KIEV, Dec. 9 ??“ Ukraine will face a major problem with financing social programs, including increased pensions for millions of retirees, if President Viktor Yushchenko vetoes the 2007 budget, the Finance Ministry warned Saturday.

The warning comes amid growing tensions between the pro-Russian government and the pro-Western president over the course of the country??™s foreign policy and the pace of economic reforms.

The Justice Ministry asked the Constitutional Court earlier this month to clarify whether the president has the power to veto the budget highlighting fears within the government that Yushchenko may reject the bill.

The latest warning from the Finance Ministry suggests that these fears have been growing and the government now has been taking steps to put pressure on the president to accept the budget.

???The budget veto will lead to poor financing of the social sector, 13.5 million pensioners will not get their increased pensions and other benefits,??? the ministry said. ???There will be no legal grounds to pay child birth benefits, about 2.5 millions of Chornobyl clean-up workers will be affected as well as military retirees.???

Yushchenko has been persistently criticizing the government for not doing enough to increase social benefits for the poor, and has warned he would veto the budget unless such spending is increased.

Both, Yushchenko and the government have been increasingly using social spending rhetoric while appealing to the people amid speculations that the president may resort to dismiss Parliament and call early election.

Relations between the president and the government are strained over foreign policy as Yushchenko has been pushing for rapid accession to NATO, while the government has been seeking closer cooperation with Russia.

This, coupled by the growing dispute over constitutional powers enjoyed by the president and by the prime minister, could lead to a constitutional crisis unless the rival groups strike a political compromise.

Yushchenko??™s veto on the budget will show that the president and the government have been increasingly heading towards a major confrontation that could result in the early election next year.

Prime Minister Viktor Yanukovych met Yushchenko on Friday to discuss the budget. Yushchenko told Yanukovych that he will decide by Wednesday on whether to sign or to veto the bill.

Oleksandr Shlapak, the head of the economic department at the presidential office, said the government has failed to meet Yushchenko??™s major budget proposals. (tl/ez)