* PM Azarov has sought to revive recession-hit economy
* Yanukovich may reinstate him on Dec. 12
* Central bank chief also seen as possible PM
By Olzhas Auyezov
KIEV, Dec 3 Ukrainian President Viktor
Yanukovich accepted the resignation of Prime Minister Mykola
Azarov's government on Monday, without indicating whether he
would re-appoint the long-time ally ahead of tough IMF loan
The move had been expected after several cabinet members
including Azarov were elected to parliament on Oct. 28,
something which obliges them to give up their ministerial roles.
Yanukovich told Azarov's government to stay on in an interim
capacity, according to a decree published on the presidential
website, and some commentators said he may keep the same team.
The 64-year-old Azarov has spent two and a half years trying
to revive the debt-ridden economy, but economic growth rates
have slowed this year as demand has shrunk for Ukraine's main
exports such as steel.
The pragmatic, dour Azarov has resisted IMF pressure to
carry out reforms such as raising the price of gas for
households, an unpopular move that would have rebounded on the
ruling Party of the Regions in the October election.
Yet he is seen by some as a safe pair of hands and many
commentators believe Yanukovich, who brought him in as prime
minister when he himself was elected in February 2010, might not
want to take a chance to appoint a new face just now.
"Yanukovich will not take risks and complicate things at a
time when the world economy is in crisis," said political
analyst Taras Berezovets.
Yanukovich's Regions party fell short of its own
expectations in the October vote, but still looks likely to be
able to pull together a majority in the next parliament, which
convenes for its first session on Dec. 12.
Central bank chief Serhiy Arbuzov, with whom Yanukovich is
personally close, has been mooted for some time as a possible
successor to Azarov.
SAFE PAIR OF HANDS
Azarov had indicated previously that he wanted to stay.
However, in a statement on Monday, he said he had held his "last
government meeting as prime minister". His spokesman said those
comments did not mean he was definitely leaving.
"Conclusions (that Azarov is not coming back for sure) are
incorrect," Azarov's spokesman Vitaly Lukyanenko told Reuters.
As acting prime minister, Azarov is still expected to lead
talks on a fresh lending agreement with an International
Monetary Fund mission due to arrive in Kiev on Dec. 7.
Whether or not he will keep his post thereafter will only
become certain when the new parliament meets on Dec. 12. Any
cabinet nominations by Yanukovich are widely expected to be
endorsed by parliament, given that the Regions believe they are
close to nailing down a majority.
If Arbuzov, who unlike Azarov has made no populist pledges
ahead of the October election - such as promising not to raise
gas prices - took over the talks with the IMF, it might be an
early indication of a planned reshuffle.
"We believe that the formation of the new cabinet (if led by
Arbuzov) may accelerate negotiations and ease the agreement with
the IMF," BNP Paribas analyst Julia Tsepliaeva said.
Ukraine says it hopes to use fresh IMF loans to repay $6.4
billion of its debt to the Fund falling due next year. The IMF,
in turn, insists that Kiev needs to raise gas and heating prices
for households to cut the growing budget deficit.
In addition to the IMF talks, Azarov has been at the
forefront of tough - and so far unsuccessful - negotiations with
Russia, Ukraine's main energy provider, to try to bring down the
cost of imported natural gas, which the government says is way
above market prices and a huge drain on the economy.