"My colleagues in the coalition and Government and I needed one month and a half after the presidential elections to fully consider the situation in the country and make first systematic decisions.
Today I am ready to provide a clear assessment of the situation in the country and report on the first qualitative results of our work.
After the presidential election we inherited a country in a terrible condition.
To quickly rescue it from the crisis, we must double our efforts.
These are not just good words, but the dynamics we need at all levels - from the President and Government to entrepreneurs and ordinary workers.
So, what kind of a country have we got? Political crisis lasted more than two years. Parliamentary coalition existed neither actually nor legally.
Government was subordinated neither to the Head of State nor to Parliament. Cabinet of Ministers served political ambitions of one faction and its leader. Not only Ukrainian citizens, but the world was tired of constant conflicts between Ukrainian authorities, of squabbling between the president and prime minister and of their uncoordinated actions.
Meanwhile, political pressure on economy was growing. Structural reforms have virtually stopped without having properly begun. All this has greatly deepened the crisis.
In 2009 the GDP dropped by 15% in Ukraine. This is significantly worse than in other former Soviet countries, including Russia and Belarus. Not to mention the neighbor - Poland, where there was no decline at all.
Industrial production fell by 22%. Construction has virtually stopped; its volumes have halved. Living standards have greatly fallen. Purchasing power almost halved comparing with living wage. The average Ukrainian wage fell to 240 dollars a month and is three times lower than in Russia. The construction of Euro 2012 objects was threatened by disruption. 50% of economy went into shadow.
Public finances have been driven to the disastrous state. The budget deficit reached hundreds of billions UAH. Budget base is destroyed; the tax burden has increased to the most in the last 10 years.
Public debt has tripled. This hasn’t happened in the history of Ukraine before. Government treasury account was almost empty.
Gold and foreign currency reserves of the country, estimated without the received IMF loans, decreased three times. Hryvnya has devaluated one and a half times during the year.
The government wasted billions from the Stabilization Fund and didn’t begin even a single infrastructure project. It is unclear where the funds Ukraine received under the Kyoto Protocol went.
The situation in finance and payment is a total decay. NJSC "Naftogaz of Ukraine" became a donor to the whole economy. As a result, the main energy company in Ukraine, main Ukrainian partner of "Gazprom" and operator responsible for the gas transport system of Ukraine, in fact, was brought into bankruptcy. How can we speak of any serious international gas agreements or protection of national interests in that situation?
Budget funds have been plundered under cynical slogans of social protection. Any given executive body revealed terrible theft and abuse. According to the Main Control and Revision Office of Ukraine, the losses reached tens of billions UAH.
The previous government promised to reduce Ukraine's dependence on imported energy resources. As the saying goes, everyone wanted the better, but it turned out the way they always get: Tymoshenko has clinched the worst possible gas deal with Russia. As a result Ukraine got the most expensive gas. And it actually killed our economy.
I want to tell the whole country that the gas price is the price our citizens pay for utilities services, it is an issue of survival for our industry, filling the budget, timely payment of pensions, jobs and wages. Finally, it is the issue of country’s survival.
Having the most expensive gas in Europe because of Tymoshenko’s government, Ukrainian goods had no chance at global markets. Thus, plants aren’t working, unemployment is rising, the budget is not being filled, pensions and wages are not rising. Instead, the prices for everything you need for life are constantly increasing.
That is why in order to rescue the country from the crisis we needed to reduce the gas price. The logic is quite simple: if the price for energy resources is reduced, competitiveness of Ukrainian goods at global markets will increase, industry will begin to work at full power, new jobs will be created, businesses will start paying taxes to the budget, and we will be able to finally begin fulfilling our social projects, raising pensions and wages.
The negotiations were very difficult. Gas price calculation, negotiated by previous government, satisfied only Russia, but not us. The Russians defended their own national interests. And I can understand their position. But I cannot understand what interests Tymoshenko defended when she concluded such an agreement.
We could not give away our gas transportation system. It was necessary to seek other ways. And we found the formula. We agreed to prolong the lease of our base in Crimea to Russia's Black Sea fleet in exchange for lower gas prices.
Thus, in next ten years Ukraine will get $40 billion. The money will start coming from this April. And during the ten-year period we will have $4 billion yearly. I emphasize once again that Ukraine saved $4 billion yearly that now will be an investment in our economy. It will provide conditions to revitalize our chemical, metallurgical and machine-building industry. It will also allow to keep the utility services tariffs as they are, which is especially important for me.
Today I look confidently to the future. Ukraine will be strong, independent and prosperous. In economics we have laid solid foundation for fighting the crisis and providing sustainable growth. In politics we have already overcome the crisis and created an effective, capable power. President, parliamentary coalition and Government work as a single mechanism without any conflicts or disputes.
Executive branch has almost been formed. We restored the trust and partnership with both Western and Eastern countries. Ukraine returned to the policy of peace, good neighborliness and national pragmatism.
To ensure effective implementation of the new course I established the Committee on Economic Reforms that is now completing elaboration of appropriate reforms program. The Working Group on judicial reform has almost prepared basic documents. The National Anti-Corruption Committee has begun its work, the results of which every citizen, entrepreneur and investor will feel soon. The newly established Public Humanitarian Council will be introduced next week.
We offer the country a new course, based on political dialogue, social peace, new humanitarian policy, economic reforms and neutrality.
I am deeply convinced that people will support this way because it’s aimed at solving the main task, which is to improve living standards for all Ukrainians. In our society there are high expectations for positive changes. I understand it very well. We will introduce these changes without shocks and losses.
I’m ready to answer any particular questions related to the situation in the country and our plans for the future."