Ukraine PM requests USD 1.4 bln from Yanukovych for the budget

Ukrainian Prime Minister Arseniy Yatsenyuk said he requested that the Procurator General of Ukraine wire to the state budget USD 1.4 bln that was arrested from the Ukrainian bank accounts of ex-president Viktor Yanukovych and his entourage, reported the Interfax-Ukraine news agency on May 12.  “If the funds are returned to the budget, the place from which they were stolen, that will enable the improvement of social standards for the population and additionally enable financing for the army and the anti-corruption campaign,” he said.

Alexander Paraschiy: One can hardly concoct a more brazenly populist ploy than Yatnseyuk’s latest statement. Perhaps nothing sounds more appealing to the public than taking money from an alleged gang of thieves (who are fabulously wealthy at that) to solve the nation’s financial problems. However, even apart from the difficulty in finding legal mechanisms (which apparently exist), it is difficult to imagine that Ukraine’s banking system can easily survive the transfer of USD 1.4 bln in private deposits to the budget. In the current situation, this move can be arranged only at the expense of the gross international reserves of the National Bank. All in all, we do not see this initiative moving much far than standard political speculation (although this one should be remembered as a particular gem).