Ukraine leader pledges to name PM soon as IMF talks loom

Reuters News
Posted: Dec 07, 2012 6:54 AM
Ukraine leader pledges to name PM soon as IMF talks loom

KIEV (Reuters) - Ukrainian President Viktor Yanukovich has promised to name his choice of new prime minister by Sunday and to nominate someone whose first big task will be to try to broker a new loan deal with the International Monetary Fund.

Ukraine also faces the prospect of repaying its foreign creditors $9.1 billion in 2013, up from $6.5 billion this year. The 2013 sum includes $6.4 billion owed to the IMF and Ukraine has said it hopes to refinance that debt.

Yanukovich accepted the resignation of Prime Minister Mykola Azarov's government on Monday, a move that was widely expected after a parliamentary election on October 28.

He has not indicated who he wants as his next prime minister but has not ruled out re-appointing Azarov, a long-time ally and government veteran who is now acting prime minister.

However, Serhiy Arbuzov, the central bank head, has also been mooted as a strong favorite for the top government post if Yanukovich decides to ring the changes.

Yanukovich was quoted on his website on Thursday night as saying he would nominate his candidate for prime minister before he left for an official visit to India on Sunday.

"I will announce the candidate for prime minister by this Sunday," he was quoted as telling a group of diplomats.

The new parliament, which must vote on Yanukovich's nominated candidate, will convene on December 12.

Azarov, 64, served as Yanukovich's prime minister after the latter won the presidency in February 2010, and is regarded as a safe pair of hands and a political neutral who is not linked to any specific group of billionaire power-brokers in the country.

But his resistance to pressure from the IMF to raise household gas prices - a move that would be unpopular but which the Fund sees as essential to control the budget deficit - prompted it to suspend payments under a stand-by program in early 2011.

The principal lender to the cash-strapped former Soviet republic, the IMF on Thursday raised eyebrows after it put back to late January a visit to Ukraine for talks over a possible new loan arrangement. The mission had originally been due to arrive on Friday.

The Fund's local representative, Max Alier, said it had made the decision at the request of the Ukrainian authorities in view of possible government changes.

Some analysts have speculated that Yanukovich might replace Azarov with someone more flexible ahead of the new loan talks with the Fund.

Though Azarov has been resistant to IMF pressure for a hike in household gas prices and a more flexible exchange rate for the national currency, the hryvnia, Ukrainian analysts and media have so far mostly bet on him being reappointed as premier.

The idea of giving the job to 36-year-old Arbuzov, who has close family ties to Yanukovich through his mother who runs a private bank owned by Yanukovich's family, is seen as risky in the current economic circumstances.

(Writing By Richard Balmforth; Editing by Andrew Osborn)