Parliament Lukewarm on Draft Budget.

The Regions, Socialist and Communist parties voted today to “accept into consideration” the Cabinet’s draft 2007 budget at its first hearing, while postponing a vote on the first reading. Leaders of the pro-presidential Our Ukraine party opposed the draft, focusing their attention on a proposed change in the way funds are allocated to local budgets, which they argue would lead to arbitrary favoritism of eastern regions. Meanwhile the Socialist party called for an increased deficit to fund more social spending. Tom Warner: The process of adopting the budget will show how well President Yushchenko, his party and the dominant Regions party can work together on economic issues. Regions could opt for the non-confrontational option of negotiating early with Our Ukraine, thus securing presidential approval, or Regions could turn to the Socialists and Communists and push through its version of the budget with extra spending added, and then face a possible presidential veto. Today’s vote signaled that Regions hasn’t yet decided which of those two paths it wants to take.