The financial collapse by the Treasury

Vladyslava Runa for Staryj Zamok  24 October 2012 21:22  33123173 023712
The financial collapse by the Treasury

Recently, several heads of municipal councils from different parts of Ukraine have complained that the regional government treasury offices block accounts of local governments. Paradoxical situation: city councils have the money, but they can not dispose of it, pay contractors and provide adequate funding.

As the "Zamok" already wrote, one of the first to draw the attention of the public and authorities to this problem was the mayor of Mukachevo. Last week Zoltan Lendyel even sent a telegram to the Prime Minister Mykola Azarov with a request to promptly intervene. In the appeal the mayor of Mukachevo noted that the Executive Committee of Mukachevo City Council is unable to perform its obligations to finance expenditures of the city budget. As of October 10, 2012 the State Treasury blocked the city budget funds in the amount of UAH 511,000. The telegram says, that it jeopardizes the maintenance of public sector institutions, housing and utilities, social infrastructure, repair of schools, pre-schools, roads, and can lead to the disruption of the heating season.

On Tuesday, October 17, Zoltan Zoltanovych in his comments to the "Zamok" noted that during this time the situation has not got off the place - there is still no money on the accounts.

And our fellow Victor Baloha on his page on Facebook said that almost all accounts of Transcarpathian region were blocked. "State Treasury does not carry out any payments other than salaries. Such delays in the region amount to ​​more than 150 million" - the politician wrote.

Unfortunately, the head of the State Treasury of Ukraine in the region Ivan Scholya has not found time to comment on the situation to the journalist of the "Zamok." 

Overall, the Treasury has been working in that perpetual "blocking" mode at least scince July. 

October 11 in Kryvy Rih at the meeting with representatives of the Dnipropetrovsk regional association of local authorities Mykola Azarov said: "We had problems with financing by the Treasury because on October 7 Ukraine paid Russia a billion dollars for gas. We slowed down the funding and yesterday the process was resumed", - Mykola Azarov said. Also, he said, the government has to adjust allocations because the proceeds to the Pension Fund do not coincide with pensions. According to the prime minister, the state budget makes substantial transfers to the Pension Fund.

It is worth mentioning, that recently Azarov was earnestly persuading a worker of a Zaporozhzhya plant that the latter earned 3.5 thousand, and not miserable one thousand and a half. Azarov is almost like the capricious princess from the famous fairy tale: I am telling that the grass is green so what that it is winter? Or, to paraphrase: I am telling that there is no problem, I know better.

Analysts point out that the main reason why the Cabinet withdraws the money from local budgets is the need to support the announced policy of raising social standards despite the fact that the economy is actually not growing.

Experts have warned already in the summer: if the situation is not taken under control, in October the problems wiould arise again. In particular, the Director of the department of the Institute for Budgetary and Socio-Economic Research Artem Rudyk said that the fulfillment of the budget this year is problematic, despite the traditional reports of the government about the over-fulfilled plans: "April and July are the last month before the quarterly payment of income tax, which is in May and August. So, the next problem with financing in the state may arise in October."

In September, industrial production decreased by 7% (compared to September last year), there were enormous costs of Euro '2012, repayment of huge amounts of the foreign debt, settlements for the expensive Russian gas, and the election is approaching. To presuade the electorate every day that the life is getting better today (they are after all professionals) is a very expensive activity.Given the current overall economic situation in the country the government has only one option: to take money from local authorities. As a consequence, it is the authorities at the local level that will be "scape goats" in the eyes of ordinary Ukrainians. Because if, for example, the road repair in a city is suspended due to the inability to pay bills, the people will accuse a mayor, not the Treasury or the government. 

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