KIEV, June 3 – Parliament on Tuesday voted to support a bill closing a major gap in the 2008 budget, averting a scenario under which the government would have been forced to drastically cut spending.

The bill, which was quickly signed into law by President Viktor Yushchenko, re-confirms much of the forecast revenue this year, two weeks after the revenue had been put into question by a Constitutional Court ruling.

The court, citing the constitution, suspended legislation detailing much of the 2008 budget revenue, arguing the legislation must be approved by a separate bill. The legislation was originally approved as part of the 2008 budget vote in December 2007, something that the court had declared illegal.

The vote allows effectively closing the budget gap, estimated by the government at 141 billion hryvnias, which compares with Ukraine’s originally approved 2008 budget deficit of 18.5 billion hryvnias, or 2.1% of GDP.

“We restored the budget,” Prime Minister Yulia Tymoshenko said after the vote in Parliament.

The bill was supported by the government’s slim majority in 450-seat Parliament, temporarily easing tensions between Yushchenko and Tymoshenko.

The vote follows two months of sharp comments and even outright hostilities between the government’s two groups, one loyal to Tymoshenko and another loyal to Yushchenko.

Tymoshenko said the vote had “proved” the unity of the government coalition, adding she was confident relations between the government, Parliament and the president will get back to normal.

But more importantly, the vote allows averting drastic spending cuts in the 2008 budget that would have been inevitable if Parliament had failed to approve the bill on Tuesday.

Ukraine’s overall spending in 2008 was forecast at 294.2 billion hryvnias in the consolidated budget, which includes spending by the central and local governments.

The central budget has been lagging behind in raising cash from selling state assets this year due to a dispute over the management of the State Property Fund between Yushchenko and Tymoshenko.

The failure to collect almost 9 billion hryvnias from selling state assets has been jeopardizing the government’s social spending program, Volodymyr Matviychuk, deputy finance minister, said Tuesday.

But Tymoshenko, encouraged by the approval of the bill, said the government will probably be able to cover the privatization revenue gap by robust overall tax revenue collection this year.

“I can say that although the State Property Fund has failed to raise even a penny, due to our joint work we are able to cover the revenue gap,” Tymoshenko said.

The revenue from import duties has been especially strong this year, reflecting growing imports and helping the government to meet overall spending targets.

The government, which forecast to raise 80.9 billion hryvnias in overall revenue in January through May, had in fact raised 90.4 billion hryvnias in the period, Matviychuk said. He praised the State Customs Service for almost doubling the revenue from last year.

“It’s simply a sensation,” Matviychuk said. “Nothing like this has ever happened since independence” in 1991. (tl/ez)