Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Ukraine's New Finance Head Seeks Reform

KIEV -- Ukraine's Finance Minister Hrihory Pyatachenko, criticized abroad for sluggish market reforms, was replaced Wednesday by Petro Hermanchuk, who immediately called for an overhaul of the budget and tax system. Sources close to the government said Pyatachenko had tendered his resignation last week after talks with Prime Minister Vitaly Masol. He quit just over a week before Sunday's second round of Ukraine's presidential elections. Parliament approved Hermanchuk's appointment, proposed by President Leonid Kravchuk, by 222 votes to 28. "We need to concentrate our efforts on forming a budget policy and start straightaway on the 1995 budget," he told the chamber before being approved. "We need gradually to lower tax thresholds while cutting government expenditure and improving our system of tax breaks and the use of foreign credits. Setting tax rates too high has made production unprofitable." Pyatachenko had been finance minister since 1990, a year before the collapse of the Soviet Union and the advent of Ukrainian independence. During his time in office, the economy has contracted sharply. First quarter industrial production was nearly 40 percent below levels in the same period of 1993. Living standards have gone into freefall, though monthly inflation has been cut from 90 percent last December to about 5 percent last month. Three post-Soviet governments have failed to approve a comprehensive program of reforms as in neighboring Russia. Kravchuk has said during the election campaign that there would be no major shifts in economic policy if voters return him to office Sunday. But he announced major cabinet changes last week, putting his stamp on government in the final stages of an election campaign he is far from certain of winning. He replaced two deputy prime ministers, responsible for agriculture and foreign trade and currency regulation. He left the latter post vacant, leaving himself room for maneuver in post-election appointments. Hermanchuk had worked in the Finance Ministry since 1990 and took over the post of first deputy minister last year. He has a typical background in Soviet economics, having worked at a major Kiev machine plant factory and in local administration.