KIEV, Sept. 9 – President Viktor Yanukovych said Thursday his administration has been working on reforms of the system of local self-governance in Ukraine that will provide greater economic and financial independence to the country’s regions.

“The times of the state’s pressure on self-governance is coming to an end,” Yanukovuch said addressing a meeting of his Regions Party. “Cardinal legislative changes are being prepared. They will provide citizens new, much wider administrative powers.”

The comment comes a day after Yanukovych has signed a bill into law that effectively reduces powers of elected leaders in the city of Kiev.

The law allows Yanukovych to appoint the head of the Kiev city government that will have the most administrative and economic powers in the city, reducing powers of the mayor, an elected leader.

The same law also opens the door for eliminating elected district councils in the city of Kiev, replacing them with administrations whose head will also be appointed by Yanukovych.

Yanukovych’s controversial regional policies, which include promoting Russian language and re-writing history textbooks towards improving the image of Russia, have angered many in western regions of Ukraine.

Lviv region council on Wednesday approved a no-confidence motion in Lviv region governor Vasyl Horbal, an appointee of Yanukovych, underscoring a direct attack on his regional policy.

Horbal, however, refused to step down, setting stage for a continued clash with local elite.

Yanukovych said that other reforms that his administration has been working on include reform of the social security department, in addition to economic reforms.

“We are standing on the threshold of a serious reform of the social sector,” Yanukovych said. “The social payments must be targeted that will at the same time be solving two goals: including social assistance and also becoming an instrument of economic growth.”

“We have been also working on a plan for economic transformation aimed at modernization of the national economy securing sustainable economic growth based on investment and innovative model,” Yanukovych said.

The government forecast that the economy will expand 3.7% on the year in 2010 and will accelerate the growth to 4.5% on the year in 2011, reversing 15% on-year contraction in 2009.

Meanwhile, the National Bank of Ukraine forecast that the country’s economy will expand 4% on the year in 2010 and will slow down to 3.7% growth in 2011. (tl/ez)