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7 September 1998
For immediate release
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President Kuchma Meets With Leaders Of Political Parties To Discuss Economic Situation In Ukraine

On September 4, President Leonid Kuchma met with a group of Ukrainian political party leaders to discuss the current economic and political situation in the country, particularly the financial crisis and the agenda of the parliament's second session. The political party leaders expressed support for President Kuchma's efforts aimed at continuing reform, stabilizing the economic situation, and preventing a collapse of the national currency. The group of political party leaders criticized the "parliamentary forces raising tension in the country by calling for the government's resignation instead of engaging in constructive work." They urged all healthy parliamentary and public forces to unite in the interest of the country. The current difficulties in the country are "not about the president, the government, or parliament," Mr. Kuchma told the party leaders stressing the need for everyone to work to achieve political and economic stability. The party leaders signed a Memorandum on the Political Situation in Ukraine.

Cabinet Of Ministers To Draft Procedures For Charging Non-State-Run Banks For Use Of Extrabudgetary Funds And Budgetary Means

President Leonid Kuchma signed a decree which instructs the Cabinet of Ministers and the National Bank of Ukraine to draw out within two weeks procedures for payment of fees by non-sate-owned banks for use of budgetary means and extrabudgetary funds, dependent on the situation in Ukraine's financial market. The decree also nullifies some provisions of the Ukrainian President's earlier decrees on measures to tighten financial discipline and on steps to ensure budgetary revenues and prevent a financial crisis.

Government And Parliament Coordinating Their Financial And Economic Measures

On September 3-4, Verkhovna Rada Chairman Oleksandr Tkachenko convened a meeting of government and parliamentary officials to discuss joint financial and economic measures. The meeting was attended by Prime Minister Valeriy Pustovoitenko, National Bank of Ukraine Governor Viktor Yushchenko, Finance Minister Ihor Mitiukov, Economics Minister Vasyl Rohoviy, and heads of various parliamentary committees and factions. Participants in the meeting discussed proposals on measures aimed at improving the financial situation in the country. Commenting on the outcome of the meeting, Mr. Tkachenko said that the participants decided to concentrate the efforts of the parliament and its committees and factions directly involved with the financial and banking system on drafting a series of proposals on relevant legislative acts. Mr. Tkachenko disclosed that the meeting considered proposals on parliamentary measures aimed at stabilizing the financial system and coordinating them with the proposals of the government and the National Bank of Ukraine. A coordinating council is to meet at the beginning of this week to consider further steps. Approved plan of action is to be submitted for consideration at a parliamentary session not later than September 8.

Speaker Tkachenko: Only Cooperation Between Parliament And Government Will Facilitate Timely Adoption Of 1999 Budget

Verkhovna Rada Chairman Oleksandr Tkachenko told journalists on September 4, that the parliament's activities should focus on adopting laws aimed at boosting the economy, stabilizing the national currency, and drafting a national program for 7-8 years. According to him, implementation of such a program will enable the country to gradually emerge from the present economic crisis and facilitate Ukraine's rebirth as an economically strong nation. The parliamentary leader stressed an importance of making significant but not radical corrections in the country's reform program. First of all, the priorities of the privatization program have to be determined, Mr. Tkachenko said. According to him, the privatization programs implemented over the past seven years have fragmented and almost destroyed such important sectors as power and agriculture. He also stressed the need for the nation's banking system to be manageable. Commenting on his meeting with the World Bank's representative in Ukraine, Mr. Tkachenko said he asked the World Bank to soften its loan conditions and take into consideration the difficult economic situation in the country. The speaker expressed the hope that the drafting of the 1999 state budget will be completed by mid-October, adding that timely adoption of the budget requires coordination of the activities of the government and Parliament.

Prime Minister Pustovoitenko Stresses Need For Closer Cooperation Between Government And Parliament

In Prime Minister Valeriy Pustovoitenko’s opinion, the first day of the parliament's second session again demonstrated the need for closer cooperation between government bodies and the parliament. Addressing a meeting of ministerial and departmental heads on September 3, Mr. Pustovoitenko stressed that such cooperation will enable the two branches of government to resolve differences arising during the drafting of laws. Regarding parliamentary criticism of government measures to clear pension debts, Mr. Pustovoitenko said that he recently toured seven regions of Ukraine, and ordinary people in all the regions approved the government measures. According to him, only the enterprise and factory directors whose interests are threatened by the measures disapprove of the measures. He added that they are now trying to influence members of parliament. Money had been allocated for paying the wages of teachers in the Kiev, Chernihiv, Kherson, and Ternopil regions, Mr. Pustovoitenko said. A working group headed by Deputy Prime Minister Serhiy Tyhypko was set up at the meeting to consider to work out jointly with parliament several anti-crisis measures aimed at preserving financial and economic stability in Ukraine.

Government Will Cancel Agreements For Sale Of Shares In Enterprises If Buyers Fail To Fulfill Their Obligations

The Cabinet of Ministers will take decisive measures to restore state ownership of shares in enterprises whose buyers fail to fulfill their investment obligations as well as the assets of privatized enterprises owing huge debts to the state and the Pension Fund, Prime Minister Valeriy Pustovoitenko told Parliament on September 2. According to him, the Cabinet of Ministers is currently compiling a list of such enterprises that will soon be submitted to the parliament for approval. He added that the list consisted of eight enterprises as of September 2.

World Bank To Decide In October On Granting Loans For Development Of Power Sector In Ukraine

In mid-October, the World Bank will make final decision on granting Ukraine the next tranches of a loan of $ 250 million for development of the energy market, Serhiy Milenkyi, a specialist with the World Bank's Kiev representative office told Ukrainian News. The main condition for providing the remainder of the loan is Ukraine's fulfillment of the prior actions set for the sector's financial recovery. According to a financial recovery program that the government approved for the power sector on April 18, 1998 electricity consumers were to pay in cash at least 18% of the cost of their electricity consumption in August and September, provided that remainder is fully paid through other means. Consumers paid for 71.7% of the electricity (worth HR 4,879 million) they consumed in the January-July, 1998. Only 827 million hryvnia (27.1% of the total amount paid) was paid in cash. According to Milenkyi, another of the main conditions set by the World Bank is that the National Electricity Regulation Commission should gradually adopt market principles in setting electricity tariffs as well as in setting the prices at which power supply companies are to transport and transmit electricity. The current charges for electricity transmission and transportation services are set separately for each power supply company and will remain unchanged during privatization of power companies. World Bank representatives say it is presently unlikely to consider granting a loan of 240 million dollars for completing the Dniester hydroelectric power station since Ukraine has not yet provided a plan for financing the remainder of the project. Meanwhile, Ukraine considers unacceptable the terms of a commodity loan proposed by a group of German companies led by Siemens; the commodity loan was intended for financing 20% of the cost of the project.

Zaporizhya Non-Ferrous Metallurgical Plant To Launch Manufacture Of Titanium Sponge

According to sources at the Ministry for Industrial Policies, the Zaporizhya Non-Ferrous Metallurgical Plant is ready to begin manufacturing titanium sponge thanks to the Ukrainian State's commodity credits granted in 1997 and 1998, and a $ 13.5 million loan from the Swiss company Bearko SA. In addition to titanium sponge, the plant's management is contemplating production of ready-made rolled titanium.

"Kharkivan Fat Combine" Awarded Diploma By Us Association For Business Promotion

The "Kharkivan Fat Combine" joint-stock company has been awarded a diploma by the US Association for business promotion. The Kharkiv-based joint-stock company is Ukraine's leader in manufacture of vegetable oils, margarines and similar products. Some of its oil brands contain additives which help human body get rid of radionuclides. Recently, the Kharkivan Fat Combine marked its 65th anniversary.

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