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Pensions in Ukraine to be halved - sequestration draft

Published time: March 06, 2014 12:38
Edited time: March 08, 2014 15:20
A participant in a rally in support of Ukraine's integration with the EU, on Kiev's Independence Square. (RIA Novosti/Iliya Pitalev)

A participant in a rally in support of Ukraine's integration with the EU, on Kiev's Independence Square. (RIA Novosti/Iliya Pitalev)

The self-proclaimed government in Kiev is reportedly planning to cut pensions by 50 percent as part of unprecedented austerity measures to save Ukraine from default. With an “empty treasury”, reduction of payments might take place in March.

According to the draft document obtained by Kommersant-Ukraine, social payments will be the first to be reduced.

“The Finance Ministry has prepared a plan for optimizing budget expenditures, which implies budget sequestration is to be in force before the end of March. For this purpose, in particular, it has been proposed to reduce capital costs, eliminate tax schemes and preferences and to cut social benefits, for example, 50 percent of pensions to working pensioners,” Kommersant-Ukraine reported.

Ukraine’s Ministry of Social Policy reported on December 1, 2013, that an average pension in Ukraine is $160.
Right after the formation, the self-proclaimed government in Kiev announced that the “treasury is empty”.

Ukraine’s new prime minister, Arseny Yatsenyuk, promised the government would do its best to avoid a default, adding that he expects an EU/IMF economic stabilization package soon. The plan has been formulated in record time, with the government’s strategy ratified in the Ukrainian parliament on February 27, and the document being sent for evaluation to the Ministry of Economic Development and Trade on March 3.

The European Commission offered Ukraine an 11 billion euro loan if Kiev agrees a deal with the IMF, European Commission President Jose Barroso announced on Wednesday. As a rule, help from financial organizations such as the IMF or the World Bank normally includes drastic austerity measures.

Accepting IMF money will mean many sacrifices for Ukraine’s economy, which are likely to include increased gas bills, frozen government salaries, and all around budget cuts.

The government in Kiev has already announced sequestration plans from $6.8 to $8.4 billion in 2014.

Comments (103)


DropTheBass 06.04.2014 10:15

I have a lot of sympathy for the average Ukrainian who just wants to live a safe and prosperous life. The ones who were sold an excellent story about how the Maidan protests were based on the noble principles of greater democracy, anti corruption and pro-EU freedoms. Well, my fluffy little friends, the sheep's clothing has dropped to the floor and standing before you is the devouring, insatiable wolf of international predatory capitalism. Watch as it tears the fabric of whatever society you have apart and I bid you a fond farewell as you collectively sink into the swamp of perpetual indebtedness to the money lenders.


Derek Maher 17.03.2014 21:15

A lot of these moves have already been implemented in Greece,Portugal,Cypr us,Ireland and Spain.
Just ask the average citizen of these countries on how much they are enjoying life.
Of course the Bond holders and Bankers were very well looked after and most of them got a nice fat bonus from the austerity drives imposed by the ECB and IMF.
Now Ukraine appears to be in another ball game when it comes to lack of money and debt.
People had better get used to eating grass and chewing on their leather belts for sustenance.
If they are old or sick better hope the end comes quickly and they don't suffer to much.


Christian S 17.03.2014 18:33

Jeez you people are so braindead... even the Putin Propaganda says "50 percent of pensions to WORKING pensioners" ie. People who already have another source of income

no wonder Russians are so easy to manipulate, it seems you can't even read your own Countries propaganda, the only saving grace of Russia is you have some hot women... at least until gravity and time ravage them... but #1 in their peak

View all comments (103)
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