President & Political Council To Make Decision On Kryvorizhstal Windfall This Week.

President Viktor Yushchenko said he will hold a political council (which is made up of Cabinet members, the presidential secretariat and the leaders of parliamentary factions) meeting on November 5, to decide how to spend the USD 4.8 bln the government received from the sale of Kryvorizhstal. According to the President, a special council made up of politicians and business leaders has already been formed to discuss the issue. The President added that USD 860 mln will be returned to the previous owners of Kryvorizhstal and that USD 1.4 bln would be used to cover the budget deficit in 2005. Concorde Capital: It will be interesting to see how the government decides to use its new-found wealth. Since the auction, the Yulia Tymoshenko Block, the Socialists and the Party of Regions have said the money should be spent on social programs. However, at the last political council meeting Yushchenko said they should shift their economic ideologies away from consumption budgets and focus on developing Ukraine’s future. Any major expenditures on social programs would cause inflation to skyrocket, however, traditionally before any election it is difficult for politicians to resist the popular support spending on these programs provides them. This was the case in 2004, just before the Presidential elections.