On January 18 the Ukrainian President Viktor Yanukovych fired the Minister of Finance Fedir Yaroshenko and immediately signed the order appointing the head of SBU [the Security Service of Ukraine. – Ed.] Valerii Khoroshkovsky the new minister of finance.
The head of government Mykola Azarov who has repeatedly supported Yaroshenko refused to comment on his resignation so far but promised to do it on Thursday, January 19 during the press conference. Experts predict that on Friday Azarov might make a demarche and resign since Yaroshenko was one of the last Azarov’s people in the government. Besides, without the loyal minister of finance the prime minister is like a waxwork. So, probably, Khoroshkovsky who entered the government through the chair of the minister of finance will shortly occupy the place in the middle of the table as the head of government.
Volodymyr FESENKO, political expert, director of the Center for Applied Political Studies “Penta”:
“Taking into consideration that Yaroshenko was Azarov’s person and the fact that he fought for Yaroshenko, Azarov’s resignation is very probable. However, it is rather his personal question. He has to decide whether he is going to make a demarche and resign or he is going to work for some period of time: several months till the government’s reconstruction planned for the spring or till the end of the year and resign after the parliamentary elections when the government will be systematically reconstructed.
“There are two reasons behind Yaroshenko’s resignation. The first one is the conflict concerning the state budget for 2012 that has been made public.
“The budget was severely criticized, especially by the first deputy head of the Presidential Administration Iryna Akimova, at the end of the last year and at the beginning of the current year during the meeting of the Committee for economic reforms. This conflict was a kind of trigger. However, there is the second reason, more systematic one: the struggle for the possibility to control the state finance and budgetary policy.
“It is known that Yaroshenko was attacked several times at his position last year. The pretenders for the position of the minister of finance were from different business-political groups, in particular Khoroshkovsky. However, taking into account the recent tendencies of strengthening the new business-political group called ‘the family’ the most likely candidate was Arbuzov’s first deputy Yurii Kolobov.
“However, Yanukovych’s order appointing Valerii Khoroshkovsky to the position of the minister of finance demonstrated that serious positions are not always given to the people close to the family. It should be noted that such a quick appointment proves that it was decided before Yaroshenko’s resignation. In other cases when there is no any ready-made decision Yanukovych usually takes a pause. In this case they first decided who will be the minister of finance and then the previous minister was fired. In all probability, Khoroshkovsky and his team have found serious business arguments how to fill the state treasury. Probably, it was the decisive argument together with the known influence of this group. Probably, Kolobov was not appointed because he is not experienced enough and the elections are coming and the budget has to be ready for the elections.
“It will be difficult for Azarov to work with Khoroshkovsky as the minister of finance. That is why the question whether Azarov will keep his position and how long he will stay there is getting more and more burning.”
Volodymyr LANOVY, president of the Center of Market Reforms, former minister of economy of Ukraine:
“Really, today the work of the ministry of finance can hardly be called efficient. The investments into the economy are not growing. The government does not fulfill its debt obligations in front of the government-financed organizations and exporters. The credit resource deficit in the real economy is growing. The NBU’s reserves are quickly decreasing. The balance of payments is running a deficit. Both domestic and foreign public bonds are not being sold and the market does not accept them. That is why funding of the state budget for 2012 is under the threat now. Briefly, there are a lot of problems showing that we are on the threshold of a financial crisis.
“However, the Ministry of Finance is not the one to blame. This is the result of the public policy in Ukraine and not the mistakes of the Ministry of Finance and Yaroshenko. The concentration and centralization of the public finance in the government’s hands and in the state banks, withdrawal of the credit resources form the commercial banks in order to fund the governmental projects, supporting the import without fulfilling the obligations in front of the exporters has been damaging the Ukrainian economy. However, the government prioritizes all of this. There will be no improvement in the state finance after Yaroshenko is fired. They have to change the government’s priorities and not a single person.”
