KIEV, Dec. 2 – Yulia Tymoshenko, Ukraine’s likely next prime minister, on Sunday defended one of her most controversial campaign promises: her call for payment of billions of hryvnias in debts on failed Soviet-era bank deposits.
Tymoshenko said the final figure to be paid out will be “substantially” less than the UAH120 billion ($24 billion) to UAH132 billion that had been reported by the government.
“It will be substantially less,” Tymoshenko said in an interview with Studio 1+1 television Sunday night. “We will announce the figure soon after re-registering depositors and re-counting the debts.”
The campaign promise was harshly criticized by liberal economists that believe it will be impossible to find the source of cash to pay the debts and that the quick and massive payments would spur rapid increase in consumer inflation, up to 40% annually.
But Tymoshenko said she was positive that the debts were overestimated, and could be steeply lowered, allowing the government to successfully pay out the money within two years.
“We will return the money in two years,” Tymohenko said. “If we do not return the debts, it means we will resign.”
The comments show that Tymoshenko is determined to go ahead with the controversial plan that some economists say is very dangerous and may lead to financial instability. The persistence to the plan may lower support for Tymoshenko when lawmakers get together for approving the next prime minister next week.
Among the potential sources of funding the payments, Tymoshenko mentioned “an honest privatization,” which indicates that she might try to sell state-owned assets to raise cash for the payments.
“We can pay the debts even within one year if the black privatization is stopped,” Tymoshenko said. (jp/ez)