Ukraine’s Yanukovich gets close ally as PM

KIEV, Thursday

Ukraine’s new prime minister Mykola Azarov, declaring state coffers were empty, promised on Thursday to meet all obligations to the International Monetary Fund and push through a realistic 2010 budget.

President Viktor Yanukovich has moved swiftly to consolidate power since his election last month to end years of dysfunctional government and economic backsliding under the leaders of the 2004 Orange Revolution.

Has been plundered

“The country has been plundered, the coffers are empty, state debt has risen threefold,” Mr Azarov, a former finance minister and a close Yanukovich ally, told parliament shortly before deputies confirmed his appointment.

Battered by the economic downturn, Ukraine needs to adopt a 2010 budget and restart talks with the International Monetary Fund on a suspended $16.4 billion bail-out package.

Azarov said he would invite the IMF to visit the country ‘as soon as possible’ and pledged to redraft and get approval for a realistic version of the much-delayed budget.

The IMF will watch closely how Ukraine handles the budget after a series of spending blowouts, backed by Yanukovich’s Regions Party, derailed the bail-out package.

The IMF held back a $3.5 billion tranche expected last November after parliament increased minimum wages and pensions by up to 10 per cent.

Azarov said he hoped the IMF would resume lending, but added: “We hope that this programme will be broadened and will be reviewed, taking into consideration realities in our country.”

He said Ukraine had to repay 44 billion hryvnias ($5.5 billion) in domestic debt by the end of the year, a challenge he described as very serious.

Mr Azarov is seen as a safe pair of hands but no radical reformer. He gives Mr Yanukovich a reliable ruling partner afer the infighting that split the alliance that emerged from the Orange Revolution.

Mr Yanukovich needed a new ruling coalition to avoid calling a snap parliamentary election.