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Reduced tariffs, subsidies, impending lockdown, and budget performance above target. The main thing from an interview with the Head of the Ministry of Finance Serhii Marchenko

Serhii Marchenko. Photo: UNIAN

Serhii Marchenko. Photo: UNIAN

Minister of Finance Serhii Marchenko explained that the electricity tariff reduction for Ukrainians is part of Ukraine's obligations under the stand by program with the IMF, if this does not pose risks to the budget.

Tariff reduction

The subject of tariffs is not within the purview of the Ministry of Finance. The department deals with the issues of budget balancing, and the reduction or increase of tariffs is the area of the Ministry of Energy and generating companies.

«Our program… does not focus on tariff escalation or reduction. These tariff stories are interesting from the point of view of fiscal risks,» the Minister said in an interview with Interfax-Ukraine.

Serhii Marchenko

Serhii Marchenko

Minister of Finance of Ukraine

Marchenko also indicated that there are no negative signals from the Fund.

"This is the business of those responsible in the Ministry of Energy, they communicate with the Fund. I think they discussed this decision with it. But there is no doubt that this solution must be fiscally balanced. We will not cover any tariff needs from the budget ".

Serhii Marchenko

Serhii Marchenko

Minister of Finance of Ukraine

As for the issue of "green" bonds of Ukrenergo, they can be issued only to pay off the debts of "green" generation for previous periods. At the same time, the Minister did not specify when such bonds would be issued.

The Ministry of Finance expects budget performance above target

By the end of 2021, the budget performance above target is expected in terms of the revenue side. At the same time, the parliament has already made amendments to the document several times.

«It (budget performance above target—The Page) will definitely happen. The question is that the parliament has already several times amended the budget for 2021 by 13 billion UAH and by almost 9 billion UAH.»

Serhii Marchenko

Serhii Marchenko

Minister of Finance of Ukraine

Marchenko added that these changes have been agreed with the Ministry.

"Due to the fact that we technically had an income performance above target and underperformance of borrowings, there were several government protocol decisions to reformat the list in order to finance expenditures that were expected to be financed through borrowings, at the expense of revenues. We have increased the list of income for these periods".

Serhii Marchenko

Serhii Marchenko

Minister of Finance of Ukraine

What will happen to subsidies

Funding subsidies for 2021 in October and November will also be adjusted, however, given the state budget performance above target in terms of revenues, this is not a problem. The Minister explained that subsidies are paid at the beginning of the month following the reporting month.

Thus, the December subsidies will be paid in January.

"We said: after the heating season we will analyze and draw conclusions. But the government is ready to allocate funds, this is not a problem. Given the  budget performance above target, I do not think it is a problem. There will be enough funds for subsidies for everyone who has the right to use them," Serhii Marchenko said.

Serhii Marchenko

Serhii Marchenko

Minister of Finance of Ukraine

What determines the imposition of a lockdown

The lockdown imposition depends on how densely the Ukrainian society is vaccinated. At the same time, the head of the Ministry of Finance stressed that at the moment there are no expectations of catastrophic consequences from the spread of new strains of COVID-19.

"The risks remain. These are low rates of vaccination. Now they are quite serious, but there should be an understanding in society that lockdowns depend on the consciousness of society in matters of vaccination," Marchenko noted.

Serhii Marchenko

Serhii Marchenko

Minister of Finance of Ukraine

According to him, the medical system is ready "for shocks and surges", but avoided a direct answer to the question of whether the draft budget for 2022 will include funds for vaccinations.

"We have already purchased so many vaccines, we should use them. It is about 40 million doses. It seems that the largest proportion among them belongs to Pfizer," the head of the Ministry of Finance specified.

Serhii Marchenko

Serhii Marchenko

Minister of Finance of Ukraine

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