Victor Yushchenko is now chairing a meeting of the National Security and Defense Council of Ukraine, according to the President`s press-office.

Its participants are expected to discuss ways to prevent capital outflow, as well as plans to allow foreign soldiers to enter Ukraine for multinational military exercises in 2007.

Prime Minister Viktor Yanukovych, who is attending the meeting, asked the Council to put off discussing anti-corruption measures until later.

In his speech, the President said capital outflow posed one of the biggest threats to the country’s national security. Although there are no official statistical data, it is said a colossal 12.9 billion U.S. dollars left the economy between 2004 and 2006, with USD 13.2 bln of direct foreign investment flowing in the country.

“We are proud of having this unique investment inflow, especially over the past two years, but we must realize that the same sum was taken out of Ukraine’s effective, rational economic circulation,” he said.

Given Ukraine’s USD 6.7 bln trade deficit, the tendency is particularly dangerous, he added. 

“We may soon be facing very serious challenges disrupting price and monetary stability.” 

The President said law enforcement agencies worked ineffectively to prevent capital outflow. He added that the government introduced no reforms encouraging home investment. 

“At this table, we must ask those in charge of improving the investment climate why we have not yet created a comfortable business environment and why the black economy flourishes,” he said, slamming the State Committee for Financial Monitoring for failing to prevent murky financial transactions.