Ukraine parliament to review 2016 budget, related bills today

Ukraine’s parliament will convene today for an extra session to hear Finance Minister Natalie Jaresko’s presentation of the 2016 budget and to consider eight related bills, reported the vesti-ukr.com news site. The budget won’t be voted on today, the report said. The bills include determining the state enterprises to be privatized and introducing a special procedure to approve the 2016 budget, which is opposed by the Fatherland faction.

In addition, Fatherland and the Radical Party have declared their opposition to the budget and tax reform altogether. Fatherland MP Alyona Shkrum said her faction, and the Self-Reliance faction, oppose the elimination of the simplified tax regime for SMEs. She said it wouldn’t be a problem if the budget is approved in January instead of late December, as is hoped by the coalition leaders.

Zenon Zawada: A rift within the coalition government is apparent between the establishment factions – Petro Poroshenko Bloc and People’s Front – and the pro-Western “opposition” (Self-Reliance, Fatherland and Radical Party). The establishment forces clearly want to approve the budget by Jan. 1, which will go a long way toward securing the next IMF tranche within several weeks.

The “opposition,” on the other hand, needs to position itself as defending the public’s interests, which we view as necessary in some cases. Yet these factions also have made-for-television populist maneuvers in their plans, considering that the spending cuts will be harsh.

We expect this will be a very messy process that could be the death knell for this coalition government, which is being forcibly held together by the president, who is motivated by the need to secure the next IMF tranche and the fear of renewed Russian aggression.