Remarks by Prime Minister of Ukraine Arseniy Yatsenyuk at a meeting of Government of Ukraine on November 19, 2014

First, I would like to start with certain domestic issues - those issues requiring urgent consideration. It concerns creating a coalition, forming a new Cabinet of Ministers of Ukraine. To avoid it being turned into the neverending series.

I have studied in detail a draft coalition agreement, which was posted on the website of the Bloc of Petro Poroshenko. I openly declare that I’m ready to sign a final version of this coalition agreement. There are a range of things that need to be changed, added and completed. The country needs to know exactly what the new coalition will do and in what terms. I reiterate once again we have no time.

I call on other political forces to complete talks on the text of an agreement and start working instead of talking and scribbling.

Under the Constitution of Ukraine, a coalition agreement becomes the basis of the main binding constitutional document – a program of the Cabinet of Ministers of Ukraine. In the framework of the work of a new Government such a program is approved for a year, and it should be a simple, strict and clear action plan similar to that one adopted simultaneously with the appointment of the incumbent Government (it was an Action Plan of the Cabinet of Ministers endorsed on 27 February), and which should be similar to the one approved by the Government as the recovery plan. It includes a specific objective and the deadline.

The Government is ready to report and has already reported on the current program. Hence, I instruct again to immediately present to the public and the country an action program of a new Government, which is to comprise five key points that correspond to the basic provisions of a draft coalition agreement.

First is the sector of national defense and security, ending the war, providing the army with armament, restoring order in the country, equipping the Ukrainian Armed Forces. It should be a guarantee for future reforms. Peace, security and the strong army are identical to the concept of strong and successful reforms.

The second block of issues includes upgrading justice and law enforcement sector. The Ministry of Justice has prepared all the bills on the new judicial system, which we had already discussed in the Supreme Court of Ukraine. Moreover, the Minister of Internal Affairs of Ukraine has developed and submitted a concept of reforming of the law enforcement system for public discussion.

The third comprises budget and tax reform. I congratulate the political forces as they supported the tax reform, initiated and developed by the Government of Ukraine - namely, a reduction of the number of taxes from 22 to 9. Moreover, the Government had also elaborated a new draft Budget Code providing fiscal decentralization.

And the core issue is a budget. Without a budget there will be no program with the International Monetary Fund and other institutions that are now supporting Ukraine. There are no private investors in a country at war.

So a key requirement to a coalition and, certainly to a new Government, is to immediately agree all budget parameters and be ready to vote for this budget, instead of resort to discussions and stories about how we wished to make things better. If you want to make things better, just do it.

The third block applies to the public administration system. We have emphasized here not once – the public administration reform. The Government has launched this reform through a two-fold reduction in the number of supervisory bodies and functions in the country that is regulatory functions. There is a number of laws that require immediate approval.

Thus, it reduces the powers of Government, and not only the Government’s ones. We must fight for the country, not for power. Therefore, I hope that a coalition will also support the balance of power in the country rather than the concentration of power in the hands of one person, as well as deregulation and cutting the powers of all branches of the Ukrainian government.

The final thing is execution and abiding by laws on curbing corruption. The laws have been worked out, the basic law has been adopted. Now it is the time to implement those bills that have been already passed by the Parliament and require immediate execution, as well as curbing corruption – and of course, it means the process of lustration and purification of authorities.

A number of public authorities, including law enforcement bodies, have not yet begun to implement the law. And persons, who are subject to dismissal from the law enforcement bodies with special status, still occupy these positions. I hope that law enforcement bodies will speed up the implementation of the law.

I want to assess the work of Interior Minister Arsen Avakov who have actively engaged in the implementation of the law on the purification of power.

Another issue of the Government’s agenda today is I would like us to approve a draft Decree of the President of Ukraine which envisages a launch of a unilateral process of demarcation of the state border between Ukraine and Russia.  

Russia once again fails to fulfil its obligations and the joint Ukrainian-Russian demarcation Commission hasn’t yet started work. Thus, the Government is taking a decision to endorse of the draft Decree of the President on the unilateral demarcation of the state border, and also to prolong relevant activities to tighten security of the state border and execution of the European Rampart project. If you like it more, you can use the Wall.

Regarding an international aspect, yesterday we had a series of international meetings, namely with Prime Minister of the Kingdom of Norway Erna Solberg, German Foreign Minister Frank-Walter Steinmeier. In response to the habitual statements of the Russian side I would like to emphasize once again - and this is a common position of the Head of the Ukrainian state and the entire Ukrainian Government: the best and most effective type of negotiation is the Geneva format, as was announced by the President of Ukraine and by me personally.

Russia is by all means trying to abandon this format and it offers us Abkhazia number two on Ukraine’s territory. I want to translate into Russian – [speaking Russian – ed.]“We won’t engage in direct negotiations with the Russian terrorists”. If you want peace, just abide by the Minsk agreement.

To guarantee peace it is required a format which is acceptable to the entire world and, first of all, acceptable to Ukraine. We need guarantees. Hence, we used to insist and still stand for the need to stick to all twelve points of the Minsk accord. It is just Russia and the Kremlin which have made the population of Donetsk and Luhansk hostages and caused the situation close to a humanitarian catastrophe. There have already broken out riots against the so-called Russian world having AK guns in their hands. The Government will continue the attempts to deliver humanitarian aid there. While Russian mercenaries are on the territory of Ukraine, there is no single opportunity to direct there any social benefits or funds. People are living in poverty!

Hence, Russia must execute the Minsk agreement instead of playing thimbles and trying to legalize bandits and terrorists.

No elections have been held in Donetsk and Luhansk. And another lawful authority, apart from the Ukrainian authority, doesn’t exist on the territory of the Ukrainian state. Just the Ukrainian government alone, which has been elected in compliance with the Ukrainian laws and represents the interests of the Ukrainian people, but not those of the Russian regime.

Separately, I would like to inform everyone today that the Government decides on additional capitalization of the key state-run bank - Oschadbank. Together with the National Bank and the IMF we’re increasing Oschadbank’s charter capital by UAH 11 billion. These funds should be directed to financing and supporting the Ukrainian economy. On the one hand, it is more stable state bank, as it is to increase its capital. On the other hand, this is an opportunity for the state bank to issue loans to the economy and to keep key sectors of the Ukrainian economy afloat.

I want to remind you that Oschadbank runs an energy efficiency facilitation program. I’m asking all the public authorities and Oschadbank to expedite the implementation of this program. The replacement of natural gas was, is and will be a key task of either this or the next Government. We’ve managed to diversify energy sources within seven months, but this is not enough.

Moreover, we are to back a decision of the Ministry of Finance on cutting the cost of excise seal on alcoholic beverages, as the cost of excise seal was artificially increased to pay royalties, in order not to control the circulation of excisable goods, but to give a chance for someone to earn instead. There were aired different visions on this issue, also among various business associations. We have a common vision – one shouldn’t pull money out of the pockets of citizens and transfer it to offshores. I hope the producers of excisable goods, particularly alcohol, will also meet their obligations. On the one hand we have raised the excise tax. On the other hand we will reduce the load cost for manufacturers of excisable products.

So, dear friends, let’s pay taxes. The Government does its work and you should do yours - legalization of the market and paying taxes.

Today, following the Law of Ukraine "On the Cabinet of Ministers of Ukraine", which clearly identifies that the local state administrations are accountable to the Cabinet of Ministers, we would like to hold a serious conversation to help Kyiv municipal state administration to resolve the pressing issues of social and economic development of Kyiv, to help find additional resources. As, if Kiev lacks necessary resource then which part of Ukraine has it, as all key taxpayers are concentrated just in Kiev? To understand all the issues that I personally worked out with the Minister of Finance, Minister of Health and I had a meeting with the leaders of Kyiv municipal state administration, and the Government will prolong hearing the reports concerning activities of each regional state administration. They have to keep in mind their responsibility to the country and the people.

So let's move on to considering the state of implementation by the Kyiv municipal state administration of revenues and expenses, so that we could figure out what is needed from the Central Government to ensure the demands of the Ukrainian capital.

Concerning the latest figures on displaced persons in the city of Kyiv and in other areas?

In Ukraine we have today 466 thousand internally displaced persons. We have now put in the register already 212 thousand people in total in Ukraine.

In Kyiv alone, this figure is about 20 thousand. But the largest amount is anyway in Kharkiv, Donetsk, Luhansk regions, in Odessa.

Good, so after considering these issues I air the following requests and relevant commissions.

First, with regard to the draft state budget for 2015 and the city budget.

A decentralization issue, when in reality it concerns the fact that the Government is ready to hand over a part of the financial authority to the local level, it is, on the one hand, the formation of an additional resource base, for Kyiv alone it makes up about 40% of extra income.

On the other hand, it is also an additional power for all local authorities, as on the one hand they obtain certain rights, and on the other there is always a responsibility.

Therefore, the first task for the future coalition, for all of us, I appeal to political forces and to Vitaly Volodymyrovych [Klytchko – ed.] to support a new Budget Code to ensure the budget of Kyiv, as also the budgets of other cities, to be much more balanced.

Second, regarding additional funding. We have allotted for Kyiv UAH 1.8 billion, UAH 200 million have remained until the end of the current year. Let the Kyiv administration take decisions. If necessary - we have these funds, we will transfer them faster. You just have to plan till the end of the current year, as if you don’t see the end of the year, you may have arrears of wages.

Third, it applies to officials.

Unpleasant issues.

We have cut 10% officials for the last 6 months. In Kyiv you will have to do the same. I tell you publicly for the entire country: I'm ready to share political responsibility for unpopular decisions with you, including regarding Kyiv. There is no other option. Like we did throughout the country.

The next thing, the tax debt. An accumulated tax debt makes up UAH 600 million. I hereby give a commission to the State Fiscal Service, Igor Olegovych, without delay, together with the Kyiv municipal state administration to take measures to repay the debt worth UAH 600 million.

A separate issue is payment for land. If you need certain solutions from the Government, and I know that this is the responsibility of the local authorities, we are ready to approve. Friends, raise the rates, fill the register of these land plots. If you need decisions from the Government, we will take it by the end of the day.

I fully support the position that You have begun to develop, it is a card of the Kyivan.

We are talking about the actual order in the benefits and subsidies.

Therefore, the card of the Kyivan has to become one of the key tools to organize social benefits, and as a pilot project, just show it not in Kyiv, and we will make similar decision all over Ukraine.

Now, what concerns funding hemodialysis.

Friends, just settle the problem . You have there UAH 0.5 billion. Do you need additional funding from the reserve fund? Then we can find it somewhere, we will pay. Therefore, it is also our joint responsibility to all the people. I just require resolving an issue of funding hemodialysis by the end of the day. If you are unable to redistribute your funds, then the Government will take, once again we will help Kyiv city, and will take an order to finance additionally.

Separately, I would like to appeal to the Ministry of Regional Development. We should actively support the local communities and to communicate vigorously in order not to delay with solving the problem until it is difficult to solve.

And we commence the process of preparing for the adoption of a new law on the state budget. If necessary, please, with deputies of Kyiv municipal council, the Government and the Ministry of Finance are ready to work out basic budget parameters.