Last updated: February 25, 2010 6:27 pm

Yanukovich sworn in as Ukraine president

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Viktor Yanukovich vowed to steer Ukraine on a course between Russia and the west as he was sworn in as Ukraine’s president on Thursday.

Speaking at his inauguration as successor to the pro-west Viktor Yushchenko, Mr Yanukovich described Ukraine as a “neutral European state” and pledged to pursue “the development of equal and mutually advantageous relations with Russia, the European Union, the US and other governments”.

His declaration marks the end of five years of unsuccessful efforts by Mr Yushchenko to pull Kiev out of Moscow’s orbit, align it closer with the US and the European Union, and join Nato.

Mr Yanukovich, whose first foreign trips next week will be to Brussels and Moscow, seems determined to revert to the east-west balance policies pursued by Ukraine before Mr Yushchenko took power in the 2004 Orange Revolution. He appointed as his chief of staff Sergiy Lyovochkin, a former senior aide to Leonid Kuchma, Mr Yushchenko’s authoritarian predecessor.

Mr Yanukovich also made clear that reviving Ukraine’s crisis-hit economy, which shrank 5 per cent last year, would be his top priority. Saying that the country faced “colossal debts, poverty, a collapsing economy [and] corruption”, he pledged to restore business confidence.

“What is needed for investors and international financial institutions to renew their trust in Ukraine is securing internal stability, overcoming corruption, restoring clear and, most importantly, constant rules of relations between the state and business.”

Mr Yanukovich, a former vehicle mechanic who climbed the Soviet and post-Soviet bureaucracy, tried to dispel fears he might push the state back into the economy, saying, “I am certain that direct interference by the state in the economy, its manual control, is a road to nowhere.”

He faces a test in renewing relations with the International Monetary Fund which suspended a $16.4bn rescue last year amid political confusion. The finance ministry said an IMF technical mission would arrive in April. This could lead to a resumption in the programme, which bankers say is vital to Ukraine’s economic stability. But the talks might be difficult: Mr Yanukovich’s Regions party promoted rises in the minimum wage that were the last straw for the IMF after Ukraine reneged on pledges to increase domestic gas prices.

The inauguration completes Mr Yanukovich’s political comeback more than five years after his 2004 campaign was condemned for electoral fraud in the Orange Revolution. He comes to office after Mr Yanukovich’s victory – Mr Yushchenko and Yulia Tymoshenko, the prime minister.

But Mr Yanukovich has yet to consolidate his position. He wants to oust Ms Tymoshenko by overturning her fragile parliamentary majority. She continues to cling to power and accuses Mr Yanukovich of pandering to Moscow’s interests by pursuing “anti-Ukrainian and anti-European policies”.

Mr Yanukovich has threatened to call snap parliamentary elections, with the aim of building a loyal coalition. But doing so could delay efforts to pull Ukraine out of recession.

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