KIEV, Sept. 1 – The opposition Regions Party blocked the podium of Parliament on Tuesday after its bill aimed at increasing minimum wages and pensions was rejected by lawmakers.

The development sends the legislature into a state of turmoil just as the government needs to approve the 2010 budget in order to secure lending from the International Monetary Fund.

“We have enough energy to run for a long time,” Oleksandr Yefremov, a senior member of the Regions Party, said. “If Parliament fails to approve the main decision on increasing social standards, the work on other issues makes no sense.”

The bill, which calls for increasing the minimum monthly wage to 1,500 hryvnias and the minimum monthly pension to 1,300 hryvnias, was backed by 200 lawmakers in the 450-seat Parliament.

Ukraine’s current minimum wage, in effect since July 1, is 630 hryvnias, according to the 2009 budget.

The government, led by Prime Minister Yulia Tymoshenko, argued that approval of the bill would destabilize state finances and may trigger rocketing consumer price increases.

An increase of the minimum wage to 808 hryvnias from 630 hryvnias would double Ukraine’s budget deficit to 8% of the gross domestic product, analysts said.

But the Regions Party insisted that the bill must be approved, and had before the end of Tuesday submitted a new bill that calls for the similar increases of wages and pensions.

“We will insist that the bill is debated as a priority at the next session,” Yefremov said.

Another senior member of the Regions Party, Hanna Herman, said that blocking of Parliament will continue until the demands are met, suggesting a long standoff is looming between the opposition and the pro-government coalition.

“The only compromise is to vote for the bill,” Herman said. “We simply have no room for other compromises.”

The blocking of Parliament underscores fears within the government that Parliament will not be able to approve the 2010 budget as leading political figures and their parties launch campaigns for the approaching presidential election.

The election, which is due on January 17, 2010, is forcing both, pro-government and opposition groups, to compete by suggesting populist bills, while the budget revenue is suffering from major economic contraction.

But the IMF, Ukraine’s biggest lender, warned recently that uncontrolled widening of the budget deficit may force the fund to suspend its $16.4 billion stand-by loan. Ukraine received $10.5 billion within the loan since November 2008.

An IMF team arrived in Ukraine on Tuesday for talks over the next loan installment, but a senior official at the Finance Ministry had predicted the talks will be “difficult.” (tl/ez)