President Vetoes Ukrainian Budget, Dealing Blow To Government

KIEV, Ukraine -- Ukrainian President Viktor Yushchenko has vetoed the 2007 budget passed by parliament last week, dealing a blow to the government headed by his rival Viktor Yanukovych, the president's office said Tuesday.

Viktor Yushchenko

Yushchenko said the monthly minimum wage and inflation rate reflected in the proposed budget were too low and should be reconsidered.

It was the first time in its history that a Ukrainian president vetoed a budget drafted by the government and approved by parliament, reflecting the high tensions between the president and the prime minister.

After Yanukovych was accused of vote rigging in the tainted 2004 presidential election, protesters rose up in what became known as the "Orange Revolution." The country's Supreme Court overturned the election and ordered a new vote, which Yanukovych lost to his pro-Western rival, Yushchenko.

But in a strange twist, both now share power after Yanukovych won this spring's parliamentary election and was named prime minister.

Earlier this week, the country's parliament approved the 2007 budget, which envisions revenues of 147.89 billion hryvna ($29.09 billion) and expenses of 161.35 billion hryvna ($31.74 billion) - an approximately 18 percent increase over this year's budget.

The budget sets the monthly minimum wage at 380 hryvna ($75) as of January, less than the 406.60 hryvna ($80.50) that was recommended by economists to help people cope with inflation, according to a statement issued by the president's office.

Social service and welfare payments, including pensions, are calculated based on the monthly minimum wage.

Yushchenko also criticized the government for reducing the monthly minimum wage increase from 40 percent in 2005 to 12.5 percent in 2007.

Parliament needs 300 votes to override a presidential veto.

Yushchenko and Yanukovych have frequently clashed over foreign policy, Cabinet appointments and other government business.

Source: AP