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24 February, 2012  ▪  Andriy Kovalenko

Offsetting Populism

The Constitutional Court is bringing social policy out of the legislative field to be manually managed by the government. This signals preparations for the election

On 25 January 2012, the Constitutional Court of Ukraine took yet another step to taking social policy out of the legislative field to manual administration. From now on, the Cabinet of Ministers can ignore any social commitments of the state provided for by law simply on the grounds that drafting or amending public spending is not reasible. It appears that the current government is preparing to avoid responsibility for the failed populist promises of previous years and is once more developing grounds for their large-scale application in the upcoming election.  


The prehistory of this outrageous ruling is as follows. The Pension Fund, represented by its administration, applied to the Constitutional Court to interpret some provisions of the law and answer the following questions: 1) is the government authorized to establish the components and the amount of available social benefits based on its socio-economic capabilities; 2) can the government change the procedure and the amount of existing social benefits and support funded by the State Budget of Ukraine, and 3) are regulations concerning social protection of Ukrainian citizens issued by the Cabinet of Ministers to meet the requirements of the Budget Code of Ukraine, the law on the State Budget for the respective year and other documents mandatory for the courts of Ukraine?  

In answer to these questions, the Constitutional Court ruled that “meeting general social needs in terms of social protection at the expense of the State Budget of Ukraine, based on the state’s financial capabilities is one of the elements of Ukraine as a social state.” However, it failed to explain how this conclusion meets Art. 22 of the Constitution whereby “existing rights and freedoms shall not be restricted by new laws and amendments to effective laws”. This provision is imperative and has no references to “the state’s financial capabilities”. Whosoever believes it to be incompliant with reality, should initiate an amendment of the Constitution, duly justifying their position rather than just pretend that it doesn’t exist.

Ignoring the provisions of the Constitution to please the current government has lately turned into a common practice in the Constitutional Court of Ukraine. On December 26, 2011, it deemed the norms of the 2011 State Budget Law’s Transitional Provisions to be anti-constitutional. Under Chapter VII.4 of the Transitional Provisions of the Law on the 2011 State Budget of Ukraine, articles of some “social laws” were applied under the procedure and in amounts determined by the Cabinet of Ministers, based on the available financial resources of the Pension Fund’s 2011 budget.


The Constitutional Court has essentially authorized the executive branch to determine which part of social legislation should be complied with or not, at one time or another. This means that the principle of the division of power has been violated. According to its constitutional status,the Cabinet of Ministers does not have any legislative functions, while the Constitutional Court essentially requires the enforcement of the Cabinet’s regulations alongside the laws of Ukraine when dealing with issues related to the social protection of citizens.

This sets up a precedent whereby the government can ignore any social acts passed by parliament and adds another brick to the wall crushing the Ukrainian parliamentary system, turning the Verkhovna Rada into a mere “talkfest”. From now on, the Cabinet of Ministers will only comply with decisions passed by the “only legislative authority”, as the parliament is referred to in the Constitution, if it considers them to be expedient, justifying the opportunities and priorities of public spending, based on its own impressions. Given the mechanisms to pass state budgets through parliament used over the past three years, that have gone so far as to cause even members of the Party of Regions to complain in public, it is clear that a trend is emerging whereby the role of the Verkhovna Rada is being reduced to that of an advisory entity under the Cabinet of Ministers whose functions will be restricted to periodically okaying decisions made in advance by the Cabinet, while the latter will selectively implement the laws passed by parliament.  


At first glance, the reason for passing what are in essence anti-constitutional decisions is incomprehensible, since all authorities are already controlled by the Presidential Administration, which could introduce necessary changes according to legislative procedures. The pro-government majority in parliament would introduce them into the state budget law (parliament has actively been using this mechanisms in recent years) thereby terminating “social” acts for the current year. That’s the end of it! Still the game that involves the Constitutional Court has an underlying political motivation. The president’s team is obviously aware that some unpopular decisions to cut social spending in view of the budget deficit are inevitable. If a law is passed to decrease social guarantees for the public, the Party of Regions faction in parliament, along with its satellite parties, will be held responsible. Moreover, it has to be signed by the president, thereby taking on the burden of unpopular decisions, as all anti-social acts are. On the eve of the parliamentary election, this would be a risky step.
Signals have recently emerged of the government’s intentions to repeat the 2004 practice, when Mr. Yanukovych’s Cabinet resorted to a massive increase in social spending through the regulations it issued, i.e. regulations of the Cabinet of Ministers of Ukraine, to reinforce its competitive advantages over the opposition candidate. As a result, only months before the campaign, grants and pensions soared, but there were no legislative grounds or financial resources for these decisions. The benefits were paid from taxes collected in advance and were supposed to be cancelled on the conclusion of the presidential campaign.

Everything might be much easier this time. Controlled by the Party of Regions, the Verkhovna Rada could pass a dozen populist decisions initiated by the party in power, to convince the voters that the “better life today” they had promised during the campaign has finally arrivedi, clearly as a result of the “president’s reforms”. But if the government is unable to meet all of its pre-election commitments after the parliamentary election, which appears very likely, it can use the Constitutional Court’s decision to drop them completely or partially, saying that they no longer comply with “the state’s financial capabilities”. This will be perfectly “clean” from the legal standpoint.

Under such circumstances, both the president and the parliamentary majority will have the opportunity to place the burden of unpopular decisions on the government and sacrifice it from time to time, firing ministers to appease public dissatisfation with social policy when it reaches critical levels. There is one more characteristic detail: most of the scandalous applications to the Constitutional Court of Ukraine have been recently submitted by central government authorities and local self-governments rather than the Party of Regions’ MPs. For instance, the Constitutional Court’s decision that essentially rules out evidence in the accusation against Leonid Kuchma for ordering the murder of journalist Heorhiy Honhadze was made on the basis of an application by the SBU. The decision to seal information on the private lives of civil servants is based on a request from Zhashkiv City Council. Finally, the decision that puts regulations and instructions of the Cabinet of Ministers on the same level as laws, was made based on a relevant application by the Pension Fund of Ukraine. This means that “our party” and “our president” did not initiate these issues. It was the personal initiative of executive authorities bodies. 

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