Cabinet of Ministers issued a decree number 61 to increase the authorized capital of the State Mortgage Institution on 500 million UAH - to 700 million UAH. These funds will be allocated for non-returnable basis at the expense of state budget stabilization fund. In order to gain the required amount, the Cabinet intends to sell the six-month internal government debt (Government Bonds) with yield 21.3% per annum.

The same document the government abolished the decree number 1068 of September 30, 2009 Act, which President Viktor Yushchenko has suspended the decree number 949 is 20 November. Then it came to raising capital GIU 1 billion UAH from the sale of five-year Government Bonds with a lower rate - 17,1%. The office of the (SP), Kommersant reported that the new Cabinet"s decision likely will not be challenged as not contrary to the Budget Code.

"In the absence of the country"s budget law for 2010, according to Art. 46 of the Budget Code, the Government can spend money, including for the purposes specified in the draft Law on State Budget, filed with the Verkhovna Rada. In addition, according to the accepted Crisis Law № 639-VI, Cabinet has the right to spend money from the stabilization fund. His first article allows direct these funds among other things, to increase the capital of SMI ", - explained the head of the main service of socio-economic development of the joint venture is necessary. The draft budget-2010 for the SMI provided 1.04 billion UAH.

The decree number 61 indicates that the SMI has the right to use 500 million UAH "only to carry out its statutory objectives." In what funds will be spent, chairman of SMI Andrew Kamuzu and his deputy Sergei Svyatka reported yesterday refused. But in September the Cabinet had planned to spend 1 billion UAH to provide housing to citizens in need of better housing conditions.

for these purposes in 2009 was sent to UAH 1.58 billion. The Charter also allows SMI to refinance mortgages. However, on Saturday, Prime Minister Yulia Tymoshenko told how to develop mortgage lending. According to her, 5 state-owned banks will be able to extradite citizens of mortgage loans for up to 20 years at 5% per annum with no down payment. At this rate semi-annual income from lending to 500 million UAH will be only 12.5 million UAH, while the government service issue state bonds to spend 53.25 million UAH.

experts do not approve of the development of the mortgage market by increasing the national debt. "Mortgage develop essential for the growth of the construction market. After all, its absence will reduce the demand for housing. But it is doubtful whether the Cabinet will be able to implement his election promises, as developers and banks are not interested in working at low rate of return," - said a senior analyst at SG Astrum Investment Management Sergey Fursa. "Theoretically, the government can refinance such loans, but it would seriously increase the already huge budget deficit. And therefore - to accelerate the build the state debt" - sure, the independent expert Eric Naiman.

Maria Tsaturyan

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