Ukraine: the government resignation - and substantial reshuffle ahead
In Ukraine, the president accepted the resignation of PM Azarov, which means resignation of his cabinet. This event was very expected and following to the parliamentary elections. However, now we expect quite substantial reshuffle of the cabinet and new figures to be recruited to the government. First of all, it was widely announced that the ministers who were elected to the Rada are planning to work there. This implicitly means that politically charismatic ministers such as Vice PM Sergei Tigipko, the minister of justice Alexander Lavrinovich, minister of economy Petr Poroshenko, minister of emergency Victor Baloga, minister of transportation Boris Kolesnikov, minister of regions Anatoly Blyznyuk and minister of sport Dmitry Tabachnik are likely to become a new parlament deputies.
We expect further consolidation of authority in hands of President Yanukovich and his allies. The formation of a new cabinet is likely to become a new step for this consolidation. We see Mr Sergei Arbuzov (currently, the Chairman of the NBU) to be the most likely candidate for PM position. We also see strong chances of Ms Irina Akimova ( currently at high position in the president administration office) and Andrey Klyuev ( currently, the secretary of the national defence council) to win this position too. Anyway, we expect his cabinet to become more technical and loyal to the president.
Although such political consolidation has some negative shade in the region (in particularly, analysing historical examples and parallels), we see fruitful potential for economic development. We believe that the formation of the new cabinet may accelerate negotiations and ease the agreement with the IMF. We expect new PM figure to be friendly for financial market (i.e. for negotiation with the IMF). We strongly believe that this positive outcome will be more than outweighing political risks in the medium and long run.
Julia Tsepliaeva
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