VZCZCXRO0333
PP RUEHDBU RUEHIK RUEHLN RUEHPOD RUEHSK RUEHVK RUEHYG
DE RUEHKV #0295 0431418
ZNR UUUUU ZZH
P 121418Z FEB 09
FM AMEMBASSY KYIV
TO RUEHC/SECSTATE WASHDC PRIORITY 7266
INFO RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUCNCIS/CIS COLLECTIVE
RUEHZG/NATO EU COLLECTIVE

UNCLAS KYIV 000295 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR EUR/UMB, EEB/OMA 
 
E.O. 12958: N/A 
TAGS: EFIN ECON ETRD PREL PGOV XH UP
SUBJECT: UKRAINE FINANCE MINISTER RESIGNS 
 
REF: KYIV 227 
 
Sensitive but Unclassified.  Not for Internet or 
Distribution Outside the USG. 
 
¶1.  (SBU) Summary.  Ukraine's Finance Minister Viktor 
Pynzenyk abruptly resigned on February 12.  As announced on 
the Ministry of Finance website and confirmed by Pynzenyk's 
special assistant, Pynzenyk did not "see any sense" in 
staying on "without influence" in the government.  His 
assistant stated that Pynzenyk's professional views did not 
coincide with the GOU's economic policies, particularly on 
the budget.  Pynzenyk's replacement is due to be announced 
next week, in what many expect to be a broad reshuffling in 
the Cabinet.  End summary. 
 
¶2.  (SBU) Minister Pynzenyk announced the decision to quit 
his post on February 12, citing the fact that he had become 
"hostage to politics."  Pynzenyk's special assistant Ivan 
Yurik told us on February 12 that Pynzenyk did not "see any 
sense" in staying on in the government, as he had been 
isolated on an imposed "sick leave" since the leak of his 
classified note to PM Yulia Tymoshenko on the dire state of 
Ukraine's economy and finances (reftel).  The letter had 
caused a "scandal that the Minister never intended," 
according to Yurik, whereafter "Pynzenyk was used in 
political games." 
 
¶3.  (SBU) Even before the leaked letter was published on 
January 27, Pynzenyk had been on the sidelines of GOU anti- 
crisis decision-making.  Dating back to early December 
2008, the Minister and his assistant have told us 
repeatedly that Pynzenyk was cut out of dealings with the 
IMF on implementation of the Stand-By Agreement, on the 
Rada and Cabinet's budget deliberations, and on the GOU's 
efforts to devise mechanisms for bank recapitalization and 
liquidation. 
 
¶4.  (SBU) According to Yurik, there is a sense of relief in 
the Ministry.  Officials have been demoralized by their 
lack of a formal role in the government, without even a 
nominal "decision maker" to influence policy.  First Deputy 
(and now Acting) Finance Minister Igor Umansky had sought 
to avoid tough choices during the past two weeks, Yurik 
implied, delegating recent Ministry negotiations with the 
IMF to Yurik.  An imminent Cabinet reshuffle next week may 
yield an "unpredicatable" result, said Yurik. 
 
¶5.  (SBU) Comment.  The announcement of Pynzenyk's 
resignation comes as no surprise, given that the Minister 
had already been stripped of his authority.  With the 
release of his 24-page letter and his subsequent two week 
hospitalization, Pynzenyk's days were considered numbered 
by most Kyiv analysts.  Nonetheless, as his resignation 
announcement suggests, we have noted that Pynzenyk was 
"always guided by principles, such as a balanced budget." 
His drive to do the right thing, combined with an anxiety- 
driven temperament, may have been his undoing.  End 
comment. 
 
TAYLOR