President has commented on the abolition of European trade preferences for Pridnestrovie from January 1, 2016


Yevgeny Shevchuk: “We understand that there are risks of losing some income, but we are not going to trade our sovereignty”

The Head of State held a meeting with the inhabitants of Tiraspol the previous day. During the meeting, a question was raised about the prospects for social and economic situation of pensionners and public sector employees, as well as they were interested in the forecasts for the first quarter of 2016.

The President noted that to forecast the dynamics of economic development, even for the short period, is virtually impossible due to the instability and uncertainty of the economic situation in the region.

In particular, Yevgeny Shevchuk drew attention to the potential of impact of external negative factors.

“Ukraine and Moldova agreed and assemble new customs posts from the Ukrainian side practically, place infrastructure facilities. What it will lead to, to what restrictions, how they will affect trade flows – it is exactly unknown. Although we ask for information, consult and conduct the negotiations”, - said the President.

At the same time the Head of State emphasized that the abolition of autonomous trade preferences for Pridnestrovian enterprises in trade with the EU is expected from January 1, 2016.

“There are very interesting requirements there. In the case of joining the Association we must allow Moldovan specialists of tax and customs services to our territory and, in fact, extend the application of the laws of Moldova on our territory,” - said Yevgeny Shevchuk.

However, as the President noted, the economic risks for Pridnestrovie related to the introduction of the new trade regime will not be a reason for yielding the independence, and the Government will look for opportunities to counter the possible destructive factors.

“We understand that there are risks of losing some income, but will we trade our sovereignty!?” - said Yevgeny Shevchuk.

 Describing the current socio-economic situation in the country, the President also drew attention to the disproportion between budget income and expenditure, which increases under the crisis. The President cited the data for 10 months of this year: “We have collected 2 billion 500 million tax revenues, and only paid salaries and pensions in the amount of 3 billion 100 million rubles. We have accumulated 600 million of income for pension provision, paid 1 billion 100 million rubles. When there is such a difference, sources of repayment of the budget deficit are sought out. Previously, the proceeds from privatization were those sources. Now there is no such income. We have not sold a single enterprise since 2012,” - said the President.

Compared with last year, as Yevgeny Shevchuk said, the companies reduced the tax payments: about 400 million rubles or 40 million dollars for 10 months of this year. “In addition, last year Ukraine revised the order of conducting foreign trade activities with economic agents of Pridnestrovie and virtually closed the border for movement of excise goods. We lost another 20 million dollars net income,”- stated Yevgeny Shevchuk.

Yevgeny Shevchuk reminded that the President and the Government have repeatedly submitted to the Supreme Council a number of legislative acts aimed at ensuring the accumulation of additional revenue, including the legislative initiative on the introduction of offshore duty, tax code which is required to review and redistribute income in the country. However, those draft laws were not adopted. For obtaining additional funds to provide social benefits the President took a decision to impose offshore duty by the decree. Besides, external loans were made, the press service of the Head of State informs.

Yevgeny Shevchuk paid attention to the fact that under the crisis many CIS countries employed available internal reserves, which Pridnestrovie does not have, and “they followed the way of exchange rate management, based on market conditions”. “We also had an option to pay salaries and pensions in full by the devaluation of the national currency. But we followed the unpopular decision – we cut costs and decided to support the currency. That decision, as time has shown, was true,” - stressed the President. He explained that otherwise the hyperinflation, price chaos would have been inevitable and at the present time the Government has no effective tools enshrined in legislation for regulating price formation.

Source: Novosti Pridnestrovya  News Agency