OREANDA-NEWS. June 15, 2010. Prime Minister of Ukraine Mykola Azarov was interviewed by Reuters news agency.

The Head of the Government stressed that within three months that the new Cabinet is in office, it has managed to impose order in public administration and finances that is already producing positive results in the economy.

In particular, we have stabilized the balance of payments, international reserves increased by USD2 billion, industrial production growth began.

The real budget deficit is much lower than foreseen: within the last 5 months it is 1.4% of GDP.

For the first time within many months Naftogaz of Ukraine "uses its own funds to pay off Russian Gazprom without attracting funds of the state budget".

"The balance of payments of Ukraine has already been stabilized, for the first time ever it became positive - this is very nice – it is the result of the great work of the President and Government", the Prime Minister stressed.
 
Asked for the Government’s measures to stabilize the financial standing of Naftogaz, Mykola Azarov stressed that the Government worked out a series of measures that would enable the company to operate without loss and to pay taxes to the budget, have funds for development, firstly, for modernization of Ukraine’s gas transportation system. The PM stressed that this would be done not at the cost of tariffs increase for citizens. Instead of this, the Government will strive for payment discipline of consumers.

"Positive trend for Naftogaz - from deficit of UAH 45 billion, that we succeeded, to 10 billion-deficit at the end of this year - gives us the right to expect that next year will be profitable. This means that the financial plan of Naftogaz for the next year will include profit which will be sent to investment activity and to pay taxes".

According to the Prime Minister’s belief, the state debt of Ukraine is now at a safe level, although the former government inflated it from 10% to 32% of GDP. "I do not understand the policy pursued by the previous governments. How can involve short-term loans for six-nine months at 30%? This is complete dependence on borrowings and mindlessness as well as forcing companies to expensive loans because which company can borrow more cheaply than the Government? We will enter the market of borrowings only when we will have favourable situation and attract funds solely for a long-term period and on favourable terms for us", he said.

Mykola Azarov informed that the Government’s task consists in reaching the level of pre-crisis GDP within two years. "We must do everything possible to reach the level of pre-crisis GDP not within three but maximum two years, thus, annual growth of 4.8% I consider inadequate", the Head of the Government emphasized.

The Cabinet of Ministers intends to intensify efforts to increase purchasing power of citizens that is a trigger mechanism for recovery of domestic production. "The population began to invest more money in our banks. This, on the one hand, says that confidence returns to banks, but on the other, that people still remember about the crisis and are afraid to spend money that they have", said Mykola Azarov, stressing that "black days" are in the past.

The Prime Minister also assured reporters that the Government and the National Bank of Ukraine will use best efforts the hryvnya rate to remain stable. "I do not accept such a policy: sharp currency appreciation or depreciation. We negotiated with the National Bank when approved the budget, options of the exchange rate corridor and currency rate is within the limits", he said.