Opening statement by Prime Minister of Ukraine Arseniy Yatsenyuk at a session of the Cabinet of Ministers of Ukraine, April 1, 2014

We have a number of important issues of today's agenda.

I’d like to begin from what Ukraine and millions of the Ukrainians in regions wait for. The matter concerns a local self-government reform and a reform of local authorities.

People in the regions want to control authorities. People in the regions want to appoint authorities. People in the regions want to have responsible authorities. And the Government of Ukraine should give a clear answer what will be done with the aim of decentralization of power, how someone who lives in Lviv or Donetsk will be able to come to the regional authority and say: "We have appointed you, and we demand your responsibility and performance of those things that you’ve promised."

Now we have the situation when all power is concentrated in regional state administrations. People pretty often confound, they name them governors. Guberniyas are in the neighboring country, but we have regions (oblast). These heads of regional state administrations are appointed by Kyiv, and the people who represent the interests of the central government have often no concern with the corresponding region, and so they work with the left hand taking into account the fact that the decrees are signed in Kyiv.

So it seems to me that what Volodymyr Borysovych (Hroisman) has undertaken important function of approval of the concept is the first step to ensure that we have the responsible local authorities in Ukraine. And the first decision that has to be taken is the elimination of regional state administrations and district state administrations.

I’m for the decision that the executive committees of the respective local councils should be elected by local councils, and that is where the executive committees must take full responsibility for work in the region, for the financial development of the region, infrastructure and construction of roads, schools and hospitals. It is not by Kyiv to determine where to send capital expenditures. If there is the executive committee, the executive committee is elected by people – you are welcome, just a desire you need and we will transfer responsibility, rights and powers.

The second concerns the fiscal component or budgeting. We should interest the regions so that they work on creation workplaces and so that they work on business development. How to interest? The instrument, on the one hand, is simple, on the other hand, is very effective - some income tax should be leave for the territory, and thus the relevant head of the executive committee will do everything to ensure that local companies worked and pay more taxes because he has a direct interest.

The third issue concerns local taxes and fees. We should give possibility to regions, regional executive to set local taxes and fees, rates of such taxes, and it will also encourage them, for example, in order to collect more of the taxes that are administered directly on their territories.

With regard to the humanitarian aspect, it is necessary that the relevant departments responsible for education, science, have levels how to form quantity of schools, how to form a specialization of a school. So that the region could respond to those requests that people put. If people say: "you know, we need more specialization of some schools, because we see that our children are talented and we have all possibilities for this - so let region make appropriate decisions at the expense of revenue, that is, let they form the corresponding system of education, let they deal with preschool education, bear responsibility before the people who elected them.

Separately, I would like to point the following within this concept. I learnt it carefully, Volodymyr Borysovych (Hroisman), I fully support it, but I would like that we discuss its deadlines. Because here, you consider two stages, it is absolutely correctly. But, I consider that the first step has to be taken immediately. What is in it?

In order to realize this concept and in order to carry out the local self-government reform, we must change the Constitution. I wish to remind everyone, first of all, I address the Parliament that there has been set up the Temporary special commission for amendment of the Constitution. This commission is represented by al the political forces. Thus, the project of making changes to the Constitution must appear on April 15.

As the members of the Government of Ukraine, we express our political and economic position, that we advocate handing over the rights and responsibilities to the regions. And for this reason, the new Ukrainian Constitution must undergo changes regarding formation of local authorities, I mean, first of all, regional and district state administrations, which must be liquidated in the text of the Constitution. They must be replaced by prefects who instead of splitting funds are exceptionally responsible for nomocracy and order on the subordinate territories. 

The third, the local and central Prosecutor’s Offices respectively must be deprived of general supervision function.

The fourth, the new redaction of the Constitution must contain clear sections related to the local self-government issues in order to bring these sections to compliance with the European Charter of Local Self-Government. We lack time for that. April 15 is the first date when the draft Constitution must appear, afterwards it must be send to the Venice Commission. The first round of voting with 226 supporters, the second round with 226 voices and the final redaction of the Constitution must be endorsed in September of the current year. 

We don’t have three years to wait for the changes. We must act fast, efficiently and correctly.

Therefore, Volodymyr Borysovych, when you report on the concept, I beg You after the Government’s session to explain every point of this concept to the respected media representatives. I have the only request for You: to cut the terms and include the issue of making changes to the Constitution, as it must be the basis in order to avoid the situation that every new President rewrites the Constitution for himself. That will do. Stop! Now the Constitution will be written by the Ukrainian people through the Ukrainian Parliament. 

The second question is of no less importance. Pavlo Dmytrovych, I am asking You as well to communicate afterwards with the journalists and tell that in fact the Justice Ministry and the Government are working to destroy the monopoly on selling properties which were sold on court’s decisions, but it was the property withdrawn by banks for loans, it was the property withdrawn by the State Executive Service, it was the property the gains from which were received by only one monopoly, at this, what cost UAH 1 thousand was sold for UAH 500 while the person had to pay another UAH 500 to the bank or some other department.

We shall change the property realization system, from now on it will be automated. We haven’t reinvented the wheel, the similar system was made in Georgia, when through the transparent and public automated auction system they sell any property at the real cost avoiding any mediators, corrupt officials or situations when people lose up to 50% from the cost of the property, which they could have gained. Thus, these are two principal issues; nevertheless, we have a lot of financial and economic problems. I would like to consider them today at the Government’s session.

To wind up, I hope that it has been the last story I see in mass media, about corteges.

I am asking all the attendees to commence work. After the Government’s session, Volodymyr Borysovych and Pavlo Dmytrovych, please explain every point in details.

I thank media!