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EBA Meeting with the Prime Minister of Ukraine

03/ 04/ 2020

On April 2, the European Business Association  invited its member companies to attend a special live meeting with Denys Shmyhal, Prime Minister of Ukraine.

Current lockdown measures across the country, reorganization of businesses and government agencies’ work, support programs and packages to back the business during and after the crisis were the key points of the discussion with Mr. Shmyhal.

On coronavirus counteractions

The CMU is about to set up a stabilization fund to finance coronavirus countermeasures in Ukraine (UAH 97 billion). The fund will be filled up from the state budget. To do so, the MPs should support necessary changes to allocate funding. However, the financing of such areas as infrastructure, roads in particular, will remain unchanged. The Fund is expected to provide targeted assistance.

On the duration of quarantine

In light of the continuing spread of the coronavirus, the Government will step up measures to curb the spread of the virus during the Easter and May holidays. In May, the country should begin a gradual and segmented process of easing restrictions. People of working age will be able to return to work with the social distance and the necessary protective measures. To protect the at-risk population, for example, the elderly, children, certain restrictions on movement, and social distancing will remain. Public transportation and mass events will also remain under the question. 

In the context of the nationwide lockdown, the PM mentioned that default is unacceptable.

Besides, we can’t allow our economy to be “closed down.”

On loans, taxation and business support

The Government is currently negotiating with banks and the NBU to cut the discount rate and ease the credit burden on businesses. 

There is no plan to reduce the tax base or interest free lending, but partial interest compensation is under consideration. At the same time, no increase of the tax burden on legal entities is planned. The 5-7-9% loans previously introduced for small companies can be extended to all.

Companies outlined their proposals to help businesses cope with this crisis, for example, to extend the moratorium on audits after the quarantine, etc.

On doing business

The Executive Director of the European Business Association, Anna Derevyanko, delivered various business issues to the Prime Minister during the meeting. Also, all the questions and proposals of the Association’s member companies were transferred to the Prime Minister’s office for further processing.

It is crucial to contain the outbreak and mitigate the resulting economic damage by ensuring smooth trade and effective work of supply chains. The Government does not plan any restrictions for business in addition to those already implemented, so the trade turnover should be maintained at the current level.

The business also enquired whether a list of essential enterprises would be created. It was stated that the opposite would be the case, and non-essential infrastructure would be listed.

The business emphasized the need to establish a simplified and unified procedure for coordinating traffic routes for the transportation of employees. According to the companies, at a regional level, there are cases of denials of route coordination because the company is not on  the list of essential infrastructure objects. To determine the list of essential infrastructure enterprises, Mr. Schmyhal suggested focusing on economically active enterprises now.

During the lockdown, all state administrative services are virtually frozen, although most of them, both permissive and licensing, can be provided online. Therefore, the business urged for legislative changes that will allow government agencies to digitize these services in order not to hinder companies’ economic activity.

Besides, certain issues of the energy markets were raised. Thus, the business considers it necessary to ensure the uninterrupted operation of fuel and energy enterprises and their contractors during an emergency, to resolve the situation with renewables producers, and to appoint the Minister of Energy and Environmental Protection as soon as possible to lead the important sector of the country’s economy. The PM expressed hope that within two weeks, the Ministry’s team would be full.

Moreover, it is vital to provide the possibility of scheduled medical examinations, in particular, when hiring to food companies; to ensure the smooth functioning of the market of medicines and medical equipment; to regulate the establishment of restrictions by the local authorities on allowed/prohibited to sell goods in the context of CMU Resolution №211. Also, it is crucial to ensure the smooth operation of checkpoints and cargo checkpoints (rail, ports) to prevent disruption of the trade and supply chains, etc.

We also managed to discuss many other important business issues, such as organization of remote work, events and entertainment industry, mortgage lending, rail transportation tariffs, rent, and more.

Mr. Schmyhal emphasized that all proposals currently received by the Government will be elaborated by a specially created Economic and Strategic Council at the CMU. The European Business Association is eager to join the work of the Council to counter the coronavirus outbreak in a bid to alleviate its human and economic implications.

We are thankful to the Prime Minister of Ukraine for his professional dialogue and attention to business issues. We hope that such meetings will be held regularly as it is vital both for business and Government to be in synergy during these challenging times.

 

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