The Budget and Tax Codes will be further studied in order to take into account the financial interests of local communities, President Viktor Yanukovych said at the international municipal hearings 'Development of proper management at local and regional levels,' ForUm correspondent reports.

"It is necessary to provide proper functioning of local self-governments and communities, that is why we continue working on the Tax and Budget Codes," he said. Yanukovych also called representatives of the local self-governments to join the work.

Speaking about the administrative and territorial reform the President declared it is necessary to introduce the policy of community enlargement. "We have taken the first steps in this direction and worked out a draft bill on merging the territorial communities, but I underlined that there must be a principle of voluntary involvement," Yanukovych pointed out.

Speaking about the situation on local self-government in general, Yanukovych noted that people show passive position. "Though the Constitution confirms the high status of territorial comminutes, Ukraine still follows rather conservative post-Soviet version of local management. I mean that local communities potentially have rights, but have no possibilities to realize them," he said.

Yanukovych also demanded to reform relations between the central and regional governments. "European integration of Ukraine demands European model of regional policy. For the last 20 years the regional policy in Ukraine has followed the principle 'center - regions', which led to misbalance of regions' development, exhaustion of local and state resources. Now we need to build horizontal connection between the regions and local communities," the President summed up.

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