UKRAINE-SECURITY-FINANCES-STRATEGY

Kyiv, August 17 (Interfax-Ukraine) – A reduction in the state budget deficit, a drop in the withdrawal of capital abroad, the development of the domestic capital market, the improvement of approaches to assessing the credit risk of banks, as well as other measures, will help improve Ukraine’s security in the financial sector.

Such conclusions are reflected in a strategy for ensuring national security in the financial sector, which is included in government resolution No. 569-r of August 15, 2012.

“The fulfillment of these tasks will help ensure the observance of the figures of an economic reform program regarding an annual reduction in the state budget deficit and bringing its level to 0.8% of GDP in 2013 and to about 1% in 2014 [from 1.7% in 2012],” reads the document, which has been posted on the Web site of the Cabinet of Ministers.

According to the strategy, in order to achieve the said goals, it is necessary, in particular, to stop providing state support to public monopolies, both through the allocation of funds directly from the budget and by keeping prices for their products at an economically unjustified level and providing other benefits.

In addition, the strategy notes the expediency to ensure the compliance of fiscal policy objectives with the financial capabilities of the state, strengthen control over the use of budgetary funds and complete pension reform to guarantee a deficit-free budget of the Pension Fund.

In the sphere of corporate debt management, according to the document, state policy, among other things, should be aimed at reducing dependence on external financial markets and short-term borrowings and developing mechanisms and instruments contributing to the transfer of domestic capital on the development of the real economy.

In order to prevent the withdrawal of capital abroad and a reduction in the amount of revenues not received by the state in the form of in taxes and fees, it is proposed, in particular, to conduct an analysis of economic cooperation between Ukrainian residents and entities registered in offshore zones. In addition, it is planned to make an inventory of international agreements on the avoidance of double taxation that do not meet the modern standards of the Organization for Economic Cooperation and Development and to adjust such agreements in terms of expanding the requirements for exchange of information.

[UA EUROPE EEU EMRG FIN]

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15:39:07 EET-2