Finance Minister Oleksandr Danylyuk struck a defiant tone at a May 31 conference amid pressure for his ouster, saying “I will not resign.”
Danylyuk added that it would be up to the Verkhovna Rada to remove him.
The comments come one day after a copy of a letter from Danylyuk to the G7 ambassadors was leaked to Ukrainian media in which the outgoing Finance Minister sharply criticized Prime Minister Volodymyr Groysman.
“The situation with the State Fiscal Service is deteriorating — corruption, vested interests are increasing,” the letter reads. “I do not accept when the appointments of my deputies have to be agreed [between the prime minister] and president.”
At a May 31 forum with business community representatives, Danylyuk admitted to authoring the letter.
“All other possibilities were exhausted,” he said.
Danylyuk, a favorite of Ukraine’s Western backers, has been batting efforts to have him sacked for much of his two-year tenure as finance minister.
An initiative to simplify the country’s value-added tax refund system ran into sabotage efforts from vested interests in parliament that profit from fraudulent refunds. Recent weeks have seen tensions between Danylyuk and Groysman come to a head over attempts to bring the country’s State Fiscal Service under direct control of the ministry, with the prime minister denying Danylyuk a personnel appointment to oversee the tax collection agency.
Last week, Groysman removed Danylyuk’s control over the tax collector, transferring jurisdiction to the Cabinet of Ministers.
“This decision is illegal and will never be published,” Danylyuk said.
The finance minister sent the letter to the G7 ambassadors immediately after the episode with Groysman.
“I reached the limit in looking for compromises,” the letter reads.
One foreign diplomat in Kyiv, speaking on condition of anonymity due to lack of authorization to speak publicly, said that the minister’s removal could come as early as next week.
His removal would come as another blow to Ukraine’s stalled four year-old, $17.5 billion assistance program with the International Monetary Fund, which is demanding adoption of anti-corruption court legislation and a hike in natural gas prices to market levels as a condition for re-starting loans on the remaining half of the credit line.
Danylyuk’s image as a reformer came in part because of loudly publicized battles with his counterparts in government. He spent months modernizing Ukraine’s VAT refund system, and still claims to be beating back efforts at rolling back the changes, saying that he “senses signals from business that such threats exist.”
The minister also demanded Prosecutor General Yuriy Lutsenko’s resignation in December, accusing Lutsenko trying to thwart an investigation into $5.6 billion stolen at PrivatBank.
The Finance Ministry has supported a lawsuit filed by PrivatBank against its former owners Ihor Kolomoisky and Gennady Boholyubov in London. More than $2.5 billion in assets of the two oligarchs have been frozen in the suit, which remains the only real measure at accountability in the massive embezzlement scandal.
Other initiatives have been blocked, including an effort to create a Financial Investigations Service. That body would unite and professionalize Ukraine’s white collar criminal investigations capability, with the stated aim of putting an end to the practice of law enforcement shaking down businesses for bribes.
A version of the law drafted by the Finance Ministry was registered in the Rada in January, with no action taken since. Instead, a version pushed by former Roshen accountant and Bloc Petro Poroshenko MP Nina Yuzhanina has gained traction amid concerns that it will increase pressure on Ukrainian businesses.
At the May 31 meeting, Danylyuk alternated between boasting about his accomplishments and striking a bitter tone about the opposition he faced.
“I had an open conflict with then-SFS Chief (Roman) Nasirov,” Danylyuk said. “These old schemes, as everyone knows, are covered by those in parliament.”
