Budget debates are often dry affairs, but not so in Kiev. By the end of this month, the Ukrainian parliament (Verkhovna Rada) must decide on a budget that will have profound effects on the future course of the government. The Ministry of Finance has proposed a budget that sets most tax rates at 20 percent, while closing loopholes and holding the deficit to an estimated 3.7 percent of GDP. The International Monetary Fund (IMF) has endorsed the plan, and the passage of the bill, or something close to it, is essential to completing the IMF review and keeping the government’s adjustment program on track.
The Greek parliament last night passed the first package of measures required by the government’s agreement with European governments reached over the weekend, winning 229 of 300 votes in the parliament. There were a large number of Syriza defections (39) that would appear at minimum to require a cabinet reshuffling. Some local analysts predict the government could fall, though most expect that if that happened Prime Minister Tsipras would reemerge as prime minister in a new coalition government.