President Leonid Kuchma has vetoed the law passed on November 19 by the parliament, which would increase the minimum monthly wage from 55 to 148 hryvnyas and the poverty-line monthly income from 74 to 119 hryvnyas (US$16 to US$34). Both changes would have taken effect retroactively as of October 1. In his veto message to parliament, Kuchma pointed out that implementation of this law would confront the country with the following set of options: (1) printing money in amounts which would result in a 250 percent to 300 percent annual rate of inflation next year, (2) raising taxes on the private sector to unacceptable levels and (3) mass layoffs in the public sector in order to save the funds needed to comply with the parliament’s law (STB TV (Kyiv), December 7; Ukrainian agencies, December 8; Eastern Economist Daily (Kyiv), December 9). Kuchma’s veto shows a readiness to assume some political risks as the presidential election campaign approaches.
UKRAINE PINS HOPE ON CASPIAN OIL VIA GEORGIA.