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Ukrainian lawmakers pass 2015 budget with estimated shortfall of $4 billion

December 29, 2014, 7:23 UTC+3 KIEV
“We will be adjusting it depending on the talks with international financial institutions,” Prime Minister Arseny Yatsenyuk said
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© ITAR TASS/ Maksim Nikitin

KIEV, December 29. /TASS/. Ukraine’s parliament, the Verkhovna Rada, passed on early Monday morning the country’s state budget with an estimated shortfall of some $4 billion.

With the necessary amount of 226 votes to pass the budget, a total of 233 Ukrainian lawmakers voted in favor of the proposed document.

Prime Minister Arseny Yatsenyuk said presenting the draft state budget to the parliament said that the document was “candidly far from being perfect” and required adjustments, which should be introduced by February 15, 2015.

“We will be adjusting it [the budget] depending on the talks with international financial institutions,” Yatsenyuk said.

Submitting the document for the voting, the premier voiced only several provisions of the budget spending, saying in particular, that the envisaged share for the country’s defense expenses would stand at 90 billion hryvnias (over $5.7 billion).

Yatsenyuk added that the sum of some 32 billion hryvnias ($2.03 billion) from the state budget was envisaged to be allocated next year as state appropriations to the Ukrainian national energy company Naftogaz.

The prime minister said that for Ukraine the next year of 2015 “will be very difficult in terms of economic stability.”

While Ukrainian lawmakers debated on the state budget issue, Batkivshchina political party leader Yulia Tymoshenko announced that neither she nor some other lawmakers had the full text of the budget document.

According to Ukraine’s UNIAN news agency, the state budget was drafted based on the 4.3% economy decline and 13% inflation. The budget income was fixed at 475.240 billion hryvnias, the spending at 527.194 billion hryvnias and the maximum budget deficit pitched at 63.670 billion hryvnias.

The national currency’s exchange rate currently stands at 15.77 hryvnias per US dollar.

Yatsenyuk’s voiced figure for 2015 budget’s military spending comes as 7.8% increase on the earlier announced figure of 82.9 billion hryvnias, meaning a $443 million raise.

Last Tuesday Ukrainian Finance Minister Natalia Yaresko presented the country’s parliament, the Verkhovna Rada, the draft budget for 2015 reporting that the minimum defense spending next year would stand 82.9 billion hryvnias.

According to her, the budgets share for the military purposes would stand at “82.9 billion [hryvnias] for the defense, plus six billion in guarantees and a possibility of 1.5 billion from a special foundation in yields from confiscated property.”

Ukrainian Defense Minister Stepan Poltorak said early this month that some 40,000 people would be called up for Ukrainian military service next year, bringing the number of troops to 250,000. The United States and the European Union, according to him, would provide funding for the military reform in Ukraine.

According to official data, Ukraine’s external debt reached $72.9 billion, and so far $14 billion has been repaid. Prime Minister Yatsenyuk said in early December that the country’s gold and foreign currency reserves dropped below $10 billion, and there were no grounds to expect them to increase.

Meanwhile, the increase in Ukraine’s military budget would be apparently at the expense of social spending. The government already announced plans to cut state spending on the social sphere by almost $1 billion.

Ukraine’s Finance Ministry introduced a new social policy under which some 100,000 teachers are to be sacked over two years. According to earlier reports, the number of unemployed in the country with a 42 million-strong population reached two million.

The spending on Ukraine’s science and education would also be cut by $200 million. Over 400 schools in rural areas would be closed, and some social benefits, including free meals and extra payment for academic degrees, would be scrapped.

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