KIEV, Dec. 25 – Parliament on Thursday rejected Prime Minister Yulia Tymoshenko’s 2009 budget, a development that greatly increases pressure on the government as the Dec. 31 deadline looms.

Tymoshenko’s bill calls for a budget deficit at 3% of GDP, which President Viktor Yushchenko has warned may increase cause economic troubles for the country. Yushchenko’s loyalists refused to back the bill.

“It’s like the government saying ‘come on, come on, let’s approve it fast,’” Viacheslav Kyrylenko, a member of Yushchenko’s Our Ukraine group, said. “But that means the government keeps us for boys that simply press the buttons. That’s unprofessional.”

The government needs the budget to be approved before Dec. 31 or otherwise some spending may be delayed.

Kyrylenko urged the government to incorporate Our Ukraine’s proposals that would keep the budget balanced, but will also increase spending on defense, security, humanitarian programs and healthcare.

“Once the government takes our position into account, we can approve the decision as soon as tomorrow,” Kyrylenko said.

Ivan Kyrylenko, the leader of the Tymoshenko group in Parliament, said the government will be working with lawmakers throughout the night to make sure the bill is approved Friday.

“There is 18 hours until [Friday] morning,” Kyrylenko said late Thursday. “You know, we’re spending night here and we will be doing everything possible until the budget is approved. So, tomorrow there will be a budget pain.”

The budget sees revenues of 237.5 billion hryvnias and spending of 268.5 billion hryvnias and is based on an economic growth forecast of 0.4% and inflation target of 9.5% -- which analysts have called optimistic.

Most independent analysts see Ukraine’s economy contracting 3% on the year in 2009, which would automatically reduce revenue and may further increase budget deficit.

Finance Minister Vikor Pynzenyk, a member of the Tymoshenko Bloc, clashed with the prime minister over the budget last week, suggesting the budget as he sees the forecast as too optimistic, according to people familiar with the situation.

Yushchenko recently criticized Tymoshenko’s budget draft for predicting budget deficit and called for a deficit-free budget to help the economy weather financial crisis.

The government has been amending the budget draft - which was originally submitted to Parliament in September - after the hryvnia had lost 43% of its value against the dollar over the past three months.

But Arseniy Yatseniuk, a former speaker of Parliament and a former acting governor of the National Bank of Ukraine, said the country will suffer economically if the budget is not approved before the end of December.

“The budget must be approved,” Yatseniuk said. “If it’s not there, this will send a negative signal for both domestic and external investors.” (tl/ez)