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(Mar 21, 2014)

On March 1, 2014, the Cabinet of Ministers of Ukraine adopted a resolution aimed at implementing urgent measures to save government funds and decrease future government spending. (Government Resolution No. 65 of March 1, 2014 on Saving State Funds and Prevention of Further Expenditures [in Ukrainian], Cabinet of Ministers website (click on Item 57).)

The resolution imposes a temporary freeze on placing new orders for the purchase of uniforms, vehicles (except emergency and rescue equipment), computers, cellular phones, furniture, and office equipment; eliminates food subsidies in cafeterias located in government buildings; and provides for a list of restrictions on current activities related to administering government affairs. (Id.) According to the Resolution, each government agency is allowed to use only one car and cannot request budget-paid charter flights. A hiring freeze was introduced for all vacancies, except for the positions of department heads. The Resolution bans agencies from establishing new services and departments within the agencies and from initiating new national programs. Government financing of conventions, fairs, conferences, and celebrations of historic events is prohibited. (Id.)

While the amount of regular salaries paid to government employees remains the same, bonuses, seniority payments, and payments for performance of work in place of temporarily absent employees are cancelled. Additionally, a cap on salaries of the executive-level officials has been introduced. The Resolution states that monthly salaries of the heads of agencies must not exceed an amount equal to fifteen times the minimum monthly wage. (Id.)

The structure of government institutions has also been amended. Cabinet Ministers can now have no more than four deputies and assistants. Heads of provincial and district administrations will have no more than three and two deputies respectively. The Government ordered a review of the inventory of state properties, including government residences and resorts, and proposals regarding their sale are to be drafted within one month. Programs aimed at saving utility fees must be implemented. (Id.) An addendum to the resolution lists 40 cancelled government regulations which might have potentially initiated the spending of government funds. (Id.)

These measures were required because of the dire financial situation in the country. As the newly appointed Prime Minister Arsenii Yatseniuk said, "after the change of power in Ukraine, the national treasury is empty, the country's debt is equal to US$130 billion, and all gold and currency reserves have been plundered." (Ukrainian Cabinet of Ministers Decided to Save [in Russian], NEWSRU.COM (Mar. 9, 2014).) In order to implement the Resolution, Yatseniuk took a regular, commercial flight and paid himself for all related expenses during his recent official visit to the United States. (Konstantin Zelfanov, Arsenii Yatseniuk Paid for His Ticket to Washington [in Russian], NOVYI REGION (Mar. 11, 2014).)

Author: Peter Roudik More by this author
Topic: Budget More on this topic
 Government More on this topic
Jurisdiction: Ukraine More about this jurisdiction

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Last updated: 03/21/2014