Ukraine PM nominee is close ally of President

KIEV (Reuters) - Ukraine's Mykola Azarov, who was appointed prime minister on Thursday, is an old ally of new President Viktor Yanukovich and served as a stop-gap acting premier during the 2004 Orange Revolution turmoil.

The 62-year-old Russian-born Azarov held the posts of finance minister and first deputy prime minister in Yanukovich's premierships from 2002-2005 and 2006-2007.

He was seen as a safe pair of hands when managing the state's finances during the 2004 political upheaval that overturned a flawed presidential election, when confidence in the hryvnia national currency was severely shaken.

He has a reputation as a cautious conservative rather than a reformer and few analysts expect him to undertake major reforms at his own initiative.

Still, his record as a past custodian of the state coffers will help him as steward of an embattled economy that has been propped up by a $16.4 billion International Monetary Fund (IMF) bail-out program.

An early task will be to push through the troubled 2010 budget in a shape that can convince the IMF to resume funding it suspended late last year because of breached promises.

Yanukovich has said he anticipates continued cooperation with the IMF, though he supports higher social spending on the minimum wage and pensions which prompted the IMF to suspend aid.

Replying to deputies' questions before he was voted into the post, Azarov said Ukraine's state coffers were empty. "The main task today is to redraft and get approved a realistic budget," he told parliament.

The new government would fulfill election promises to fight poverty, he said, but added: "If tough measures have to be taken, we will explain the need for them to people and we will push them through."

Azarov said he hoped the IMF would resume its suspended program. "We hope that this program will be broadened and will be reviewed taking into consideration realities in our country."

AUSTERE-LOOKING

An austere-looking, grey-haired man, Azarov moved from Russia to Ukraine only in 1984 and speaks Ukrainian poorly -- something which will not endear him to a strong nationalist community.

Analysts see him as a trusted lieutenant who can be relied on to work smoothly with Yanukovich without the kind of poisonous in-fighting that marked relations between ex-President Viktor Yushchenko and outgoing Prime Minister Yulia Tymoshenko.

Given his age and past credentials, he is unlikely to become a rival for Yanukovich's post in the future.

"Azarov suits Yanukovich completely -- he will execute his duties without having any political ambitions himself," said analyst Volodymyr Fesenko.

Azarov was born in December 1947 in Kaluga, Russia, and gained a doctorate in geology and mineralogy before moving to Ukraine in 1984 when it was still part of the Soviet Union.

He formed close ties with former President Leonid Kuchma -- Yanukovich's patron -- and served as head of the state tax administration for six years until 2002. He was also head of parliament's budgetary committee for a time.

As first deputy prime minister and finance minister from late November 2002, he undertook some tax reform, bringing the variable tax rate on personal income down to a uniform flat rate -- though his reforms largely stopped there.

In December 2004, amid uproar over Yanukovich's election in what was deemed a rigged presidential poll, he stepped in twice as acting premier when his patron was sent on leave, then forced to resign.

In his brief spell in office, he was credited with speaking out to calm investors' fears of a meltdown after dire warnings of financial collapse by then President Kuchma.