Anders Åslund: European Central Bank could create a stabilization fund for Ukraine

International financial institutions, partner countries will support Ukraine, but it is not enough. For example, the European Central Bank could create its’ own stabilization fund in order to promote reforms in the country, said Anders Åslund, Senior Fellow of the Atlantic Council (USA) during the 8th Kyiv Security Forum organized by the Arseniy Yatsenyuk Open Ukraine Foundation.

“The European Central Bank could contribute; establish a stabilization fund that would promote stabilization of the situation. Then we will talk about the exchange rate and banking system stabilization,” – he said.

The expert is convinced that Ukraine needs new resources and the West should help. In his opinion, Ukraine needs, in addition to the promised funds, about extra $10 billion. pointed out that at the moment the economical burden of Ukraine is greater than in many other countries and governmental spending relative to GDP are one of the largest in the world. That is why they must undergo a significant reduction.

“Energy subsidies constitute 10% of GDP. It was the great achievement of this government to reduce these numbers to 2%. This reduces the flow of money directly into the pockets of oligarchs and improves the situation of the middle class,” – he said.

He considers it necessary to reduce pension expenditures as well. “During the presidency of Yanukovych retirement assets constituted 18% of GDP. In normal countries it is about 9%”.  

This reduction has to be carried out through the reduction and abolition of special pensions and reformation of the system of early retirement.

Speaking about the reforms in Ukraine, Mr. stressed on the need of radical reduction of officials “in highly corrupted institutions”. In particular, it concerns the ‘very sensitive’, ‘key’ sectors of economy and state-owned enterprises. In addition, he pointed to the positive experience of Eastern Germany when about 3 thousands of prosecutors were dismissed, and one third was recruited from Western Germany, and another one third was prepared specially for work in these bodies. Also, according to the A. Åslund, reformation of the Armed Forces of Ukraine according to the standards of the West is necessary in order to improve the efficiency of decision-making and implementation of them.

“Long elaboration of plans and strategies without acting won’t help in fighting corruption,” - said the senior fellow of the Atlantic Council. 

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The annual international event ‘Kyiv Security Forum’, established by the Arseniy Yatsenyuk Open Ukraine Foundation in 2007 is a platform for discussion of the most pressing issues concerning the security in Europe and the Black Sea region. The Forum is aimed at promoting security cooperation between the European Union and the Black Sea Region, raising awareness of the development of security among key players and strengthening the role of independent and non-governmental actors in solving security problems in Europe.