April 11, 2016 / 1:42 PM / 4 years ago

Top finance job still unclear in new Ukraine government

KIEV (Reuters) - Ukraine’s likely new prime minister Volodymyr Groysman said on Monday that coalition members were assembling a reform-minded cabinet to root out corruption and cronyism, but it was not yet settled who would take the crucial post of finance minister.

Ukrainian Parliament Speaker Volodymyr Groysman attends a parliament session in Kiev, Ukraine, March 29, 2016. REUTERS/Gleb Garanich

Prime Minister Arseny Yatseniuk, who has headed the government since the heady days of the 2014 pro-Europe “Maidan” uprising, tendered his resignation on Sunday culminating months of infighting.

That has delayed disbursement of billions of dollars in aid from the International Monetary Fund and Western backers as the economy continues to be weighed down by war with Russian-backed rebels in the east.

The two largest parties - President Petro Poroshenko’s BPP and Yatseniuk’s People’s Front - are expected to announce a new coalition agreement in the coming days with a rebooted government, headed by Groysman, a long-standing ally of Poroshenko.

The two parties are under pressure to end the deadlock and avert snap parliamentary elections. But with only a slender majority in parliament the new alliance may struggle to pass reform laws as populist former coalition allies have vowed to vote against IMF-backed austerity measures.

In Brussels, the head of the Council of Europe, a 47-member body which acts in an advisory role to the EU, said Ukraine had become “very volatile” since Yatseniuk resigned.

“It is urgent that they establish a new government and even more urgent that they speed up the reform process,” Thorbjoern Jagland told reporters.

Groysman said he would be willing to lead a government committed to rooting out corruption and sleaze that critics say undermine any reform drive in Ukraine.

But it was not clear if Finance Minister Natalia Yaresko, a U.S.-born technocrat who is respected in Washington, would keep her job - a lynchpin position given Ukraine’s strategic dealings with the IMF and other Western backers.

U.S. Vice President Joe Biden raised the issue of continuing economic reforms when he spoke to Yatseniuk on Sunday.

“The leaders agreed these changes must be irreversible and that continued progress is critical to securing a prosperous future for the people Ukraine,” the White House said in a statement.

“The leaders also agreed on the importance of assembling a new Cabinet committed to implementing needed reforms, in particular those recommended by the International Monetary Fund and European Union,” it said.

“If the coalition suggest I head the government, I would need the new government to have a core of people who have proved in recent times they lack political bias, are clean, and able to carry out reforms,” Groysman told journalists on Monday.

Groysman’s nomination and proposed government will have to be approved by a majority in parliament. But his appointment as prime minister would be a disappointment to some reformists, who say this would consolidate power in the hands of Poroshenko - with whom he is very close - and his inner circle.

“I’m not going to vote for Groysman (to be prime minister), because I don’t believe in his skills as a reformer ... and he’s too close to the president. There is a permanent risk of some conspiracy,” BPP lawmaker Serhiy Leshchenko said on channel Hromadske.

Former Slovak finance minister Ivan Miklos, currently an adviser to Finance Minister Yaresko, was reported to be in line to replace her - something that might have assured reformists and Ukraine’s allies that a technocrat would remain in charge of the country’s war-torn finances.

But a source in the Ukrainian parliament said Miklos would remain only as an adviser.

Groysman appeared to backtrack on earlier statements where he said Miklos would have a place in the cabinet. “There are a number of what I see as highly qualified candidates and I am insisting that all should be considered.”

Lawmakers said a new coalition agreement was likely to be announced in the coming days.

Writing by Alessandra Prentice; Editing by Richard Balmforth

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