Ukraine's Yanukovich eyes new PM and coalition

Ukraine's outgoing President Viktor Yushchenko listens during a news conference in Kiev February 16, 2010.

KIEV (Reuters) - Ukrainian President-elect Viktor Yanukovich named three candidates for the post of premier on Sunday and said he expected a coalition to replace the government of Yulia Tymoshenko to be formed soon.

Yanukovich's Regions Party needs to forge a new coalition in parliament to replace Tymoshenko as premier, and the nominee is key for the party to gain support from others. This may be why two of the candidates do not come from Regions' ranks.

Yanukovich named businessman Sergey Tigipko and former foreign minister Arseniy Yatsenyuk, as well as a member of his own party, former finance minister Mykola Azarov, as the most likely candidates.

"Today we can say that talks surround three figures. They are Tigipko, Yatsenyuk and Azarov," Yanukovich told the Ukraina television station in an interview. "We expect a result by the end of this coming week."

Tigipko, 50, and Yatsenyuk, 35, have presented themselves as pragmatists who would be able to undertake tough reforms as Ukraine reels from a deep economic crisis. Russian-born Azarov, 63, leans more toward Moscow and traditional state regulation.

As president, Yanukovich has no formal part in creating a coalition, but his party will be in talks with other factions in parliament to decide on a programme and new prime minister.

After a bitter election campaign, Yanukovich called for Tymoshenko to step down as his victory became clear. She instead challenged the election result in court, only to withdraw the case on Saturday, saying she could not trust the court.

"I think Tymoshenko understands well that there are no prospects for her to work as prime minister. I think she will take this step (to quit) herself," Yanukovich said in a second interview given to 1+1 channel.

"... It doesn't matter what the procedure is -- she will go either of her own accord or (by a vote of no confidence) in the parliament. But this will happen very soon," he said.

SNAP ELECTION?

Yanukovich wants to assemble a stable government that can focus on Ukraine's economic woes and bring back lending from the International Monetary Fund.

But Tymoshenko has refused to step down, and has accused Yanukovich's supporters of vote rigging.

Analysts say she will now focus on the fight against Yanukovich in parliament. If his supporters succeed in building a coalition, they could dismiss Tymoshenko through a vote of no confidence, paving the way for a new government.

If not, Yanukovich may be forced into calling a snap parliamentary election, an option investors fear because it would prolong instability.

"I think there is a basis for parliament to work until 2012. If parliamentarians are not wise enough then there will be a snap election, a new coalition, and life will go on. But I believe parliament will unite and will work," Yanukovich said.

Tymoshenko's decision on Saturday to drop her legal case paves the way for Yanukovich's inauguration on Thursday.

A Regions Party official said on Sunday the presidents of several countries including Bulgaria, Turkey, Poland, Latvia and Lithuania had confirmed they would attend, along with the EU foreign affairs and security chief, Catherine Ashton.

Tymoshenko still says Yanukovich did not win the election legitimately even though international observers gave the election the all-clear. Western governments have congratulated Yanukovich on his victory.

(Writing by Sabina Zawadzki; Editing by Kevin Liffey)