic budget was adopted, ensuring economic stability. However, for the first time within two years the minimum wages and pensions, living wages and relevant social benefits are raised. Everything, that opponents maliciously called impossible, is performing confidently and consistently, because the Government has gotten public finances under control, stopped robbery of the national budget, corruption business in public procurement.

This is the budget of recovery and social support for the citizens of Ukraine.

Foreseen by the Budget 2010 funding for education is by 15% more than in 2009; healthcare – by 8%; social spending – by 29%.

Real wages increased by more than 7% within the last five months, and by the end of the year will increase by 38%. (In 2009 real disposable income of the population decreased by 8.5% and real wages – by 27,4%).

Teachers received the bonus of 20%. They are for the first time in June paid 100% rise of vacation pay. Medicine staff received long-service bonuses of 10-30% of the wage (depending on years of service).

Within three months of the government activity wage debts are cut by almost 200 million UAH.

I want to note the increased income purchasing power has increased. For the first time since 2002 the country fixed the deflation (0.6%), whereas at the beginning of the year inflation amounted 3.7%.

But there are things that the Government categorically doesn’t support. Such shame that people went on strike, blocked roads to get their hard earned money as yesterday Kharkov private builders did, simply should not be. I have instructed the Minister of Industrial Policy to go in Kharkiv and solve the problem crucially.

It is not correct to speak about the termination of the crisis. It is too early. However, we began to deal properly with it: to stimulate domestic consumption to recover domestic production. That means that we
rely on ourselves, and such approach is bringing results.

Industrial production growth showed that the economy comes out of recession. Gross domestic product within five months rose by 6.1%. Industrial production in Ukraine increased in comparison with the same period of 2009 by 12.6%.

The output of chemical and petrochemical industry increased by almost 30%, metallurgical industry – by 21.7%.

Construction industry began to recover, which during the period of “management” of the previous government had losses compared with bombing of buildings.

In the first quarter of 2010 1.5 million square meters of total housing were completed.

Three subway stations of the new Podil-Vygurivska subway line will be completed by the end of 2010. Totally six stations are under construction. In 2011 a construction of the new subway line TroyeshchynaOsokorky (6 stations) will begin in Kyiv. It was restored building of the Podil-Voskresensky and Darnytsky bridges, Darnytsky railway station and bridge over the Dnieper in Zaporizhya.

We signed the Ukrainian-Russian agreement on the completion of two power units at Khmelnitsky NPP. The first stage of the Dnister Hydroelectric Power Plant, the third hydroelectric unit of the Tashlytska HPP, reconstruction of the HES OJSC Ukrhydroenergo are under construction.

The real economy has responded to real actions of the government.

The main thing: we found a life buoy for the economy of independent Ukraine. This is the revision of the enslaving gas agreements. The price for imported gas fell by 100 USD per a thousand cubic meters. Chemical and metallurgical industries are working steadily.

Thanks to the revision of the agreement with Russia, our state annually saves 4 billion USD. This is the cost of building of a new nuclear unit or 4 thousand km of highways, or a large bridge over the Dnieper. In general, the country will save 40 billion USD that will be invested in the modernization of the industry and infrastructure.

It is difficult to overestimate the restoration of good-neighbourly and partnership relations with Russia. Reset in the economic cooperation between our countries has given a second wind to domestic aircraft building, space industry, energy sector, nuclear energy, engineering industry, shipbuilding and so on. I would not like to ride before the hounds because practical results in such high-tech areas appear at least in a year or two. But this is the fact that we have already been provided with nuclear fuel, cheaper gas, offers for power and transport engineering, that we will soon begin forming teams of builders to build new nuclear power units.

Those, who have expected that this will spoil our relations with the European Union, have been making allegations again. After a five-year period of Ukrainian chattering Europe has understood that is dealing with the state that do not have to be pushed for reforms, but dealing with the European country which started reforms itself.

EU High Representatives stated that they are ready to form a free trade area with Ukraine, to sign the Association Agreement, to negotiate a visa-free regime. The EU finally expressed a clear interest in the modernization of the Ukrainian gas transport system.

World expert community objectively assessed a new course of our Government. For the first time during the global economic crisis Ukraine’s rating is consistently growing. Over the last two months, the rating agency Standart & Poor’s has increased the rating of Ukraine three times, returning it to the pre-crisis level.

The European Bank for Reconstr
uction and Development has improved the forecast of GDP growth in Ukraine.

Finally, Ukraine for the first time of its independence has really launched reforms.

The Parliament passed in the first reading a new version of the Budget and Tax Codes developed by the Cabinet of Ministers. When they are adopted as a whole, the budget for 2011 will be drafted on innovation basis.

Regions in 2011 will obtain an additional resource of 23 billion UAH, as regional authorities will receive eight national taxes and duties and 20% of profits from corporate income tax.

Business will feel a significant reduction in the tax burden: the number of tax will be taken a third, income tax rate will fall from 25% to 20%, VAT – from 20% to 17%. Small business will receive for the first time five-year tax holidays.

In addition, the Government decided to reduce by 80% the list of activities that require licenses and permissions. The Government has already submitted such bills to Parliament as:

– Simplification of state registration and termination of business entities;

– Introduction of electronic public register of business entities;

– The beginning of economic activities on the basis of the declaration, not permission.

Simplification of tax, licensing, regulatory procedures is the first step against corruption.

Second one consists in a tough legal treatment of officials’ actions. Now we are scrutinizing all lucrative areas: the State Reserve, Agrarian Fund, State Tax Administration, NJSC Naftogaz of Ukraine and other state structures.

In future legal mechanism will work in a way that must declare not only incomes but also expenses of officials and their relatives.

Cabinet’s press office


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Yanukovych: Soon Ukraine will have effective mechanism of implementing reforms

Posted by the Editor on June 23, 2010

News / 23 June 2010 | 12:51

Yanukovych: Soon Ukraine will have effective mechanism of implementing reforms

Yanukovych: Soon Ukraine will have effective mechanism of implementing reforms

Soon Ukraine will have an effective mechanism of implementing reforms, said President Viktor Yanukovych in Zaporizhia at the enlarged meeting of the Regional Committee on Economic Reforms, according to the presidential press office.

According to the President, regional committees would become an important component of this mechanism. “All the priority projects will be supported at the state level,” said Viktor Yanukovych.

President Yanukovych reminded that main objective of draft plan of reforms until 2014, announced on June 2, was “improving citizens’ well-being and building a strong state, which is able to protect everyone”. He reiterated that it is achievable only through making the economy competitive and the governance – effective. In this context, Viktor Yanukovych stressed it is important to attract more investment into the economy. It also applies to Zaporizhia region, he said.

“It is wrong and unnatural that so few investment projects are realized in such a region,” he said. In President’s opinion, the situation would change soon as already now the revival of national economy is observable. In last 5 months the GDP growth was 6.1%, the growth of industrial production was 12,6%, export increase was 31% and import increase was 16%. “This is a real sign that the economy begins to revive, and that today it needs an impetus,” he said.

Addressing Chairman of State Agency for Investment and Development Oleksandr Taran, who also took part in the meeting, President Yanukovych requested him to provide a report on development of the appropriate infrastructure and training of investment specialists in government agencies and companies in the regions of Ukraine.

According to President Yanukovych, local and central authorities should identify priority investment projects. He also said that each region of Ukraine should organize a competition among investment projects and added that he expects the first such event to be held in the nearest future. “Determine one of the best prepared regions and organize such an event,” he said, referring to Oleksandr Taran.

“Generally, I am satisfied with the business atmosphere of today’s meeting. The correct approach to realization of economic reforms requires turning to innovative investment for economic growth,” said Viktor Yanukovych.

He added that the new Tax Code to be put at public hearings already this week would certainly facilitate attracting investments in the national economy. President Yanukovych expressed thought that the document would be adopted before the end of current parliamentary session.

Speaking about local issues of Zaporizhia, Viktor Yanukovych emphasized that first of all the construction of bridge across the Dnipro in the city of Zaporizhia should be finished. According to him, as for today it is agreed that the state will finance the expenditures that cannot be covered by loans. In his view, such an approach “will allow speeding up the construction at least twice.”

Addressing Zaporizhstal leadership, President Yanukovych stressed that he expects the company to prepare a program of environmental rehabilitation for Zaporizhia. According to him, Zaporizhstal should do it together with Ministry of Environmental Protection of Ukraine. “I promised that we would do everything to improve the environmental situation in the city,” he said, adding that other companies of the region should join Zaporizhstal in the process, too.

At the meeting Viktor Yanukovych also drew attention of local authorities to the importance of de-politicization of staffing. “Do not politicize the staffing policy please. You must make your decisions based upon professional qualities,” he said.


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FM Hryshchenko: Ukraine confirms readiness to assume OSCE presidency in 2013

Posted by the Editor on June 23, 2010

News / 23 June 2010 | 11:01

FM Hryshchenko: Ukraine confirms readiness to assume OSCE presidency in 2013

FM Hryshchenko: Ukraine confirms readiness to assume OSCE presidency in 2013

Foreign Minister Kostiantyn Hryshchenko has confirmed Ukraine’s readiness to assume the presidency of  the Organization for Security and Co-operation in Europe (OSCE) in 2013 and outlined a vision of the future priorities of Ukraine’s OSCE presidency, he was speaking in Vienna at a meeting of the OSCE Standing Committee,  UKRINFORM reported.

The Ukrainian diplomat also briefed 56 heads of delegations of OSCE participating states on the main priorities of domestic and foreign policy of Ukraine. The minister stressed Ukraine’s readiness to actively participate in discussions on the platform of the OSCE initiatives in strengthening the architecture of European security and promote a common vision among OSCE participating states of security threats and challenges and ways to overcome them.

The Ukrainian Foreign Minister stressed the importance of strengthening the capacity of the OSCE in conflict prevention and settlement and ensuring the presence of the OSCE in conflict zones. He also reiterated Ukraine’s readiness to continue its active participation in the Transnistrian settlement in the “5 +2” format based on maintaining the territorial integrity and sovereignty of the Republic of Moldova. Hryshchenko appreciated the role of the OSCE in election observation in our state and in promoting democratic reforms, strengthening human rights and freedoms and the rule of law in OSCE participating states.

In a statement issued following Hryshchenko’s speech, the European Union praised Ukraine’s intention to assume the OSCE presidency in 2013 and encourage adherence to common values and commitments of the OSCE. The EU expressed continued support for Ukraine’s European integration aspirations and the willingness to further promote the process of democratic reforms in our state. The EU welcomed Ukraine’s steps in the sphere of free and democratic elections, the position of the head of state to ensure freedom of speech in Ukraine, the continuation of reforms in all areas.


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