March 3, 2020 / 7:19 PM / a month ago

Ukrainian prime minister to exit in sweeping reshuffle

KIEV (Reuters) - Ukrainian Prime Minister Oleksiy Honcharuk has resigned and the finance minister, foreign minister and the prosecutor general could also exit in a sweeping reshuffle this week, lawmakers from President Volodymyr Zelenskiy’s party said on Tuesday.

Ukraine's Prime Minister Oleksiy Honcharuk speaks during a news conference in Kiev, Ukraine March 2, 2020. REUTERS/Valentyn Ogirenko

Zelenskiy has put forward Deputy Prime Minister Denys Shmygal to replace Honcharuk, lawmaker Galyna Yanchenko told reporters after a party meeting ahead of a special parliamentary session convened by the president on Wednesday.

Honcharuk’s office declined comment and Finance Minister Oksana Markarova’s office did not respond to a request for comment.

The reshuffle will put into the spotlight Ukraine’s commitment to reforms at a time when it is trying to finalise a new loan programme from the International Monetary Fund that is seen as crucial to economic stability and investor confidence.

Zelenskiy came to power in a landslide election victory last year as an actor and comedian with no prior political experience, promising to tackle corruption, implement reforms and curb the influence of oligarchs on politics.

But recent surveys suggest his government’s popularity has declined after patchy progress on a commitment to end the war against Russian-backed separatists in the eastern Donbass region, and to fight high-level graft.

The reshuffle points to the elevation of some establishment figures to higher levels of power. Shmygal used to work for DTEK, Ukraine’s largest energy group owned by the country’s richest man Rinat Akhmetov.

Markarova’s potential replacement, Ihor Umansky, became the acting finance minister in Prime Minister Yulia Tymoshenko’s government in 2009.

“Markarova’s exit is a big loss - and why?” said Tim Ash of BlueBay Asset Management. “Why replace a proven reformer?”

Lawmakers may also hold a no confidence vote in Prosecutor General Ruslan Ryaboshapka, whose progress on reforming the general prosecutor’s office was praised in a statement by the G7 group of ambassadors on Tuesday as reports of his possible exit gathered steam.

“The president and Shmygal presented the potential composition of the cabinet...We expect big changes,” Yanchenko said.

Honcharuk’s position has been under scrutiny since the leak in January of a recording that suggested he had made unflattering comments about Zelenskiy, though at the time the president said he would give the prime minister a second chance.

Honcharuk’s government has also tussled with Ihor Kolomoisky, one of Ukraine’s wealthiest tycoons who has been fighting to reverse the 2016 nationalisation of PrivatBank, the country’s largest lender, which he used to own.

In order to secure new IMF loans, the government has tried to pass a law on banking insolvency through parliament that would bar PrivatBank from returning to Kolomoisky.

Writing by Matthias Williams; Editing by Nick Zieminski/Mark Heinrich

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