Walking an economic tightrope – the price to Ukrainians for four months of unrest. But how much can the IMF loan and further payments pave the way to stability.
The proposed tariff increases could hit an estimated four million families deemed to be in the low-income sector. Experts believe the government must act.
“To make such an increase effective and justified the government needs to reform the subsidy system which could stipulate financial help for low income families which would help pay their energy bills,” said Volodymyr Omelchenko from the Razumkov Centre.
Opinions were divided among people in Kyiv with many ready to confront what will be required to prevent a potential financial meltdown while others want incremental increases in their bills.
“The government budget is always hitting our pockets. But for now we can’t do anything. Ukraine needs to find a way our of this situation,” opined one while another said: “Imagine how rising tariffs will hit people with minimal pensions and salaries? They could have done it at least in several steps.”
Ukraine’s parliament has voted in favour of an anti-crisis law accepting austerity measures demanded by the IMF as part of the bailout package.
The agreement came after deputies had failed to support the law but after a recess it was approved.
Euronews correspondent in Kyiv Angelina Kariakina said:
“Raising the gas tariffs which is planned for May could cause an increase in general prices which in turn may lead to discontent among many Ukrainians. The government has promised to create a system which will address subsidies which will in the first instance support low-income groups.”