Rada postpones voting for 2021 budget to Dec. 15

Ukraine’s parliament has scheduled voting on the final
version of 2021 state budget for Dec. 15, MP Yaroslav Zhelezniak wrote in his
blog on Dec. 7.  Besides this, the Rada may vote next week for restoring
the power of the National Agency for Corruption Prevention, which was cancelled
by the scandalous Oct. 27 ruling of the Constitutional Court.

Recall, the Cabinet approved the final draft
of the state budget on Nov. 26 and filed it with the parliament the next day.
By law, MPs need at least 10 days to study the draft budget before voting. In
this way, it was previously expected that the budget would be voted this week.
PM Denys Shmyhal earlier hoped that approval of the 2021 state budget would
allow Ukraine to reach some progress in negotiations with the IMF on the first
review of the SBA program (at least getting the IMF mission scheduled) which would allow Ukraine to initiate the placement of
international Eurobonds. Shmyhal estimated that
Ukraine has a reasonable chance to do the placement by mid-December.

Alexander Paraschiy: Now that
the earliest date for the budget’s approval is Dec. 16, Ukraine will have too
little time to get any positive feedback from the IMF and place international
Eurobonds before the Christmas holidays. This significantly decreases the
ability of the government to borrow any money by the end of this year.

Ukraine needs to borrow at least USD 3 bln in December
to partially finance the 2020 budget deficit. As an international Eurobond is
becoming a less likely option, and taking into account that demand for local
government bonds is not high enough (only USD
566 mln equivalent of local bonds were placed yesterday,
on the background of scheduled bond repayments in the equivalent of USD 740 mln
this and next week), the government will have to either significantly raise the
rates on local bonds in the coming weekly auctions, or to try finding some
bridge financing, locally or abroad.