Ukraine MPs refuse to grant President wish: Political crisis deepens as Kravchuk is denied powers to push through reform

KIEV - Ukraine's political crisis deepened yesterday with hardline deputies rejecting demands by President Leonid Kravchuk for special powers to carry out economic reforms.

The Communist-dominated legislature also refused to approve the resignation tendered on Thursday of the Prime Minister, Leonid Kuchma. The leadership stalemate has put on hold a sweeping reform programme in the former Soviet republic, already mired in economic chaos with 170 per cent inflation for the first three months of this year.

Mr Kuchma, who took office last October, tendered his resignation after failing to get parliament - dominated by former Communists - to extend special powers he was accorded in December to implement economic reforms.

After he resigned, Mr Kravchuk, 59, offered to take over as head of government as well, and asked parliament for special powers to rule by decree. 'In this turbulent economic situation Ukraine needs someone who can take things in hand, and I am ready,' he said.

The deputies did not explicitly debate Mr Kravchuk's proposal, but simply reactivated an article of Ukraine's constitution giving the president decree-making powers in economic matters only if parliament was unable to act.

'All he has obtained is the right to adopt decrees on minor economic matters,' said an MP, Viacheslav Chornovin, a political opponent of Mr Kravchuk.

Following the parliament's decision yesterday, Mr Kravchuk told deputies: 'You are standing in the way of a government which has been acting courageously for the last six months in the face of catastrophic circumstances . . . Someone must take things in hand, the parliament, the government, the President.' He accused the deputies of having taken no decisions since April, and said he would 'call on the people' to help resolve the stalemate, indicating that he may call a referendum.

The parliament's move, which came after four days of debate, was a further setback to Mr Kuchma's efforts to reform the republic's moribund economy.

'We are going to remain in the situation which the parliament is imposing on us,' said the Vice-Premier, Viktor Pinzenik, who is in charge of the reform program. 'I don't think we can work effectively . . . The deputies want to close their eyes and sleep, then wake up the next day and find that everything is all right. But the problems are not going to disappear.'

Until now Mr Kravchuk has stayed out of the economic realm, concentrating on foreign affairs. For the past six months he has been in the shadows of Mr Kuchma, who had called for a programme of reforms - including privatisation, the freeing up of foreign trade and foreign investment to modernise the economy.

The parliament recently vetoed a number of economic decrees, including price rises and the selling of shares in large companies to prepare them for privatisation. The battle between Mr Kuchma and the parliament had also centred on control of the central bank, which Mr Kuchma had criticised for supporting money-losing state-owned enterprises and driving up inflation.

Ukraine has introduced only timid economic reforms since the collapse of the Soviet Union, and its economic problems are daunting. Only 1 per cent of state-owned housing has been sold to the private sector. Inflation reached 170 per cent in the first quarter of 1993 and the karbovanet, its temporary currency which could be exchanged at a rate of 500 to the dollar in November, now stands at 3,000 to the dollar.