Ukraine's president offers Jaresko, Sadovyi for PM

Ukraine's president offers Jaresko, Sadovyi for PM
US-born Financier Natalie Jaresko was proposed with Lviv Mayor Andriy Sadovyi as PM choices.
By bne IntelliNews March 14, 2016

Ukrainian President Petro Poroshenko proposes forming a new government either headed by Finance Minister Natalie Jaresko or Lviv Mayor Andriy Sadovyi in order to end the current political crisis, presidential spokesman Svyatoslav Tsegolko said on March 14.

Poroshenko backs the creation of a technocratic government line-up led by Jaresko if all of the country's pro-European factions will unite behind it, the spokesman said in a statement posted on Facebook.

The second option offered by the president is to form a "political government" led by Sadovyi, but to the same effect, he added: "The goal of this government, like the previous one, is to speed up the pace of reforms," Tsegolko wrote.

However, he added that Poroshenko is also ready to work with any candidate offered by the parliamentary coalition.

"If the parliamentary forces have other candidates, let them put them forward them and find 226 votes [for the appointment of the prime minister] in parliament," the statement reads.

The announcement of Poroshenko's candidatures premier followed a statement on March 14 by Yuriy Lutsenko, the head of the president's Poroshenko Bloc in parliament, that the faction will immediately nominate its candidate for premier when Arseniy Yatsenyuk resigns.

"As soon as we receive a letter of resignation from the prime minister, we will nominate our candidate," Lutsenko said on March 14, according to the Bloc's media office, without naming anyone. "We have a nominee, a programme, and the votes [in the parliament]".

The manoeuvering follows four weeks of turmoil since a parliamentary bid to oust Yatsenyuk, intensified infighting, as well as resignations of reformist members of government in January over alleged rife corruption. The chaos prompted Ukraine's main funder, the International Monetary Fund (IMF), to block further releases of credits until the government is stabilised and the reform course reinvigorated.. 

In February, the Samopomich (Self-Reliance) party led by Sadovyi quit the ruling coalition, accusing the leadership of backroom dealing with the country's oligarchs to keep the unpopular Yatsenyuk in office. Former prime minister Yulia Tymoshenko then announced the exit of her Batkivshchyna (Fatherland) party over what she called the grip of a "shadow clan-political coalition" on Ukraine's politics.

Oleh Liashko's Radical Party already announced its exit the ruling coalition in September 2015, although the formal withdrawal of the faction's 21 MPs was left incomplete due to botched paperwork.

On March 9, Yatsenyuk officially offered to "resume the activity" of the ruling coalition with the participation of Samopomich and the Radical Party. "I hope that members of the parliamentary coalition, first of all the Radical Party and Samopomich, will decide on the resumption of the parliamentary coalition and further reforms in Ukraine," Yatsenyuk said.

The next day, Ukrainska Pravda online newspaper reported that Yatsenyuk had abandoned any intention to leave his post in order to enable the creation of a government of so-called technocrats headed by Jaresko.

Jaresko vs Sadovyi

Ukrainian media in recent days quoted sources as saying Yatsenyuk is ready to resign and the government will likely be headed by Jaresko, who has been at the centre of Ukraine's talks with the IMF and private creditors.

The US-born financier has consistently refused to confirm such negotiations and it remains unclear whether she would take the post. On March 8, the Financial Times reported that talks with the minister on the issue had stalled.

Meanwhile, Sadovyi's name was mentioned in this context for the first time. Samopomich secured around 11% of the votes during snap parliamentary elections in 2014 and became a member of the ruling coalition.

The 47-year-old Sadoviy is seen as a reformer but has much less political backing in the  Verkhovna Rada parliament, having only 26 deputies in the assembly. He has also not held a central government office before, although he is the mayor of Lviv, the largest city in western Ukraine.

The mayor's party includes young pro-Western activists and represents a new generation of politicians who could claim to be 'new blood' in the country of endemic corruption. Previously, Sadovyi has criticised Poroshenko and Yatsenyuk for fuelling high-level corruption.

"Jaresko is clearly the [International Financial Institutions'] and the market's favourite [choice], but likely lacks political capital in the Rada to secure her appointment – it might be difficult for her to win a confirmation vote," Tim Ash, head of emerging market strategy at the UK-based Nomura International, wrote in an email.

"A Sadoviy/Jaresko team would likely be well received by the markets, if Jaresko opts to stay and work under Sadoviy," Ash added. "That said, some of Sadoviy's own deputies were less than helpful late last year in trying to force through an aggressive tax cutting agenda against the best advice of the IFIs and Jaresko."


Meanwhile, another potential candidature for prime minister is parliamentary speaker Volodymyr Hroysman. However, political experts in Kyiv note that Ukraine's Western backers will be unlikely to support the choice of this member of Poroshenko's team in the interests of keeping a balance of power where no one political camp dominates key positions.

Oleksandr Turchynov, 51, head of the National Security Council and Ukraine's interim president before Poroshenko, is also among the names who may be invited to the post of the prime minister if negotiations with other politicians fail.

Possible alternatives include Odesa region governor and former Georgian president Mikheil Saakashvili. However, the politician seems to be more interested in the propect of snap elections and securing significant places in the Rada with the new pro-European political party he is creating.

Finally, Ukrainska Pravda reported earlier that Poroshenko had also considered a Polish economist and former chairman of Poland's central bank Leszek Balcerowicz as a choice for premier. According to media sources, Poroshenko's team have been talking to Balcerowicz since December 2015 but were unable to persuade him.