Wednesday, November 04, 2015

Ukraine PM Promises A New Cabinet

KIEV, Ukraine -- Ukraine’s Prime Minister Arseniy Yatsenyuk has pledged to bring in a new cabinet after his Western-friendly coalition suffered a resounding defeat to the parties of oligarchs and Russian sympathizers at local elections last week.


Prime Minister Arseniy Yatsenyuk

“There have been mistakes,” Yatsenyuk admitted to POLITICO during an interview in his Soviet-era cabinet offices.

“But I will correct these mistakes with new folks sitting in the cabinet.”

Ministers from energy, healthcare, and education will be gone within two weeks, the prime minister said, and there will be a new deputy prime minister for European integration.

But the replacements tasked with resuscitating Ukraine’s European dream have yet to be agreed with President Petro Poroshenko.

“It’s too early to say who, this could shatter the coalition,” he explained, revealing the fragile nature of the four-party pact that keeps his government afloat.

“We are in talks with the president. But the quicker we announce the better.”

It’s been a tough 20 months since Yatsenyuk became premier last February.

Appointed and then elected in the wake of the bloody revolution that ousted Kremlin-backed President Viktor Yanukovych, he and his presidential partner rode a wave of pro-European sentiment to take a combined 40 percent of the vote at parliamentary elections last year.

But a 17-month long Russian offensive in eastern Ukraine has drained his government’s resources, IMF loan conditions have tied his hands and corruption allegations have smeared his character.

Like his predecessors, Yatsenyuk is now forced to enter his office through a hidden entrance to avoid a protest camp out front, his approval rating stuttering at a miserable two percent.

“When I was sworn in to the office of prime minister I knew this was a kamikaze mission, I had to clean the house,” he said.

“I had to pass three austerity packages, to impose market pricing in the energy sector, to impose new taxes, to entirely modernize Ukrainian social security system. I was obliged to do the most unpopular things in the history of this country.”

The IMF applauded his government’s efforts, but so dire were his party’s chances to win any significant mayor or local council positions last weekend, he chose not to run in an attempt to bolster the president’s party.

Despite that sacrifice, the president’s candidates for mayor were defeated in every major Ukrainian city except Kiev, with pro-Russian or oligarch-backed candidates taking Kharkiv, Dnipropetrovsk and Odessa.

The prime minister blames Russian President Vladimir Putin for leveraging the elections to “change the whole political landscape in Ukraine” and said that Russia remained dedicated to seizing control of its western neighbor by discrediting his government.

“I believe that Russia stands behind all these corruption allegations, scandals, misinformation, no doubt. Putin has changed his tactics, but he hasn’t changed his mind. His ultimate goal is to take over Ukraine.”

Yet perhaps the most damning of the corruption allegations comes not from Russia, but Switzerland.

The Swiss government is investigating the premier’s close ally and fellow party member Mykola Martynenko on bribery and money laundering charges.

Martynenko is the current head of the parliamentary energy committee, which oversees the state nuclear industry.

According to a leaked request from the Swiss Attorney General’s office, investigators want to question him over allegations that he accepted 30 million Swiss francs for an agreement to supply equipment for Ukraine’s nuclear power stations.

Ukraine appears reluctant to cooperate with the Swiss investigation into the lawmaker, which has dragged on for more than two years.

When questioned about the matter, the prime minister ducked responsibility on a technicality, saying the case was the sole responsibility of the Ukrainian prosecutor’s office.

“The Swiss government didn’t contact the Ukrainian government. The government has nothing to do with the prosecutors office, nor the judiciary. The prime minister cannot ask anyone to bring to justice anyone — this is an abuse of office.”

He also refused to order a party or parliamentary investigation into the matter, on the basis that his ally “strongly denies all these allegations.”

Bespectacled, bald and scholarly, the 41-year-old former lawyer has an eye for detail but holds little appeal for the voter’s eye.

Eloquent but technocratic, he faces a mounting challenge from Georgian firebrand and Odessa governor Mikhail Saakashvili, who not only has a full head of hair — but was voted Ukraine’s most popular politician last month.

The former Georgian president has accused Yatsenyuk of pandering to the interests of oligarchs, particularly those of energy and aviation tycoon Ihor Kolomoisky.

The prime minister’s response was to lash out at Saakachvili.

“This is the showcase of Misha,” an exasperated Yatsenyuk said in the interview, using the diminutive form of the Georgian’s first name and referencing charges brought against the former president in his home country.

“If Misha was so successful in Georgia, tell me why he can’t go back there. What’s up with the reforms of the judicial system in Georgia?”

While many Ukrainians regard Ukraine’s billionaire businessmen as criminals, Yatsenyuk says his dealings with oligarchs are necessary to get key business leaders on board with Ukraine’s reforms. 

“I’ve met with all of the oligarchs — hundreds of thousands of people work at their companies — they have a number of assets in energy and industry. I have to explain to them — look guys, rules have changed, now you have to play by the rules.”

He points to the elimination of FBI suspect Dmitry Firtash from the gas sector and the demonization of his government by oligarch-owned media outlets as evidence that it is tackling the country’s tycoons and curtailing their plunder of its energy sector.

Government figures show state-owned energy supplier Naftogaz Ukraine reduced $10 billion losses under the last government to less than $1.5 billion this year.

Next year it is expected to turn a profit.

Those efforts may be overshadowed however, if Ukraine cannot restore a working business relationship with Russia, which continues to supply more than 30 percent of its gas.

Moscow refused to accept a debt deal agreed last month between Ukraine and its international creditors, demanding full repayment of a $3 billion loan in December.

Despite the disastrous consequences a default could have on his country’s economy, Yatsenyuk is defiant.

“The deadline for Russia to join the club is 29 November,” he said.

“If Russia rejects the Ukrainian offer, we will impose a moratorium. Russia will be treated the same way as the other creditors have been treated.”

With the tumultuous two years Ukraine has had, it’s easy to forget it’s only been a year since Yatsenyuk was elected.

In that time his government has sacked 28,000 public officials, introduced a new police force to patrol key cities and passed a raft of legislation aimed at curbing corruption.

The prime minister’s hope is that next year a reformed prosecutor’s office will start delivering corruption convictions that will help his popularity bounce back in time for elections in 2018.

“I need a breathing space of three or four years in order to get tangible results from these reforms. If I implement these reforms and I get positive results, I’ll be back.”

But if the prime minister can’t clean up his own party first, he may not get that space.

There’s a power-thirsty political veteran down south and he’s using YouTube videos and social media posts to whip Ukraine’s youth into a reformist frenzy.

His name is Mikhail Saakachvili.

Source: Politico

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