Ukrainian Finance Minister Natalie Jaresko is in talks with President Petro Poroshenko on possibly taking over the job of prime minister from Arseniy Yatsenyuk, according to reports over the weekend.

Concrete talks are underway between the president and Jaresko, reported Ukrainska Pravda, citing unidentified officials in the presidential administration on March 4, adding that the US-born technocratic finance minister has drawn up a list of demands she wants fulfilled before accepting the post.

The finance ministry has declined to comment on the report, but speculation that talks have begun have been building all week. bne IntelliNews market sources said that some international investors had started buying Ukraine bonds on Friday towards the end of trading on the back of the reports. Ukraine’s bonds have been on a rollercoaster ride over the last two years as they swung from best performing to worst and back again as investors vacillate over the chances Ukraine will successfully make the transformation to a modern western-style economy.

It is unclear what mechanism could be used to remove Yatsenyuk after his government survived a no-confidence vote in the last week of February, because under the constittution this cannot be repeated for another six months. However, it may be possible to bring a no-confidence vote against Yatsenyuk personally that could force him from office. 

Jaresko has been responsible for some of Ukraine’s few successes –  notably the restructuring of Ukraine’s external debts – since the pro-Western government took over following the Maidan revolution that ousted former president Viktor Yanukovych just over two years ago.

However, as the former head of Horizon Capital, a USAID-backed fund, she remains an outsider in Ukraine’s political moshpit and lacks her own political powerbase.

Her conditions for accepting the job are largely aimed at creating a technocratic government that would push ahead with liberal but painful reforms that have been fiercely, and so far, successfully, resisted by Ukraine’s leading oligarchs.

Amongst Jaresko’s demands is that her appointment be approved by all the coalition parties, reports Ukrainska Pravda. She has also asked for measures that would “shield the cabinet from parties’ influence". Ukraine’s political parties are still thickly populated with proxies for the oligarchs, who blatantly manipulated a vote of no confidence in Yatsenyuk through a backroom deal that kept him in office, triggering the current political crisis.

Most importantly, Jaresko presented a list of candidates who she wants to include in the government that also includes a blacklist of people she wants to specifically exclude from government. This point will be especially awkward for Poroshenko, as he has faced down heavy criticism for keeping his own people in positions of power despite their obvious flaws.

Poroshenko refused to fire Viktor Shokin as the ineffective general prosecutor until the decision was more or less forced on him after the International Monetary Fund (IMF) threatened to cut off Ukraine’s funding if no progress was made on the anti-corruption drive. Kyiv is still waiting for a transfer of $1.7bn from the IMF that was due in January. Likewise, Lithuanian-born Aivaras Abromavicius, economics minister and another successful reformer, quit in dramatic fashion on February 3, claiming that Poroshenko was trying to foist his own proxies on the minister who would stymie reforms.

Poroshenko attempted to defuse the criticism at the end of February by publicly calling for the resignations of both Shokin and Yatsenyuk as part of a general government reshuffle. But the reset was badly fluffed when it became clear the president was saying one thing, while simultaneously cutting backroom deals with the leading oligarchs to maintain the status quo. According to bne IntelliNews diplomatic sources. Kyiv has been told that it has used up its patience with the West and will end up being cut off from more help unless it gets its house in order.

If a deal is done then things could move quickly and a new government could be in place within a week, which could then unlock the next IMF tranche of money. 

"Rumour has it that on or before the 15th March a new Cabinet of Ministers will have been formed and the horsetrading, shuffling behind the curtain, and sorcery of the party 'Grey Cardinals/High Chamberlains' will have concluded," writes Nikolai Holmov, a well respected blogger on Ukrainian politics. 

Ukrainska Pravda reports that Jaresko is not the only candidate under consideration and that former Polish central bank Governor Leszek Balcerowicz is also a possible candidate to become prime minister.

A technocratic government led by either Jaresko or Balcerowicz would be seen as a big boon by international investors and donors who have almost given up on Ukraine’s prospects for recovery and change. However, given the strength of the oligarchic lobby and the lack of a political powerbase of either of these two candidates, the appointment of either would only mark the start of yet another attempt to put Ukraine’s reform effort on the straight and narrow. 

Poroshenko needs to find a fix that will turn on the international donor spigots again and the alternative would be fresh elections. But given his low rating in recent polls that is a solution he is trying to avoid at all costs.