20 October 2008, 10:15
Arseniy Yatseniuk: "We gave Economic Stability for Political Fireworks".
Arseniy Yatseniuk, Chairman of The Verkhovna Rada of Ukraine, dwelled both upon coming early elections, and his participation in it. Moreover, as a former banker and official of the National Bank, who had to take anti-recessionary financial measures in the period of Orange Revolution, he appraised the actions of the National Bank of Ukraine under the conditions of crisis.
http://www.eizvestia.com/state/full/41379
Question: The President´s Decree on assignment of early elections is still in dispute in courts. Will the elections be held within the time limit?
Answer: Frustration of calendar terms can serve as a ground for declaring the elections invalid. Therefore, there exists such a hypothetical probability. In theory, the date of elections can be postponed, though in practice, the election can not be cancelled. Though I resolutely oppose to the early elections, the political crises can not be settled otherwise.
Q: Will the alignment of political forces in The Verkhovna Rada change after the elections?
A: Insignificantly. The disparity between the coalition and the opposition will make four-five votes.
Q: Will the regular plenary meetings of The Verkhovna Rada be held?
A: A great discussion on the said issue is in progress. However, there is a legislative lacuna, therefore I appealed to the Constitutional Court, so that we could have a clear-cut interpretation.
I met the members of the Central Election Commission, and now I am convinced that the elections can be held without introduction of amendments to the law. Explanations of the Central Election Commission can regulate everything.
Q: In the beginning of 2008 you set up a working group in charge of elaboration of an electoral code. Has it concluded its work?
A: Yes, there is an electoral code. However, it has not been endorsed by all political forces. It is evident that elections with open lists are to be held.
Q: Recently you have declared your intention to form a personal political project. Now, there remains little time for its establishment and promotion. Do you still continue the work upon it?
A: Yes, there will be a political party. This difficult process is already in progress. It is possible to take part in coming elections: to find the sponsors, establish the Bloc of Yatseniuk and obtain these three per cent. But what´s the point? To enter the parliament with 25 deputies and million commitments, so that people could see no difference from the others? And I will have no time to participate in the elections on my own.
If there were a bloc of democratic forces, it would be possible to join it.
Q: Who is invited into your new party?
A: This will be a team of experienced people of different generations. The ideology should be based on several principles. First of all, it is democracy in politics, no single center of influence. The same concerns economy: equal rights for everybody and no monopoly.
В: What is your general impression of the economic situation?
О: Impression is definitely painful. In 2004 there was no global financial crisis, only domestic political crisis and a credibility gap. At present, domestic problems are combined with issues related to the global financial crisis. I fail to understand the results of measures taken by the authorities of the USA and European countries. I do not suppose that the financial market of Ukraine has reached its bottom.
В: How do the financiers non-bankers perceive the current situation?
О: Insurance companies are in a difficult situation, free float at the stock market is very limited. Out of 300 million UAH of tenders at the stock exchange PFTS only one million is due to shares. The markets came to a standstill.
В: Was it reasonable to adopt an anti-recessionary resolution similar to the one adopted in 2004 (576) under current conditions?
О: The National Bank did right. Remember Year 2004: destroyed cash machines, queues in the banks, beaten managers of regional branches and local offices of the banks. This time, the National Bank of Ukraine took preventive measures.
However, there are certain drawbacks lack of information campaign, where the State leaders and directors of commercial banks could deliver their speeches. At present, the points are being changed. The authorities claim that the National Security and Defence Council of Ukraine is responsible for the financial crisis, the National Bank for monetary crisis, "Ukrspetsexport" for delivery of weapon, the Parliament for legislation, somebody else for the flood. Then what are the responsibilities of the authorities?
В: Are you satisfied with the measures envisaged by a new anti-recessionary resolution?
О: Banking system is in need of a liquidity resource — stabilizing loans offered by the National Bank of Ukraine. The banks should have an access to refinancing. However, situations of 2004 and 2008 years are totally different. In 2004 all the banks experienced difficulties. At present, only a certain category has problems. Nevertheless, all of them are regarded as equal.
Let us consider the situation. Liquidity is concentrated in a dozen of banks. However, they can not live on this money, as they lose profitability. Therefore, it is necessary to diversify the credit limit depending on the bank.
As far as cash is concerned, this is a right, though slightly premature measure. Do you remember what happened in 2004 when a "corridor" was imposed?
В: A shadow market has immediately emerged.
О: Yes. However, we imposed a "corridor", exercising cash currency interventions. There was an agreement here you have dollars, here is the three-per-cent margin go and sell. It was not done in a present situation.
Therefore, it is totally impossible to take the measures envisaged byt eh Resolution, i.e. to exercise currency interventions depending on the purpose of currency purchase,— for the so-called critical import. This will destroy integrity of a currency market. The National Bank is not obliged to define the critical import. If one has a need in currency one should maintain the exchange rate.
It is another thing, that the washhouses and stop the withdrawal of capital. All this is made like in the year 2004. But there are no reasons to transfer the currency market into the manual mode yet.
Third thing is that it was done wrong when the rate of exchange in spring was pulled down to 4,65 grn/ $, and the interbanks decreased to 4,55grn./$. There was the discussion of the meeting of the National Bank I argued that the rate of exchange will be 5,12 grn./$.
The National Bank must have increased the rate till 4,8grn./$ and buy everything that goes. I stated: commensurate the state of the external account year ago and now and make the prognosis for the next year.
You will not stop the inflation by the revaluation. Even in the developed economies exists six-month-long lag between the application of the monetary methods of inflation restraint and inflation result. The export now decreases due not to the inner but the world conjuncture. But on the other hand we have stimulated the import.
Q: And what might have been without the resolution №319?
A: It would have been very hard, I think there might have been the total crisis there is no sense of precipice. But I have the sense of the world crisis, and its repulse on the Ukrainian Economy. One can hardly find the country in the world that so much depends on the outside world. 60% of Gross Domestic Product is due to the export.
The negative consequences are not only due to the recession. It is the third year we live in the country with the highest rate of the populism. We have 40% increase in social and budget payments. And one might thought that it will last forever until the rate of the inflation is 30%. When someone stated that the inflation in Ukraine is caused by the world process I was the first to answer: yes. But their contribution to the total inflation comprises approximately 5%.
Q: next year the year of the one more elections
A: It will be hard for everyone I do not believe that in half a year the world will face the before-crisis-results. I think that we will stay in the difficult situation until the new administration in USA bestirs. The stabilization will take 12 months.
Q: And what should be done with the increasing expenses on the social needs?
A: The Government again proposes that it should be raised on 34%. If it is adopted in the Budget for the year 2009 it will finally undermine everything in this country.
Q: What can appear on the bond of the resolution №319 and the conduction of the new elections in the Parliament.
A: This election campaign will be cheaper at least for 30% than that of year 2007. For everyone.
Q: How do you think, will Prominvestbank stop its existence?
A: On the meeting of The Security and Defence Council of Ukraine I will insist upon the nationalization of Prominvestbank. It is possible is Oshchad Bank buys assets and liabilities of Prominvestbank. Then the depositors will be under the guarantees of the state.
If we nationalize Prominvestbank, we will capitalize Oshchad Bank rapidly. If we do not make it, personally I give PIB two weeks. And if it stop its existence, everyone will suffer. Assets here - $5 mlrd.
Q: Sell to the private investor is it a way out?
A: Yes but no one will buy it so rapidly today.
The conversation was held by Aleksey PEDOSENKO, Sergey LIAMETS
20.10.2008 № 187(950)