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09KYIV311, TIGIPKO TAPPED UKRAINE CRISIS COORDINATOR

February 13, 2009

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Reference ID Created Released Classification Origin
09KYIV311 2009-02-13 14:33 2011-08-30 01:44 CONFIDENTIAL Embassy Kyiv

VZCZCXRO1788
PP RUEHDBU
DE RUEHKV #0311/01 0441433
ZNY CCCCC ZZH
P 131433Z FEB 09
FM AMEMBASSY KYIV
TO RUEHC/SECSTATE WASHDC PRIORITY 7292
INFO RUCNCIS/CIS COLLECTIVE PRIORITY
RUEHZG/NATO EU COLLECTIVE PRIORITY
RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC PRIORITY
RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC PRIORITY

C O N F I D E N T I A L SECTION 01 OF 02 KYIV 000311 
 
SIPDIS 
 
DEPT FOR EUR, EUR/UMB, EEB/OMA 
 
E.O. 12958: DECL: 02/13/2019 
TAGS: EFIN EREL ETRD PGOV PREL XH UP
SUBJECT: TIGIPKO TAPPED UKRAINE CRISIS COORDINATOR 
 
REF: A. KYIV 250 
     B. KYIV 295 
 
Classified By: AMBASSADOR WILLIAM B. TAYLOR, REASONS 1.4 (B) AND (D) 
 
1.  (C) Summary.  Sergey Tigipko told the Ambassador on 
February 11 that he has accepted a position as PM Yulia 
Tymoshenko's Deputy Prime Minister for economic affairs. 
Tigipko's daunting task will be to coordinate the GOU's 
anti-crisis efforts, reaching across political divides that 
have thus far stalled any harmonized approach.  Tigipko was 
precise in his description of a "discredited" President 
Yushchenko and a "deficient" Tymoshenko, leaders who 
nonetheless need to jointly develop and implement a 
strategy that would utilize Ukraine's "best (human) 
resources."  While cautious about the feasibility of real 
economic restructuring, given weak leadership at the 
National Bank of Ukraine (NBU) and the Ministry of Finance 
and impending presidential elections (planned for early 
2010), Tigipko described the need to fulfill IMF 
expectations for pension reform and fiscal belt tightening. 
Tigipko is traveling on February 13 and not able to comment 
on rumors that he may succeed Viktor Pynzenyk, who abruptly 
resigned on February 12 as Finance Minister.  End comment. 
 
2.  (C) Tigipko told the Ambassador on February 11 that he 
has accepted Yulia Tymoshenko's proposal to move from his 
position as Chairman of Swedbank/Ukraine for one year, 
taking on the role of DPM for economic affairs "without 
liabilities or desires to go further in politics."  Tigipko 
will join the government because efforts to combat 
Ukraine's severe crisis remain "without a single strategy." 
The GOU also lacks capacity right now, he said.  What it 
"needs most is a banking expert, since everything is at 
stake in the financial sphere."  Tigipko was previously NBU 
Governor (2002-2004) and founder of the TAS banking group, 
sold to Sweden's Swedbank in 2007 for over $1 billion. (Ref 
A). 
 
3.  (C) Laying out a plan to create working groups on bank 
stabilization, business support, deregulation, and fiscal 
policy, Tigipko vowed to engage all interested parties, 
specifically mentioning the NBU, the PM's office, the 
Ministry of Finance, the Rada, and the Presidential 
Administration.  His method would be collaborative, he 
said, emphasizing joint brainstorming sessions so that 
every stakeholder can ultimately say the "chosen strategy 
is his."  This type of organizational structure and 
philosophy is consistent with proposals from the IMF, which 
has been informed of Tigipko's possible elevation as DPM 
and economic coordinator.  (Note: The IMF has agreed to pay 
staff costs for the economic coordinator's office.  End 
note.) 
 
4.  (C) Tigipko cautioned that implementing an anti-crisis 
strategy, especially pension reform, would occur only after 
the presidential elections.  His coordinating group will 
nonetheless prepare near-term "compromises" on the budget 
and banking sector to satisfy the IMF, while honing in on 
longer-term objectives that are now too politically 
decisive to fully embrace.  The main task is to stabilize 
unemployment, the exchange rate, and bank depositor 
anxiety.  "The banking sector is especially miserable," he 
said. 
 
5.  (C) Tigipko had few words of praise for Ukraine's 
current leadership.  He suggested to the Ambassador that a 
"discredited" President Yushchenko and a "deficient" 
Tymoshenko needed to come together, at least out of the 
public eye, to forge a compromise over the country's anti- 
crisis measures.  Critical also of both NBU Governor 
Volodymyr Stelmakh ("who needs to go to rehabilitation" -- 
"he's 70 years old and done his time") and (now former) 
Finance Minister Viktor Pynzenyk, who resigned from office 
on February 12 (Ref B), Tigipko offered a "soft solution" 
that would install presidential aide Oleksander Shlapak as 
Deputy Governor, de facto elevating him to Acting Governor 
in Volodymyr Stelmakh's continued absence.  Tigipko agreed 
to contact Shlapak to help arrange a combined meeting with 
the President, the Prime Minister, and Rada Speaker Lytvyn 
that would take place at the behest of G-7 ambassadors, the 
IMF, and the World Bank. 
 
6.  (C) Comment. Tigipko is traveling outside of Ukraine 
until February 19.  We have received no comment from him on 
rampant rumors in the media about his possible role as 
Finance Minister, following the February 12 resignation of 
 
KYIV 00000311  002 OF 002 
 
 
Viktor Pynzenyk.  PM Tymoshenko has been quoted as saying 
that a new Finance Minister will be named next week, 
perhaps in conjunction with her announcement of Tigipko as 
the DPM and overall economic policy coordinator.  Our 
sources suggested on February 13 that Tigipko may also take 
ov
er the third position, filling Pynzenyk's vacated seat. 
End comment. 
TAYLOR

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