Brief by Danylo Lubkivsky, Advisor to the Prime Minister of Ukraine

March 17, 2015.

Kyiv, 17 March 2015

Ladies and gentlemen,

I am honored to present the results of the Government’s 100 days in the office.

First, it is a war cabinet. Its most important task was preserving our statehood and unity.

Second, the Government is comprised of determined professionals. The Parliament, the Government and the President are committed to changing the country.

I value dearly practical assistance, criticism and advice of volunteers who cooperate actively with the Cabinet and line ministries. I admire their dedication and talent.

Despite the war with the nuclear power and cynical opponent, Ukraine has achieved quite a lot.

Our clear roadmap is the Ukraine-EU Association Agreement. Having established a mechanism of implementation and introduced a wide range of executive programs, this Cabinet is committed to ensure our obligations in full and with no delay.

We implemented three austerity packages and introduced realistic budget of 2015.

The Cabinet has paid all pensions, welfare and salaries, despite lost business activity and industry.

The Government has accomplished the first stage of the fiscal reform. A general number of taxes were decreased from 22 to 11. Audits of small and medium businesses are banned. Aim of the Single Social Payment is to motivate employers to pay official salaries.

We started reducing the pension fund deficit. A fair system is introduced for the special pensions.

Luxury tax and tax on passive income, as well as increased payments for extracting natural resources will help us finance the state budget.

We countered corruption at macro level with no more intermediaries in energy supplies.

As a result of the first stage of the budget decentralization, regions received the right to administer series of taxes.

We cut the number of controlling agencies from 56 to 28.

New deregulation measures, introduced in Agriculture, Food, Oil & Gas and IT industries, will gain an estimated economic result of around USD 4 bln. till 2020.

Unprecedented defense budget that constitutes 5.2% of GDP ensures modernization of the Ukrainian Armed Forces. The Government will keep in full promises to defenders of our land and their families.

The Government allocated additional UAH 3 bln. for rehabilitation and other assistance (around USD 140 mln.) to temporarily replaced persons and participants of the antiterrorist operation.

I personally thank everyone who donated to the army, refugees from the east and Crimea.

Ensuring energy security was among the most pressing issues in winter. Today 70% of gas Ukraine buys in Europe not in Russia.

Energy efficiency programs and subsidies for people will contribute to eliminating the deficit of energy resources in the next season. In the summer Ukraine will stockpile in reservoirs enough gas for the winter.

Due to its professionalism and determination, the Cabinet succeeded in keeping foreign trust in Ukraine’s perspective.

The International Monetary Fund’s board approved an Extended Arrangement under the Extended Fund Facility of USD 17.5 bln. four-year aid program for Ukraine. The Fund acknowledged our results and further plans.

Ukraine’s partners abroad believe in the Government’s ability to bring the reforms to conclusion. This is an important sign to investors that the Government fulfills the obligations and the economy will eventually come out of a recession.

In general, the European Union, G7, leading states – among them the United States, have voiced strong support for Ukrainian reforms and the Government’s program.

These 100 days have been anything put simple or pleasant.

The first challenging winter for new Ukraine is over and the Government is eager to carry on. The tasks are piling on because for previous years they have been neglected by the previous regime.

The path ahead will not be easy.

If we are resilient and united we will come out of these challenges stronger.

Ladies and Gentlemen,

This Cabinet is a target.

We all, Ukrainians, are challenged by local corruption and inefficiency of weak post-Soviet state institutions. The Government believes that these diseases and legacies must be jointly treated by our society – our Churches, civil activists and public opinion leaders. Moral integrity must be protected by all.

The reform track is targeted by political ignorance and political reasoning. This Cabinet calls upon the Parliament to avoid any chance of populism or misbehavior aimed at benefits that are unacceptable at war.

The Cabinet is targeted by Ukrainian and Russian tycoons, since this is the very first Ukrainian Government to increase payments for extracting natural resources. The negative feedback was received immediately. The Cabinet calls upon our society not to be trapped or manipulated by this wave of unfair judgments.

The Yatsenyuk Cabinet is targeted by Putin. With the current financial crisis, Putin has come close to achieving his purpose of destabilizing Ukraine.

No illusions. Russia continues the offensive.

Since 15 February, Russian militants have shelled Ukrainian positions over 1000 times.

The Russian withdrawal is performed either partially or in a way to strengthen their assault capabilities.

Russia refuses to release illegally detained Ukrainian political prisoners – Nadia Savchenko, Oleg Sentsov, and others.

Russia blocks delivery of Ukrainian and international humanitarian aid.

Russia refuses to extend proper verification of the area, including the checkpoints along the border that is currently out of Ukraine’s control.

Russia has not retreated its regular troops as well as military equipment from Ukraine.

Russia remains its strategy unchanged. Putin does not seek territorial gains. He targets Ukraine’s future and aims at controlling Europe.

There is no other option but to raise the costs for Putin’s aggression.

First. It means to strengthen Ukraine’s defensive potential.

Second. It means to scale up the sanctions against Russia, targeting its financial sector.

Third. It means to preserve unity within the EU and between the US and the EU.

Fourth. It means to ensure economic stability in Ukraine.

By defending itself against Russian aggression, Ukraine is also protecting the European Union.

The collapse of Ukraine would open the door to Russian influence and even domination in Europe.

Europe’s political leaders must change their perspective.

If Ukraine fails to defend itself, they will have to spend much larger sums on their own defense.

The only way to prove Putin wrong is by engaging in a medium-term assistance program that is large enough to ensure stability in Ukraine and to encourage private capital to Ukraine.

Ukraine’s Government is determined to embark on further radical changes.

 Western unity and Ukraine’s resilience would turn the tables on Putin.

Such a perspective looks difficult but it is attainable by close cooperation between Ukraine and the international community.

Thank you.

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