Ukraine gov’t commits to fast reforms, Cabinet reshuffle possible soon

The Ukrainian president, prime-minister and head of parliament assured the ambassadors of the G7 nations that they will make joint efforts to effect reform in the country, Japanese ambassador Shigeki Sumi told Ukrainian journalists on Feb. 4, Interfax-Ukraine reported. The ambassador said the G7 representatives had a two-hour meeting with top Ukrainian officials, during which they discussed, among other things, the resignation of Economy Minister Aivaras Abromavicius. Sumi declined to answer journalists’ questions about whether the retention of Arseniy Yatsenyuk in the position of Prime Minsiter was discussed during the meeting.

President Petro Poroshenko’s post-meeting statements shed little light on the prime minister’s prospects. “A rapid rearrangement of the Government is essential” for the continuation of reforms, Poroshenko said, according to a release from the presidential press service. “At the same time, the President believes that the minister-reformers and their teams should stay”, the release stated. Later on, Poroshenko’s advisor, Oleh Medvedev, clarified in an interview to TV Channel 5 that the Ukrainian parliament is going to listen to a report from the Cabinet on Feb. 16. After that report, some reshuffling of the Cabinet is possible. “It’s obvious that some personnel changes must take place in the Cabinet,” Medvedev said.

Recall, Abromavicius announced his resignation on Feb. 3, citing constant attempts to sabotage his reform efforts by the president’s ally Ihor Kononenko. Just after Abromavicius’s demarche, the ambassadors of ten countries, including all G7 members, expressed their “deep disappointment” at the minister’s resignation.

At the extraordinary Cabinet meeting on late Feb. 4, four of the five ministers which earlier filed  resignation requests (which were not approved by the parliament) promised to withdraw them, on certain conditions. In particular, Infrastructure Minister Andriy Pyvovarskiy stated that he is ready to stay with the Cabinet if state officials would get a “fair salary” and if state procurements would become more transparent. Abromavicius was absent from the meeting and later stated via press-service that he is not going to withdraw his resignation request.

Alexander Paraschiy: It looks like president Poroshenko and PM Yatsenyuk are trying to advocate for keeping the current Cabinet in place and just reshuffling some of the governmental positions (as an alternative to the dismissal of the entire cabinet, something that is widely discussed these days). At the same time, partial rearrangement of the Cabinet might not be acceptable to the minor coalition factions, Fatherland and Self-Reliance, which collectively have a “golden share” in the parliamentary coalition. Keeping Yatsenuyk as PM might also be unacceptable for “minister-reformers”, including Abromavicius.

While there is still some chance that Yatsenyuk will retain his position (even though his political popularity is incredibly low), we believe that the split of the coalition and extraordinary parliamentary elections is the most likely scenario right now. While such an outcome could ignite some short-term turbulence in the financial sector, it will be beneficial for Ukraine in the mid-term. It’s clear to us now that the current Ukrainian parliament is no longer capable of supporting reform.