Ukraine economy minister resigns citing stalled reforms

Ukraine's Lithuanian-born Economy Minister Aivaras Abromavicius abruptly submitted his resignation Wednesday citing his inability to push through vital restructuring measures essential to getting growth in the cash-strapped country on track.

The shock decision layed bare the sharp divisions with pro-Western President Petro Poroshenko's government and the difficulties the ex-Soviet nation faces in coming through with the changes needed to fulfil its ambition of joining the EU.

"Today, I made the decision to submit by resignation from the post of minister of Ukraine's economic development and trade," Abromavicius told reporters in Kiev.

"The reason is the sharp escalation in efforts to block systemic and important reforms."

Abromavicius and Ukraine's US-born Finance Minister Natalie Jaresko were both appointed in December 2014 as part of Poroshenko's efforts to infuse fresh blood into the war-shattered country's attempts to return to growth.

Kiev's US Ambassador Geoffrey Pyatt tweeted moments after the announcement that Abromavicius was "one of the Ukrainian government's great champions of reform...and a believer in the future Ukraine's people deserve."

The resignation comes in the midst of growing parliamentary displeasure with Poroshenko's government and infighting between various political interests that are tied to powerful business tycoons.

Abromavicius said some political forces were "taking steps aimed at paralysing our reforms".

He further accused unidentified but influential people of "trying to establish control over financial resources -- first and foremost those of the Naftogaz (state oil and energy company) and the defence industry."

"I refuse to work in such a system," the 40-year-old former banker said.

"I and my team are not ready to provide cover for the restoration of old -- and the creation of new -- schemes (built) in the interests of particular political and business players."

The graft-riven country of about 40 million has been one of Europe's worst economic performers since winning independence in 1991.

A January report by Transparency International showed Ukraine occupying 130th out of 167 places on its Corruption Perceptions Index for 2015.

Initial government estimates show Ukraine's economy shrinking by 10.4 percent of gross domestic product last year.

Abromavicius's resignation must still be approved by parliament.

Poroshenko himself made no initial comment about one of his most important minister's sudden move.

- Bitter rivalries -

Some of Kiev's more acrimonious battles have been waged between billionaires linked to Poroshenko and those of Prime Minister Arseniy Yatsenyuk -- a hawkish leader who delivered passionate speeches atop barricades during Ukraine's 2014 pro-Western revolt.

Yatsenyuk and Poroshenko were seen as allies in the heady days that followed Urkaine's break from Russia's historic embrace.

But bitter rivalries have since surfaced and Yatsenyuk's own place in the government no longer suits some of the more outspoken members of the president's team.

Mikheil Saakashvili --- a former Georgian president who fought a brief 2008 war with Russia and currently serves as governor of Ukraine's historic Odessa region -- said he spoke to Abromavicius on Tuesday and knew that something was wrong.

"I had a long talk with Aivaras Abromavicius and he told me lots of interesting things," Saakashvili wrote on Facebook.

"Aivaras and I both work on the council of state enterprise reforms," the close Poroshenko supporter continued.

"And I would like to confirm that all our initiatives aimed at changing the leaders of state enterprises are being block personally by the prime minister at the suggestion of Igor Kononenko," Saakashvili claimed.

Kononenko serves as deputy head of Poroshenko's parliamentary party and is known in the Ukrainian media as a "grey cardinal" who implements the president's political will.

His alleged ties to the prime minister underscore the complexities of Ukraine's shacky ruling elite.