“I think that the obligations given by the Government to the IMF are unattractive for Ukraine and unjustified. First and foremost, the matter concerns limitation of the wage increase by inflation rate, i.e. “wage freezing”, as well as the conditions leading to suspension of crediting the economy”, the People's Deputy, the Party of Regions parliamentary faction member, Head of the VRU Committee on Finance and Banking, Finance Minister of the Opposition government Mykola Azarov.

“The government voluntarily agreed on the recipes that are the direct opposite of which should be applied”, he underlined.

“Why does Tymoshenko deny that the wage freezing will occur, and the Party of Regions asserts that it is the freezing and even real wage cuts? Because indexation of wages to a statistical inflation rate actually means a decrease of the real purchasing power of wages. Inflation is calculated on the basis of hundreds of price items, the majority of which may not change. A change in prices for food stuffs, essentials, housing and communal services is crucial for a person’s real life.

Food stuffs make up 60% of our consumption pattern. The inflation rate calculated on the average basis is less than inflation of food stuffs. Therefore, when it is said that we will adjust wages to inflation index, it actually means that the Tymoshenko government will cut wages”, the Party of Regions MP explained.

“If we adjust wages to inflation of food articles, for example, we would at least fix the purchasing power for essentials”, he underlined.

Thus, Mykola Azarov considers that the policy pursued by the Tymoshenko government as dictated by the International Monetary Fund will result in steep drop of the living standard, shrinking solvent internal demand, which in its turn will unable domestic producers to keep afloat by means of the home market. A vicious circle of poverty threatens Ukraine again, and this threat is triggered not by the global financial crisis, but by the thoughtless policy of this government.

People's Deputy of Ukraine Mykola Azarov’s Press Service