COMMENT: Fragile balance in Ukraine politics shaken by economy minister's resignation

COMMENT: Fragile balance in Ukraine politics shaken by economy minister's resignation
Aivaras Abromavicius is one of the faces of Ukrainian reform.
By Kateryna Kruk in Brussels February 3, 2016

The resignation of Economy Minister Aivaras Abromavicius has shaken the fragile balance in Ukrainian politics and could herald a collapse in the government of Prime Minister Arseniy Yatsenyuk.

Kyiv's politicians have already been negotiating changes to the government for several weeks. The general logic of a reshuffle is rather simple: Yatsenyuk must stay as prime minister, but there must be "fresh blood" in the government. This formula was agreed upon after the visit of US Vice President Joe Biden, who opposed dismissing the PM in order to maintain the balance of power between the president and the government.

The negotiations have already triggered several moves. A few days ago, the Samopomich (Self Reliance) party withdrew its minister (Agriculture Minister Oleksiy Pavlenko) from the government. Earlier, Infrastructure Minister Andrii Pivovarsky announced his resignation, citing a lack of changes in the way the government was functioning, and the way many of his decisions were being blocked. Yet Ambromavicius's resignation and how he announced it could be a real game-changer for many politicians and a final nail in the coffin of the Yatsenyuk government.

First and foremost, Abromavicius is one of the faces of Ukrainian reform and one of the most successful ministers. He and Finance Minister Natalie Jaresko (another foreign-born outsider) were always referred to as success stories. Being responsible for the Ukrainian economy, Abromavicius was involved in all the negotiations with foreign partners. His resignation is a huge credibility blow for Ukraine in the eyes of the International Monetary Fund, European Bank for Reconstruction and Development, European Commission and EU member states.

Investors too are worried: immediately after Abromavicius's resignation, the price of Ukrainian Eurobonds slumped, with yields on the dollar-denominated bond maturing 2019 up 43 basis points to 10%,

Secondly, the reason for his departure casts a cloud over the whole governing coalition. The failure to launch reforms was a conscious decision and not dictated by war, as the authorities have been claiming. The government and the president who had promised a war against corruption, who gained power from the Euromaidan protests with the promise to change the system and stop corruption, in the end decided to benefit from corruption mechanisms, not to fight them. What was only discussed and suspected before, has now been confirmed by a top official.

But there is one politician who could benefit from this situation: Mikheil Saakashvili, the former president of Georgia and now the governor of the Odesa region. Saakashvili has made anti-corruption the main topic of his public speeches. He created the Anti-Corruption Forum, which has been a huge success and has already been extended to three other Ukrainian cities. Abromavicius has now corroborated Saakashvili's view that corruption is the main disease of Ukraine and should be tackled immediately. 

It is hard to believe that Saakashvili's ambitions will be limited to Odesa. If he was looking for a way to move to the top level in Kyiv, Abromavicius's resignation gives him the chance to transform his anti-corruption movement into a party and use his popular anti-corruption message to good effect in future elections.

Saakashvili's reputation as a symbol of Georgian reforms, as a politician with one of the highest approval ratings in Ukraine, should help him quickly establish his party and attract many activists and technocrats to its list. Saakashvili is already supported by the Democratic Alliance and is negotiating with the People's Power party, a bottom-up party which became a sensation in the last local elections. 

One fact is worth particularly noting: the US embassy was the first one to back the decision of Abromavicius and promote it on social media. It could be a sign that Ukraine's most powerful ally has shifted its preferences from Yatsenyuk to Saakashvili, or has at least decided to support both. In any way it is a clear red card for Poroshenko.

A few hours later the ambassadors of Sweden, the US, Canada, Italy, France, Germany, the UK, Japan, Lithuania and Switzerland issued a joined letter stating that they are deeply disappointed by the resignation of a minister who delivered real reform. They wrote: "It is important that Ukraine's leaders set aside their parochial differences, put the vested interests that have hindered the country's progress for decades squarely in the past, and press forward on vital reforms". 

The resignation of Ukraine's government is now almost inevitable. If the governing coalition falls, that would mean that new parliamentary elections must take place. On one hand it could bring to the parliament young Ukrainian parties, such as People's Power party or the one that could be established by Saakashvili.

Yatsenyuk's People's Front might not even be present in the new Rada; Poroshneko's eponymous bloc in the Rada has also been weakened by recent scandals; the Opposition Bloc and other pro-Russian parties might increase their number of seats, but it is very unlikely that they will have a grand return to power like after the Orange Revolution.

Yet on the other hand a political crisis in the war-torn country would be something close to suicide. We should also remember that the prolongation of EU sanctions against Russia depends not only on the implementation of the Minsk agreement by Russia, but also serves as a gesture of support and a reward for Ukraine. Lack of progress with reforms together with a political crisis would make it harder and harder for the EU to maintain its resolve that sanctions should be prolonged.

Activist, journalist and co-founder of Global Ukrainians, an international network of Ukrainians worldwide, Kruk was awarded the Atlantic Council Freedom Award for her work communicating the Euromaidan revolution to the world via Twitter. She predicted a frozen conflict in July 2014, which has largely come to pass, and now comments on the progress of crucial reforms in Ukraine.


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