On 12 October, the Verkhovna Rada convened for a plenary sitting. Contrary to established practice, government question time was held today, on Monday, rather than on Friday. The last government question time was postponed due to an international summit in Bukovel.
The previous sitting was held on 18 September. After that, MPs did not gather for votes.
During government question time, Finance Minister Serhii Marchenko spoke. He said that this year’s budget provided for spending of 4.5 trillion hryvnias, half of which was expected to come from partners.
“But these funds were not provided for nothing, they were tied to meeting commitments,” the minister reminded.
As things stand, the budget funding gap is €30bn, and the uncovered defence requirement is a further €40bn.
The government has faced “unprecedented challenges”, Marchenko added. Over the first eight months of the year, the economy recorded almost zero GDP growth. From January to September, the general fund of the budget fell 50bn hryvnias short of planned revenues, and by the end of the year the shortfall could reach 70bn hryvnyas.
Inflation is also accelerating. The cost of the war is rising: defence spending now stands at $155bn. As of August, there was a $27bn shortfall through to the end of the year.
“The reason for this is that partners did not ensure the provision of bilateral assistance. And we are now actively looking for solutions. At the same time, as a result of failing to meet the international commitments we undertook, we have already fallen $29.5bn short. We need to adjust this figure for the latest tranches. But even so, the volume of funds that must come in by the end of the year is extremely, extremely large. And this is now a matter of Ukraine’s survival, a matter of all of us understanding just how critical this is. We can—there are enough opportunities now—to make up the stated gap (a chasm. – Ed.)”, the finance minister said.
The government and the Rada now face the following tasks:
- taxation of parcels from marketplaces up to €150
- establishing a SEPA (euro) payments area
- selecting members of the Accounting Chamber
- resuming competitions for the civil service
- restoring provisions on PEPs (politically exposed persons)
Marchenko said there is currently a liquidity crisis. Only defence, pensions, salaries and social assistance are being funded. Spending has been prioritised.
After the minister’s speech and a few questions, the sitting was interrupted due to a yellow-level air-raid alert.