How to spend the money the Minister of Finance – interview with Sergey Marchenko

The young Finance Minister is keen on sports and moves around the city on electric car

Today we publish the second part of the interview with Finance Minister Sergei Marchenko. In the first part of the interview with the Minister of Finance we have talked mainly about Finance and Economics. The second was more personal.

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– You said that during coronaries You rely mostly on domestic investors. Tell me, do you plan to make government bonds more accessible for people with average incomes, as promised for a long time?

– Yes, count primarily on domestic investors. We have undervalued the potential of the domestic market and domestic investment. This cumulative increase our ability to attract investments, including foreign. We have many internal resources that need to maximize the use. There is a demand from the public and private banks. We managed to reduce the yield from 12 to 7.5-8%. And demand remains. And sufficient to Fund the budget.

As for individuals, then they now have the ability to buy government bonds. Through private banks. Now the mobile users of PrivatBank it is possible to buy government bonds in a single click. Other banks are also developing similar applications. We work hard to ensure that these tools become more affordable, but there are certain nuances. The key question, I believe, is a habit. Our citizens keep their money in foreign currency, rarely in domestic, even more rarely on deposits. Still many people have “phantom pain” associated with the bonds of Sberbank of the USSR. Since people are wary of this kind of tools. After all, bonds are generally long-term. And here the important question of trust.

Of course, it’s a matter of time. People will see some sense and interest in such investment. I think in the future we will be able to actively attract the money of citizens in government bonds. It will be beneficial to the citizens and the state.

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– Everyone is talking about the future, and while experts believe that yield of government bonds, bearing maintenance, you can feel from 30-50 thousand UAH. So “extra” money to the average Ukrainian no…

– Given the level of incomes, of course, this tool is available for a very narrow circle of investors. But we want to grow as a country, want people’s incomes grew. Therefore needs to think strategically. Today, the crisis, but in the future we will develop at a normal pace, and the citizens will be able to consider this tool. Moreover, Ukrainian banks are already launching online solutions that simplify investing for individuals.

– Have You personally had the experience of buying t-bills?

– I did not buy. I didn’t have such interest and it was not possible to invest such a significant amount. A large part of their monthly income I use to meet the needs of my family. Yes, we have some savings, but they are not so ambitious to buy government bonds.

– See certain risks in that?

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– No, the risk is minimal, since it is the state securities. This is more a question of availability of funds. But I talk to many Ukrainians, who bought government bonds. They believe this tool is interesting for investment.

– If we’re talking about Finance Minister of Finance, I want to ask one more question. Judging by Your Declaration, You and deposited no money. Don’t trust the banks? At least the state.

– I have accounts in several banks. Their services used almost daily. About deposits will respond the same as on government bonds. The level of my family expenses does not allow you to defer significant savings. I earn enough to adequately support their families. But I have priorities to take care of it today. They cannot be postponed for tomorrow. And they all require spending. Training children – for me an absolute priority, for which ready to pay extra. I’m active in sports, and part of the money spent on this need. These and other items of expenditure, I think, resolve the issue of the deposits in my family.

You know, I agreed to become a Minister in the midst of the quarantine. Understand the risks for the family. After all, could not follow a policy of self-isolation. But grateful to my wife and children for their understanding and support. I also felt the reliability and strength of my team of the Ministry of Finance. I remember the feeling when came into the almost empty building of the Ministry was up in the office on the fourth floor, but knew that the team works. Remotely but securely. It is for this reliability, I appreciate and respect the entire staff of the Ministry of Finance.

– What sport do You do?

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– Triathlons. Now, however, time is not always enough. Before most did. Participated in the competition. Love sports. He gives strength, confidence and stability.

– Please tell us about the draft strategy of the Ministry of Finance “self-Sufficiency”. There, in particular, there is a paragraph about what You are counting on the successful completion of the current programme of cooperation with the IMF. But in the history of Ukraine it never was. Is it realistic now to run the program completely? And what items do You consider the most difficult to perform?

– Indeed, we have created the Strategy of the Ministry of Finance, designed to 2023. It is based on the programme of activities of the Cabinet. Now discussing and finalizing it with the experts. This document gives my team and country understanding the goals, objectives and key Taimanov.

– Why until 2023 th?

– A horizon of three years is sufficient for medium-term planning. It allows you to set and achieve ambitious goals. We have them for ourselves. This growth of incomes, unshadowing and increased economic activity. This is our road map, in which anyone can propose initiatives or refinement.

About the IMF. Indeed, we aim at a zero rate of borrowing in the budget in 2022. Today we are in a state of crisis. Therefore, negotiated with the IMF and received this loan. The money we receive directly to the budget.

But in the future I want to move away from direct borrowing in the budget by any international institutions. To grow in this relationship so freely to borrow in the capital markets. On terms acceptable to us. In fact, aim to become self-sufficient. It is important for Ukraine.

With regard to the conditions of the IMF. They are quite simple and respond to our national interests. For example, to reduce the share of NPLs in the state banks. It’s not the IMF need, and we, in the first place.

It’s understandable. But will it do the job? Such claim was raised before, but it was not performed.

– Today has all the potential to unlock these processes for state banks. Then the points. The revision of tariffs for heating. Now the market price of gas is lower than provided in the heating rate. Without their revision people will pay the same or more expensive. And if you review, tariffs for heating will be reduced.

But now the summer price in winter it can be quite different.

– The revision of tariffs for heating will be once a year before the heating season and for the entire heating season. This provides for the possibility of adjusting the tariffs for heating in connection with the change, in particular, tariffs for energy resources.

– Perhaps this is not quite Your question, but Your signature is a Memorandum with the IMF. So, how would You comment on the point about increased penalties for debts on utilities? Such items are indeed to frighten people. “We will develop adequate tools for heat supply companies to ensure the collection of payments from households (including higher fines and simplified legislation)”, says the Memorandum.

– This item is not a structural beacon. But we all it is important to understand that the charge for utilities is the responsibility of every citizen. In pandemic, the government provided a formal opportunity to avoid fines and penalties for non-payment. And, you know, the percentage has fallen sharply.

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Debts for communal: why the Ukrainians are overpaid bills

I urge citizens to justice. For services received need to pay on time. It is a common practice. Between society and government should be understanding. Then there will appear situations that citizens are not paid for services, then did not pay the suppliers, respectively, have not received funds energy producers. As a result, the entire chain created by the debt. Eventually the situation solves with the state. And at the expense of the citizens because they pay taxes. Therefore, I repeat, do not pay for utility services – not normal. In this case, the IMF is not to blame.

Blitz

– What it’s like to be the youngest Finance Minister in the history of independent Ukraine?

– Fine (smiles). But it is more correct to say – one of the youngest. I told colleagues seem to Yuriy Kolobov also headed the Finance Ministry somewhere in the 38-39 years. In any case, I feel completely comfortable and in its place.

– What is your greatest achievement?

– Personal – of course, this is my family, wife and children. This is my support system, which gives strength, energy and motivation to move forward. Professional achievements, I believe, is still ahead.

– How move around the city?

– On the official electric car of Hyundai Ioniq.

– Recently read a book that made an impression?

– I prefer audio books is more convenient for me. Favourite genre of biographies and historical books. Of the last is “Memories” by Sergei Witte. And another book by Walter Isaacson “Benjamin Franklin: An American Life” is about a man who, in fact, formed the archetype of the Americans.

– Favorite movie?

It is hard to say which one is favorite … I Liked “interstellar”, “Inception”, from the last – watched with my wife “The Morning Show”.

– How to start a morning as Finance Minister?

– With a morning workout at 6 am. This can be Jogging, swimming, Cycling or just basic charging. Physical activity in the morning has long been a habit.

Your Hobbies?

– Triathlon. Participated in three Ironman 70.3 races, or also called “Half Ironman” is a 1.9 km swimming, 90 km Cycling and 21 km running. Two – Turkey and Finland – successfully finished. In Portugal during the race flew off the track, was injured and could not finish the race.

– A journey that left the most impressions?

I think that was the trip with his family to Portugal in September 2019, for the third time where I tried triatlonu Ironman 70.3 series. Emotions were special. Once again convinced that this is my and I need it. At the start I didn’t finish due to injury, but rethought a lot of things in life.

Do you spend time with your family?

Is my source of recovery. Try to get out of town. Visited parents. Sometimes, having a great time and not very active. Just at home – we read together, cook, watch movies.

– You have an interesting watch. Immediately catches the eye bright strap…

Is a sports watch for triathlon Garmin 935.

– How much time spend on social networks?

At least. I’m not very active user of Facebook, Instagram or Twitter. My personal pages are full of posts. Live chat I was always closer than online.

However, the status of the Minister became more public. Still, the quarantine has made adjustments. Today it is difficult to count on success, not realizing the importance of modern forms of communication. The company has the right to be as informed about the activities of the government. Need to respond to this request.

See also, Sergei Marchenko commented on the dismissal of the NBU Governor Yakov Smoliy: