Yanukovich's ally Azarov to lead new Ukrainian government

Background

Ukaine's new President Viktor Yanukovich was on 1 March in Brussels, on his first trip abroad in his new capacity. He met EU leaders but neglected to call in at NATO headquarters (EurActiv 02/03/10).

Yanukovich said that European integration is the key priority for Ukraine. He also said that his country is interested in improving relations with Moscow, which were damaged during the mandate of his pro-NATO predecessor Viktor Yuschenko. Yanukovich will visit Moscow tomorrow (5 March).

At a time when Ukraine appears to be hesitating between developing its relations with the East or the West (EurActiv 18/02/10), European Commission President José Manuel Barroso presented a rather generous package to his guest.

Once Ukraine is back on track with the IMF, with which it is negotiating a 16-billion euro loan, the European Union should be able to unlock more than half a billion euros in macro-financial assistance, Barroso said. Also, if reforms are undertaken in the gas sector, significant additional aid would be available, Barroso said.

Barroso said the EU's most far-reaching offer to Ukraine is the Association Agreement, which the Union decided to offer Kiev in September 2008, and the negotiation of which was stalled due to the difficult political situation in Kiev since. He said that that the agreement could be wrapped up within a year.

Last but not least, the Commission president said the sides had discussed visa-free travel and the need to establish a roadmap for achieving this goal.

On 3 March, Ukraine's parliament dismissed the government of Yulia Tymoshenko, opening the way for Yanukovich to forge a new ruling coalition.

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Azarov's appointment as prime minister was endorsed by 242 votes in the 450-member assembly. It followed the announcement of a new ruling coalition led by Yanukovich's Regions Party, the Ukrainian press reported. Fedir Yaroshenko was appointed to the position of finance minister and Vasyl Tsushko became economy minister.

Before the vote, parliament speaker Volodymyr Litvyn announced that a new alliance of 235 deputies from the 450-member parliament had been formed.

"The coalition has been formed on the basis of an agreement signed by heads of the factions of the Regions Party, the Communist Party, the Litvyn bloc and the People's Party," Litvyn said.

Azarov, seen as a safe pair of hands but no radical reformer, told parliament after his nomination that his government's main task would be to redraft and win approval for a "realistic" 2010 budget.

"The country has been plundered, the coffers are empty, and state debt has risen threefold," he said.

The president, whose victory tilted the former Soviet republic back towards Russia, nominated former Navy commander Mykhailo Yezhel as defence minister and Ukrainian Ambassador to Moscow Kostyantyn Khryshchenko, as foreign minister.

Battered by the economic downturn, Ukraine needs a new government to adopt a delayed 2010 budget and restart talks with the International Monetary Fund (IMF) on a suspended $16.4 billion bail-out package.

The IMF will be watching closely how the government handles the budget, after a series of broken spending promises - backed by Yanukovich's Regions Party - derailed the bail-out package.

Formation of a new coalition following Yanukovich's victory had been necessary to avoid snap elections.

Tymoshenko's departure as prime minister marks the end of five years of rule by the leadership which emerged from the 2004 pro-Western 'Orange Revolution'.

Azarov would give Yanukovich a reliable ruling partner after the infighting between Tymoshenko and former President Viktor Yushchenko.

But he continues to face a divided country of 46 million people - split between a Russian-leaning south and east, and a west and centre inclined more to the West.

(EurActiv with Reuters.)

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