aaus-list @ ukrainianstudies.org -- [aaus-list] Fwd: Ukraine Today -- 10.12.2001

[Robert De Lossa <radelo@earthlink.net>]

[from "Yaroslav Davydovsky" <sda@ukrainet.lviv.ua>]

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   UKRAINE TODAY
   Main weekly events from Infobank News Agency


   10 December 2001



   * FORMER INTERIOR MINISTER KRAVCHENKO BECOMES KHERSON OBLAST
     GOVERNOR
   * RUSSIA MAY GIVE UKRAINE US$ 500 MILLION LOAN TO FINISH CONSTRUCTION OF ITS
     TWO NUCLEAR POWER PLANTS, SAYS RUSSIAN PRIME MINISTER
   * DISCOUNT RATE TO DROP FROM 15% TO 12.5%
   * NBU CHANGES OBLIGATORY RESERVE RATIO FOR COMMERCIAL BANKS
   * UKRAINIAN PARLIAMENT FORWARDS DRAFT 2002 BUDGET FOR REPEATED SECOND
     READING
   * LAW ENFORCEMENT-ORDERED CHECKS OF BANKS BY NBU ARE ILLEGAL, COURT
     SAYS
   * UKRAINE, GERMANY SIGN AGREEMENT ON RESTRUCTURING UKRAINE'S DEBT TO PARIS
     CLUB
   * IHOR YUSHKO BECOMES STATE SECRETARY FOR FINANCE MINISTRY






   FORMER INTERIOR MINISTER KRAVCHENKO BECOMES KHERSON OBLAST
   GOVERNOR

   KYIV. President Kuchma named former Interior Minister Yury Kravchenko to
   head the Kherson Oblast state administration. Yu. Kravchenko will take
   over from Olexandr Verbytsky who has been recently appointed L. Kuchma's
   advisor.

   Yury Kravchenko has been Ukraine's interior minister since July 1995
   through March 2001. In August 2001, Kravchenko became director of the
   Volodymyr Velyky Institute of Law, a structure of the Interregional
   Academy for Personnel Management.


   RUSSIA MAY GIVE UKRAINE US$ 500 MILLION LOAN TO FINISH CONSTRUCTION OF ITS
   TWO NUCLEAR POWER PLANTS, SAYS RUSSIAN PRIME MINISTER

   MOSCOW. Russia is ready to give Ukraine a loan worth US$ 400-500 million
   for the latter to finish the construction of Rivne and Khmelnytskyi
   nuclear power plants; of this sum, nearly US$ 60 million may be given in
   2002, Mikhail Kasyanov, the Russian Prime Minister, told a news conference
   on December 4, after the sitting of the Ukrainian-Russian
   inter-governmental commission.

   According to Mr. Kasyanov, the loan may be given to cover Russia's
   participation in the completion of two power units at the nuclear plants.
   Russia will not demand that Ukraine pay for the services delivered
   immediately as it understands that these are investment projects that take
   time to pay their way, said the Russian Prime Minister.

   The Ukrainian Prime Minister, Anatoliy Kinakh, told the same news
   conference that in December Ukraine and Russia are expected to sign an
   agreement on the completion of the nuclear power plants in Rivne and
   Khelnytskyi and on the basis of this deal the two countries are expected
   to sign a credit agreement in the first quarter of 2002. Mr. Kinakh said
   he hoped it would be possible to start works at the power plants in the
   second quarter of the next year, reports the agency AK&M.

   As Infobank has reported earlier, following Ukraine's request,
   the Board of Governors of the European Bank for Reconstruction
   and Development postponed the release of a US$ 215 million loan
   earmarked for the completion of nuclear power plants in Rivne and
   Khmelnytskyi.

   According to the EBRD press service release, the Ukrainian party
   requested to have additional consultations on some controversial
   provisions on the loan agreement. Ukraine has made its request in
   the letter by Prime Minister Anatoly Kinakh analyzed by the EBRD
   Board on November 29 and the statement by Ukraine's
   representative in the EBRD Yury Poluneyev.

   On December 7, 2000, the EBRD took a decision to disburse a US$
   215 million loan to Ukraine. The decision was to have been
   finally signed by December 6, 2001. Given the document is not
   signed by this deadline, the terms of the loan are subject to
   revision.

   Earlier, President Kuchma said to journalists on November 19 in
   Moscow that the terms offered by the European Bank for
   Reconstruction and Development for its loan to complete two of
   Ukraine's power units at NPPs in Rivne and Khmelnytskyi are
   crushing for Ukraine.

   Kuchma, who is currently attending the CIS summit in Moscow, added that he
   intends to strike a deal with Russia on getting a loan to complete the
   nuclear plants. Such a loan will be equally beneficial to Russia, as
   Ukraine will buy the Russian equipment needed for completion projects,
   Kuchma argued.

   Earlier, EBRD President Jean Lemierre recommended to the EBRD Board of
   Governors to release a US$ 215 million loan to Ukraine to complete the
   NPPs in Rivne and Khmelnytskyi. The EBRD is ready to give the money,
   provided the Ukrainian government reforms the energy market and raises
   electricity tariffs.


   DISCOUNT RATE TO DROP FROM 15% TO 12.5%

   KYIV. On December 10, 2001 the National Bank of Ukraine will lower
   its discount rate from 15% to 12.5%. The NBU Board took this decision
   having analyzed the situation on the money-credit market, for-ua.com
   reports.

   This year the NBU has lowered its discount rate 5 times. On March 10, the
   rate was reduced from 27% to 25%, on April 7 - to 21%, on June 11 - to
   19%, on August 9 - to 17% and on September 10 - to 15% annual.

   Last year NBU reduced its discount rate four times - to 35% on
   February 1, to 32% on March 24, to 29% on April 10, and to 27% on
   August 15, 2000.


   NBU CHANGES OBLIGATORY RESERVE RATIO FOR COMMERCIAL BANKS

   KYIV. On December 10, 2001 the National Bank of Ukraine (NBU) is going to
   change the limits of obligatory reserve to be formed by commercial banks,
   reports korrespondent.net.

   Under the NBU regulation passed on December 4, if a bank has short-term
   foreign currency or hryvnia deposits placed by legal entities, its reserve
   ratio will be 12%; if deposits are made by natural entities, the hryvnia
   ratio will be 10% and foreign currency ratio 12%.

   For long-term deposits placed by legal entities, the hryvnia reserve ratio
   will be 8% and foreign currency ratio 10%. For long-term deposits by
   natural entities, the hryvnia ratio will be 6% and foreign currency ratio
   10%. If other resources are attracted, the reserve ratio will be 14%.

   From April 15 until now the reserve ratio for long-term hryvnia deposits
   placed by legal entities has been 11% and by natural entities 9%. For
   short-term foreign currency and hryvnia deposits placed by legal entities,
   the reserve ratio has been 14%; for short-term hryvnia deposits placed by
   natural entities the ratio has been 12% and for foreign currency deposits
   13%. If any other resources were attracted, the obligatory ratio has been
   15%.


   UKRAINIAN PARLIAMENT FORWARDS DRAFT 2002 BUDGET FOR REPEATED SECOND
   READING

   KYIV. On December 6, with only 211 votes in support, Verkhovna Rada
   rejected to pass its second reading of the draft 2002 budget, moving to
   have second reading debates later. The date for the second reading will
   be set later.

   As Infobank has reported earlier, on November 29, the Ukrainian parliament
   failed to approve in its second reading the draft 2002 budget. The motion
   submitted by the government and agreed earlier with representatives of 9
   parliament factions and groups was supported by a mere 176 lawmakers. The
   draft was rejected by the Communist Party, the Socialist Party, the Greens
   and the Batkivshchyna Party.

   An improved version of the draft state budget-2002 was submitted to the
   Supreme Council of Ukraine for a second reading on November 22. According
   to Viktor Medvedchuk, Parliament First Deputy Speaker, the government
   proposes that budget revenues next year stand at UAH 44.2 billion and
   expenditure at UAH 48.5 billion, with the budget deficit amounting to UAH
   4.3 billion. In the draft, the expenditure of the total fund of the
   budget has been increased by UAH 1.2 billion. "More than 50% of this sum
   (over UAH 600 million) will be used for solving social problems, including
   education and healthcare," said Ihor Mitiukov, the Finance Minister.
   Although some of the figures in the budget-2002 have been changed by the
   Cabinet, the budget deficit remains the same - UAH 4.3 billion (1.7% of
   the country's gross domestic product).

   Speaking at his December 5 press conference, Prime Minister Kinakh assured
   that the government and Verkhovna Rada found ways to increase the budget
   revenue by UAH 1.15 billion. According to Kinakh, this increase is
   directly linked with the parcel of bills submitted by the government to
   parliament and described as fast-track by President Kuchma.


   LAW ENFORCEMENT-ORDERED CHECKS OF BANKS BY NBU ARE ILLEGAL, COURT
   SAYS

   KYIV. Following an appeal by Verkhovna Rada Deputy and Pravexbank
   Honorary President Leonid Chernivetsky, the Obolon Rayon Court in Kyiv
   invalidated the regulation # 276 issued on July 17, 2001 by the National
   Bank of Ukraine and allowing the NBU to check commercial banks following
   demands by the Prosecutor General's Office, the Security Service of
   Ukraine, the Interior Ministry, the State Tax Administration, and the
   Presidential Anticorruption Committee, Pravexbank's press service reports.

   In its turn, the NBU said it will protest the court ruling and the
   corresponding appeal is ready. Unless appealed, the Obolon Court decision
   will come into force on December 13, 2001.


   UKRAINE, GERMANY SIGN AGREEMENT ON RESTRUCTURING UKRAINE'S DEBT TO PARIS
   CLUB

   KYIV. The governments of Ukraine and Germany have signed an agreement to
   restructure Ukraine's US$ 245 million debt to Germany. The signing had
   been preceded by Ukrainian German consultations chaired by President
   Kuchma and Federal Chancellor Gerhard Schroeder.

   According to the Korrespondent.net, both sides also signed a joint
   declaration on support for the training of Ukrainian managerial personnel
   in Germany and an agreement on cooperation between justice ministries of
   both countries.

   In September Ukraine resumed bilateral talks with member countries of the
   Paris Club of creditors to restructure her debt. The restructuring is
   expected to be complete by March 2002, in line with the earlier agreements
   reached with the Paris Club. In 2001, Ukraine must repay about US$ 160
   million and in 2002 US$ 200 million on credits received from the Paris
   Club countries.


   IHOR YUSHKO BECOMES STATE SECRETARY FOR FINANCE MINISTRY

   KYIV. On December 7, President Kuchma named Ihor Yushko to serve as state
   secretary for the Finance Ministry of Ukraine, For-ua.com reports, citing
   a well-informed source.

   Until recently I Yushko was first deputy of Verkhovna Rada's Committee for
   Finance and Banking. Before, he was governor of the First Ukrainian
   International Bank (Donetsk).




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