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Ukraine: why Volodymyr Zelensky is pursuing a disruptive agenda
21 October 2019, 17:30
author: Alyona Getmanchuk

Comment by Alyona Getmanchuk for Financial Times.

Mr Zelensky’s stance on PrivatBank remains ambiguous. Mr Honcharuk suggested last month that the president and his chief of staff were ready to compromise with Mr Kolomoisky, although he subsequently said he had been misinterpreted.

Fears that the president and Mr Bogdan were about to cave into Mr Kolomoisky triggered the resignation in late September of Oleksandr Danylyuk, a former finance minister and respected reformer, as the head of Mr Zelensky’s National Security and Defence Council.

Mr Zelensky said on October 10 that “it makes sense to talk to him [Kolomoisky]” but he should not expect to receive a *single kopek” from any deal.

“He needs to wake up quick,” says Tim Ash, an emerging markets strategist at BlueBay Asset Management. “This is bigger than his mate Kolomoisky. His decision will set the course of his presidency. Either he is in the pockets of the oligarchs, or certain oligarchs, or he is truly representing the interests of the people.”

One western official says a planned overhaul of the electricity market might be a way for Mr Kolomoisky, who owns ferro alloy plants, to pay less for power than the prices he is currently charged by rival oligarchs. “Kolomoisky wants to be sitting on high and pulling strings behind the scenes,” the official says. “It’s very smart what they are doing.”

But Kateryna Rozhkova, deputy governor of the central bank, says that “if [PrivatBank’s] nationalisation is cancelled it would be a bright red warning signal for reformers, investors, IFIs and donors”.

She is urging Mr Zelensky and his government to issue an unequivocal statement saying the PrivatBank nationalisation was necessary to preserve financial stability, that it complied with Ukrainian law and that banks cannot be returned to their shareholders even if they have a right to claim compensation for losses, if they can prove them.

Even before the Trump imbroglio, Mr Zelensky’s young presidency was a story of reformist idealism marred by suspicion that the new generation could be yet another political vehicle for corporate capture of the state.

Ms Rozhkova, whose eyes well up when describing the intimidation of her former colleague Ms Gontareva, wants to accentuate the positive. “We need to talk about not just the dark side of the moon,” she says, “but the light side too.”

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