First Vice Premier, Finance Minister Mykola Azarov met with IMF Senior Permanent Representative to Ukraine Jeffrey Franks. The parties discussed the draft 2007 national budget, Cabinet's press office reported.

The IMF official thanked Mykola Azarov for the Ukrainian Government's productive cooperation with the IMF.

As he noted, the IMF has prepared its conclusions about that bill, which contains both positive provisions and some questionable points.

Jeffrey Franks stated the budget bill's strengths as the document's investment directivity, the idea of a single social deduction and the Government's intention to refrain from charging currency exchange transactions, which eventually will benefit the monetary situation in Ukraine.

As he noted, IMF experts believe that the 2007 budget's deficit should be limited to 2 percent of Ukraine's GDP, though 2.5 percent could be acceptable.

In Jeffrey Franks's opinion, the Ukrainian Government's major challenge will be to resist the temptation to enlarge the budget's outlays.

In turn, Mykola Azarov stated the Government's task to make the 2007 national budget realistic and well-balanced. The 2007 budget provides for establishing the stabilization fund, which will minimize adverse effects of raises in the price for gas.

Touching on special (free) economic zones, Mykola Azarov stated the Cabinet's task as minimizing risks of budgetary means being used inadequately and/or inefficiently, in particular, through ensuring transparency of the special economic zones' performance.

Mykola Azarov noted, the Government is contemplating to carry out the tax, judicial reforms and to step up countering corruption.

Mykola Azarov also stated the Government as intent on preventing unscrupulous investors from enjoying undeserved franchises, particularly, if amounts of these exceed investment sums.

As Mykola Azarov stressed, Ukraine appreciates the IMF's drive for consolidating partnership relations with Ukraine and hopes that these will be further promoted and will be frank and sincere.


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