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. Last Updated: 07/27/2016

Kuchma Fires Reformist Minister

KIEV — Ukrainian President Leonid Kuchma has sacked Deputy Prime Minister Yulia Tymoshenko, a key member of the pro-reform government who had been indicted on criminal charges, raising doubts about efforts to restructure the country’s economy.

Tymoshenko, 40, whose ministerial brief was to clean up the corrupt energy sector, was indicted last week on charges of smuggling and forgery during her time as head of a gas trading firm in the mid-1990s.

Ihor Storozhuk, head of Kuchma’s information department, confirmed Friday that Tymoshenko had been sacked following a request by prosecutors that she be suspended. "The decree was issued due to the criminal charges against Tymoshenko," he said.

She has denied the accusations and said they are the result of her work, upsetting the interests of powerful businessmen, known as oligarchs, who are close to Kuchma. The president has launched frequent and bitter public attacks against her.

Tymoshenko was an ally of Prime Minister Viktor Yushchenko, whose reform-minded government persuaded the International Monetary Fund to resume a frozen $2.6 billion loan program last December after more than a year’s stoppage.

"This is clearly a political crisis," said Al Breach, an economist at Goldman Sachs based in Moscow. "But progress on reform is more dependent on Yushchenko than Tymoshenko."

Tymoshenko on Saturday launched a stinging attack against Kuchma in an interview published in Zerkalo Nedeli newspaper, accusing the president of ignoring the constitution and saying her dismissal marked "liberation day" for the country’s powerful businessmen.

"Irrespective of where I am — in prison, or at liberty — I will now, once and for all, go over to the opposition against the current regime," she told the paper.

Tymoshenko heads the Batkivshchyna party, which controls 31 of 450 seats in parliament and has been a crucial bloc in passing reformist legislation.

Kuchma’s spokesman, accompanying the president on a trip to Berlin, said the prime minister’s job was safe and quoted the president as saying Yushchenko would have a say in choosing Tymoshenko’s replacement. "Of course there is no question of Yushchenko’s leaving office," spokesman Olexander Martynenko said.

The IMF’s senior representative in Kiev, Henri Ghesquiere, praised Tymoshenko’s track record as a minister for improving cash over barter payments in the energy industry. He said the IMF hoped the government would push ahead with reforms.

"We are convinced that the government will make it its top priority to continue and even strengthen the positive steps that were taken in this area [energy sector reform] last year for the first time since independence," he told a news conference. A mission from the IMF is due in Kiev next week to discuss the planned disbursement of a $190 million loan in March.

Barter trading in Ukraine’s energy sector, thought to be worth hundreds of millions of dollars a year, is widely thought to be hiding corrupt practices, including the funneling of large amounts of money out of Ukraine.