Thursday, November 12, 2009

Political farce and fantasy crippling Ukraine

by Tammy Lynch

In a May 2008 blistering editorial, three MEPs criticized Ukrainian President Viktor Yushchenko for his continual battles with Prime Minister Yulia Tymoshenko. MEPs Elmar Brok, Jas Gawronski and Charles Tannock wrote, “There is no more depressing sight in politics than a leader who, desperate to cling to power, ruins his own country in the process.”

Today, it seems that we can adjust the sentence to the following: “There is no more depressing sight in politics than a leader who, knowing he will soon lose power, ruins his own country in the process.” Yes, the sentence may be a tad hyperbolic – President Yushchenko isn’t likely to “ruin” his country. But, as he heads into a presidential re-election campaign with 5 percent support, he certainly seems to be doing enough damage.

This week, in the midst of a severe H1N1 outbreak that may have killed 213 people, Yushchenko announced he will veto legislation designated to provide $125 million for flu medications and hospital equipment.

Prime Minister Tymoshenko dramatically responded:“Each person who dies today is the personal responsibility of the president.” She suggested (without providing evidence) that the government was forced to cancel delivery on a shipment of ventilators and incubators that had arrived at the border from Austria.

The President claimed that the current budget is underfunded by 30% and, therefore, the country cannot afford the cost of the measure. To sign it, he said, will result in “money printing.”


Just a week before, Yushchenko signed questionable legislation raising the country’s minimum wage by 20 percent.

The pre-election maneuver was passed by parliament over the objections of Tymoshenko, who called it “an atom bomb under the finances of the country.” The Ukrainian government suggested the measure would add $10 billion of expenditure to the already deficit-laden budget by the end of fiscal year 2010.

Indeed, the measure ordered the government to immediately raise wages and pensions (officially on 20 Oct 2009), despite the 2009 budget being approved by parliament with the lower figures.

Unable to fulfill the legislation’s requirements, the government is challenging the law in the constitutional court.

The IMF responded quickly to Yushchenko’s signature on the legislation, “which is at odds with the objectives of the authorities’ program.” The Fund delayed disbursement of a $3.8 billion tranche from its $16.4 billion bailout program. This tranche partly was to be used to pay Russia for gas.

Of course, this triggered a warning from Russian Prime Minister Vladimir Putin that Russia will turn off Ukraine’s gas if it fails to pay on time next month. He also warned that Russia is prepared to turn off gas to Europe if Ukraine taps the transit lines. Ukraine appears to have no means to pay for November’s gas, after paying on time all through this year.

To be sure, there is support in Ukraine for raising wages and flouting the IMF, buoyed by worries of government corruption. But, over the last two weeks, Yushchenko has added up to $10 billion to the country’s deficit, taken a stand against flu medications while doing nothing to stem the virus’ tide, invited criticism from Russia and created concerns in Europe over gas payments. Well done, Mr. President.

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