New Ukrainian government to emerge in two days, acting president says

The new Ukrainian government should be formed and approved on Feb. 27, Oleksandr Turchynov, the parliamentary speaker and acting president of Ukraine stated on Feb. 25. Parliamentary members should work day and night to form the government, he said.

Alexander Paraschiy: Turchynov’s statement looks worrying to us given that a day before, the Rada dismissed some ministers. So it was broadly expected that the new Cabinet would be appointed today. Each day of delay looks risky for Ukraine’s macro stability: the West is very unlikely to provide macro financing unless a new government is formed. And macro support is vital: just in the first couple of hours today, the hryvnia lost more than 4% on the interbank exchange and is now closely approaching an important psychological level of UAH 10/USD.

We attribute the delay in appointing the new Cabinet to tensions between pro-EU forces in parliament (what all observers have been concerned about), as well as increasing tensions between the new “majority” in the Rada and organized activists, who are still crowding Kyiv’s Maidan. In these circumstances, Thursday even looks optimistic for the new government’s formation. That said, if yesterday we were looking quite enthusiastically at macro stability in Ukraine, now we see that the risks of some shocks are increasing.