Feud Between Ukrainian PM and Finance Minister Reaches Boiling Point
6 June, 2018

The Ukrainian Prime Minister Volodymyr Groysman has signed a motion to dismiss Finance Minister Oleksandr Danylyuk from his post. His dismissal now has to be supported by the parliament.

This decision to oust Danylyuk was taken at a Cabinet meeting on June 6.

Danylyuk’s dismissal occurred when tensions came to a head between himself and the PM, caused by Groysman’s refusal to appoint Danylyuk’s choice for deputy minister.

In turn, Danylyuk accused the PM of favoring pro-Poroshenko candidates.

Danylyuk had also written a letter to the ambassadors of G7 countries concerning the conflict within the Ukrainian government –  a move Groysman regards as misconduct.

“Unfortunately, Oleksandr Danylyuk did not adjust his line of behavior, even after discussing the situation with members of the governmental team. Therefore, I see no possibility for him to continue to be a part of it and I ask the members of parliament to support my request,” Groysman stated.   

Shortly after, Danylyuk left the Cabinet meeting and the government made a number of decisions relating to the Ministry of Finance in his absence.

In particular, it was decided in the closed meeting that the State Fiscal Service would be placed under the control of the Cabinet, excluding the Ministry of Finance from the list of departments with which they should coordinate when making decisions.

Danylyuk has called these government decisions illegal and stated that he will challenge them once they’ve been published.

The Finance Minister seems to be refusing to go without a fight, taking to Facebook to air his grievances. On June 6, Danylyuk posted:

“I have been under colossal pressure over the past year. They have demanded that I support the ‘subvention on socio-economic development of the regions’ program. Translated into layman’s terms, that means handing over money to the MP-majoritarians. This is political corruption,” adding that he had been faced with a decision: “leave or become an accomplice.”

The fallout from the feud between the two high-ranking politicians could be detrimental to Ukraine. In particular Ukraine’s relationships with the International Monetary, European Union and the financial assistance they provide.

Danylyuk has cultivated a reputation among Western institutions as a forward-thinking reformer. This reformist image can be partly attributed to Danylyuk’s previous clashes with fellow politicians over key reforms – including plans for a Financial Investigations Service and attempts to modernize the VAT tax refund system.

Danylyuk also supported the lawsuit filed by Privat Bank, which was nationalized in 2016, against oligarchs Ihor Kolomoysky and Gennady Boholyubov for embezzlement. The Finance Minister accused Prosecutor General Yuriy Lutsenko of attempting to thwart the case and even called for Lutsenko’s resignation.

On Thursday, the Ukrainian parliament will vote on legislation concerning the creation of an anti-corruption court – a key provision for securing the next tranche of the $17.5 billion IMF bailout. Groysman has threatened to resign if the vote fails.