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When Ukrainian SMEs are given a choice between two options – to obtain certain benefits for their sector from the government or to make sure that the government creates equal conditions for all enterprises – they choose the latter. This tendency manifested itself in the results of the national “Annual Business Climate Assessment” survey in Ukraine.

Businessman in front of a huge maze

In 2015, the USAID Leadership in Economic Governance (LEV) Program conducted a large-scale survey of small and medium enterprises (Annual Business Climate Assessment in Ukraine). One of the features of this survey is that entrepreneurs themselves identify obstacles to doing business and reforms they expect from the state.

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We believe that if the state ceases to intervene in the pricing mechanisms, the profitability of enterprises will improve, investments will increase and administrative burden on business will be reduced. On the other hand, there are certain risks that were the reason why the government abolished this regulation in the form of experiment.

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The need for a CMU is clear; capital markets still remain shallow despite the European Union’s founding commitment to the free-flow of capital in the Treaty of Rome. If the green paper’s estimates are correct, 90 million additional euros would be available for business financing in the member-states if capital markets were as deep as the US.

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In February 2015, the Institute for Economic Research and Policy Consulting (Kyiv) held its regular quarterly survey of industrial enterprises as a part of its Business Tendency Survey. The respondents were asked a question “Can your company use the possibility to apply a reduced rate of the single social contribution?”. Let’s take a look at the results.