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Ukraine ministers pledge corruption fight to win aid

Top Ukraine ministers vowed Tuesday to root out graft in what they called the most corrupt country in Europe to meet the demands made by international partners before they stump up more aid.

Finance Minister Natalie Jaresko and Economy Minister Aivaras Abromavicius told AFP in an interview that Kiev wanted a clear break with the past and to radically reduce the role of the state.

The International Monetary Fund, European Union and United States have pledged large amounts of aid to help Ukraine as it fights Russian-backed rebels in the east but they also demand that Kiev ends the corruption that has bedevilled the country for years.

“Ukraine is the most corrupt country in Europe and we must lift ourselves out of this,” Abromavicius said, describing his own ministry as a bureaucratic “monster” that needed to be broken up or closed down.

“We don’t have a choice, we need to be credible very quickly,” added Jaresko, a US citizen who once worked in the State Department. “We need the support of our international partners.”

Ukraine was plunged into crisis in November 2013 when then pro-Russian president Viktor Yanukoyvch backed out of an association agreement with the EU under pressure from the Kremlin.

The decision sparked huge pro-EU demonstrations against Yanukovych who fled to Russia in February after what Moscow termed a Western-backed “coup” in Kiev.

Since then Russia has annexed Crimea and Kiev has battled pro-Moscow separatists in the east in a conflict which has cost more than 4,600 lives and displaced more than a million people.

The European Union has offered Ukraine about 1.6 billion euros ($2 billion) in short-term assistance and put together a wider package worth about 11 billion euros.

The IMF has given Kiev about $17 billion and has estimated it probably needs another $15 billion in immediate funding as the economy continues to shrink.

– ‘Changing the system’ –

The two ministers declined to say how much money they thought Ukraine needed or with how much urgency.

Prime Minister Arseniy Yatsenyuk said Monday — after the first meeting of a landmark association council with the EU in Brussels — that Ukraine needed the money “yesterday”.

Once ruled from Moscow as part of the Soviet Union, Ukraine has a pervasive bureaucracy that creates countless opportunities for officials to abuse the system, choking off enterprise, said Abromavicius, the economy minister.

“We are changing the system. That means radical reforms to take the country out of this difficult position,” Abromavicius said.

One immediate step would be to clean up public tenders for public works, a notoriously corrupt process, and to make sure state-owned companies contribute to government coffers, he added.

Asked about the reforms’ likely cost in higher unemployment and social strains, Abromavicius said “everyone recognises” the need for change.

East Europeans “could accept more hardship because of their historical experience,” he said, recalling his Lithuanian origins and the region’s troubled history of domination by Russia.

“In Ukraine many think we have a last chance — if there are no reforms now to strengthen our economy, then our sovereignty is at stake.”

President Petro Poroshenko made Jaresko and Abromavicius Ukrainian citizens when he appointed them to the government earlier this month in a clear attempt to bolster Kiev’s anti-corruption credentials.

Jaresko is an ethnic Ukrainian who co-founded Horizon Capital, an investment fund focused on eastern Europe, and has lived in the country for more than 20 years.

She went to Harvard University’s Kennedy School of Government and took an active part in the pro-EU protests that brought Yanukovych down.

Abromavicius was an investment banker in his native Lithuania.