Yatsenyuk Warns of War as He Is Voted Ukraine’s Premier
Arseniy Yatsenyuk received
lawmakers’ approval to stay on as Ukraine’s prime minister,
clearing an obstacle to continue aid talks with the
International Monetary Fund as the country grapples with the
conflict in its east.
Yatsenyuk, 40, was backed by 341 lawmakers in the 450-seat
legislature today, the result of an alliance between five pro-European parties after elections on Oct. 26. The coalition is
supported by 302 lawmakers.
“Our country is at war. People are in trouble,” Yatsenyuk
told legislators before the vote. “It depends on us whether we
can stop the external aggression from Russia.”
Ukraine is struggling with the deepest recession since 2009
as the military conflict with pro-Russian militants in the
eastern Donetsk and Luhansk regions disrupts production in its
industrial heartland. The government is seeking to draw $2.8
billion from a $17 billion IMF loan by year-end to stabilize an
economy ravaged by the insurgency, a 45 percent slump in the
hryvnia and central bank reserves plunging to the lowest level
in almost a decade.
The Washington-based lender ended a two-week mission Nov.
25. IMF representatives will return to discuss disbursements
once a government is formed, central bank Governor Valeriya Gontareva said this week.
Difficult Year
The yield on Ukraine’s bonds due 2017 were little changed
at 19.34 percent after falling to an all-time low yesterday of
19.52 percent, data compiled by Bloomberg shows.
“Now there is a proposal to form the cabinet quickly,”
Yatsenyuk said. “2015 will be more difficult than 2014. Let’s
start working.”
Ukraine’s parliament will approve the whole cabinet on Dec.
2, Parliamentary Speaker Volodymyr Hroisman said after the vote.
The country must prepare for a long struggle to defeat the
military threat it faces, President Petro Poroshenko told
legislators at the opening session. There was no choice but to
“militarize society to some extent” by raising defense
spending, retaining conscription and restoring army training in
schools, he said.
Ukrainian will be the country’s sole official language, the
president said, a decision that risks intensifying complaints by
Russian-speaking separatists in the east that their interests
are ignored by the government in Kyiv.
Presidents Speak
Poroshenko and Russian President Vladimir Putin spoke to
each other about the conflict in a phone call yesterday. They
had “a constructive talk,” Iryna Friz, Poroshenko’s former
spokeswoman, who is now a member of parliament, said today. The
presidents discussed the situation in southeast Ukraine,
according to a Kremlin statement. The two presidents last spoke
on Oct. 31, according to their websites.
As the EU announced toughened penalties against Ukrainian
separatists today, with travel bans and asset freezes against 13
people and five organizations, German Foreign Minister Frank-Walter Steinmeier said that his country did not want to wreck
Russia’s economy with sanctions imposed over the conflict.
“An economically isolated Russia, one that may face
collapse, would not help improve security in Europe or in
Ukraine, but would pose a danger to itself and others,”
Steinmeier said in a speech in Berlin today. EU officials who
seek to ratchet up sanctions because they are having an effect
suffer a “dangerous misunderstanding,” he said.
Long Confrontation
The conflict in Ukraine “won’t be over tomorrow or the day
after tomorrow,” Steinmeier said. The door to talks remains
open and Germany can’t declare Russia, its “rather large
neighbor,” a friend or enemy, he said.
His words echo a warning from German Chancellor Angela Merkel that she was prepared for a long confrontation with
Russia, saying its actions threaten “the peaceful international
order and breach international law.”
“We need patience and staying power to overcome the
crisis,” Merkel said in a speech to parliament in Berlin
yesterday. Economic sanctions on Russia “remain unavoidable”
as a Sept. 5 cease-fire in eastern Ukraine fails to hold, she
said, and the EU needs unity to confront it.
Russia poses “no threat to anyone” and is intent on
avoiding “geopolitical games, intrigues and especially
conflicts, no matter how much someone would want to drag us
in,” Putin said at a meeting with military commanders yesterday
in Sochi, Russia. “It’s necessary to reliably protect Russia’s
sovereignty and integrity and the security of our allies.”
Kamikaze Premier
Ukraine needs as much as $13 billion in additional IMF aid
to halt the collapse of confidence in the hryvnia and prop up
the banking industry, Tim Ash, chief emerging markets economist
at Standard Bank Group Ltd. (STAN), said Nov. 18.
Yatsenyuk became premier after three months of deadly
protests toppled pro-Russian President Viktor Yanukovych in
February. He then described his government as being on a
kamikaze mission of “unpopular reforms” to meet the IMF’s
terms amid what he called a “war with Russia.” Russia, which
denies military involvement in its neighbor’s conflict, cut
natural gas supplies in June over pricing and debt disputes.
“I hope for people’s support, for that support which we
had during this year,” Yatsenyuk said. “I hope the new
government will be effective, the new parliament will be
responsible and we’ll have cooperation with the president.”
To contact the reporters on this story:
Daryna Krasnolutska in Kyiv at
dkrasnolutsk@bloomberg.net;
Kateryna Choursina in Kyiv at
kchoursina@bloomberg.net;
Brian Parkin in Berlin at
bparkin@bloomberg.net
To contact the editors responsible for this story:
James M. Gomez at
jagomez@bloomberg.net
Tony Halpin, Michael Winfrey