The payments crisis has become so acute that the mayor of Kalush, in western Ukraine’s Ivano-Frankivsk Oblast, and his staff have gone out on strike in protest. If this continues, other local officials are likely to join him as the winter sets in and citizens start feeling the pain from poor or non-existent municipal services.

The problem also highlights some of the fundamental flaws with Ukraine’s highly centralized system of government taxation and spending. Simply put, taxes shouldn’t all to go Kyiv, and tax money shouldn’t all be distributed from Kyiv.

Ukraine should create a system in which both power and spending are spread out across different levels – national, regional and local.

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