In Ukraine, anger over fuel poverty is bringing people out into the streets

Representatives of the Free Trade Union of Entrepreneurs of Ukraine took an active part in these protests in Zaporizhzhya, Odesa and Kyiv: their income has fallen in connection with the pandemic and lockdown measures, while utility costs have increased, they say.

“Entrepreneurs go to the Czech Republic or Poland, register there and establish their business. Then they import their products to Ukraine, because it is cheaper to produce there than at home. We are killing our production, we are killing jobs,” said Valentyna Korobka, head of the union. “People are leaving the country and do not want to return.”

According to Ukraine’s trade unions, the government’s tariff policy in the energy and municipal sectors “does not balance the interests of the state, consumers and business”.

Through a joint trade union body, trade unions have demanded that the government return the regulation of gas and electricity prices, restore benefits for electricity for those who live near nuclear power plants. Trade unions are also demanding the repeal of a government decree that raises the ceiling on welfare subsidies for heating (from utilities costing 15% to 20% of total individual household income).

The Ukrainian government insists that subsidies – partial compensation by the state for the cost of utilities for the poor – reliably protect the latter from the rise in prices for utilities services. However, neither trade union representatives, nor citizens agree.

“If people do receive subsidies, they are still not enough for a normal life and for paying all the costs of utilities,” explained Tetiana Boiko, an expert with the OPORA civil network.

“Although the government’s subsidy policy is quite loyal, it is difficult to find a good job in small towns and villages because the unemployment rate is so high. In addition, due to the coronavirus, many citizens have reduced incomes,” Boiko said.

Freezing reforms

With the proliferation of local protests at the start of the year, more and more local authorities began contacting the government and parliament with demands to revise Ukraine’s tariff policy.

By early February, opinion poll ratings showed a significant drop in the popularity of the ruling Servant of the People party and personally president Volodymyr Zelenskyy. After all, citizens have not forgotten how Zelenskyy promised to halve people’s heating bills in 2019. Many opposition politicians began to talk about early parliamentary elections and called for the government to resign. Opinion polls suggest that two thirds of Ukrainians want parliamentary re-elections.

This situation was aggravated by the fact that just as the tariff crisis hit, prime minister Denys Shmyhal’s government was negotiating with an IMF delegation over resuming lending to support the state during the global pandemic. One of the conditions for granting loans was the continuation of market reforms in the energy sector, including free pricing for gas, electricity and other utilities.

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