Ukraine parliament forms coalition, approves new government

Ukraine’s parliament approved on Feb. 28 an interim government to serve until a new president takes over following elections scheduled for May 25. Arseniy Yatsenyuk, a 39-y-old banker and economist, was elected prime minister. Borys Tarasyuk, a veteran diplomat, was elected vice prime minister for EU integration. Oleksandr Shlapak, a veteran bureaucrat, was elected finance minister.

A coalition of 250 MPs emerged in parliament on Feb. 28 called the European Choice, led by three factions: the populist, pro-EU Fatherland party; the populist, pro-EU Ukrainian Democratic Alliance for Reform (UDAR); and the nationalist, pro-EU Freedom Party. With not enough votes between them to form a majority, the coalition was joined by two new groups: Economic Development and Sovereign European Ukraine, consisting of independent MPs and some Party of Regions defectors.

When addressing parliament, Yatsenyuk declared it to be “the government of political kamikazes.” “We stand before inconceivable economic challenges and in order to conquer them I declare from this high tribune: we don’t have any other way out besides making extremely unpopular decisions,” he said. “These decisions will apply to (state) subsidies, these decisions will apply to (utility) rates, these decisions will apply to cuts in social programs and these decisions will apply to preserving the country’s financial system.”

In his first speech to the new Cabinet, Yatseniuk ordered all fiscal spending to be placed under strict control.  “No state cars, no government benefits and privileges, no budget spending for ministers” he stated on Feb. 27.

Alexander Paraschiy: Such declarations of the new PM are a pleasant relief in light of the poor state of finances. The newly elected Cabinet of Ministers will have to revise the initial 2014 budget draft to cut much spending, particularly in the social spheres. We expect that he will follow through on his bold declaration, if not simply for the fact that the Ukrainian government has no other choice if intends to avoid default and collapse.