Ukrainian PM offers to quit after tape suggests he criticized president

KIEV (Reuters) - Ukrainian Prime Minister Oleksiy Honcharuk offered his resignation on Friday after an audio recording suggested he had criticized the president, but then appeared to indicate that he might keep his job.

President Volodymyr Zelenskiy would consider the resignation letter later on Friday, the president's office said.

Speculation over Honcharuk's position has grown this week after a recording of a man discussing Zelenskiy's purported lack of knowledge of economics was circulated on messaging channels, apparently at a meeting of the prime minister, finance minister and the National Bank of Ukraine (NBU) in December.

Zelenskiy is a former comic actor who had no political experience when he swept to power in an election last year on the back of public anger over high-level corruption.

Honcharuk said on Friday the recording had been doctored and was made up of different fragments of what had been said at government meetings.

"Its contents artificially create the impression that my team and I do not respect the president, who is our political leader," Honcharuk said on social media. He did not say whether it was his voice heard in the recording.

Central bank officials and the finance minister have declined to comment on the recording.

Zelenskiy asked law enforcement agencies to determine who was involved in making the recording and how to prevent such incidents from occurring in future.

Contacted by Reuters shortly after his announcement and asked whether he indeed intended to step down, Honcharuk said: "Do not jump to conclusions."

Under Ukraine's previous president, Honcharuk's predecessor as prime minister, Volodymyr Groysman, also made threats to resign but ultimately stayed the course until last July's parliamentary election which Zelenskiy's party won.

Honcharuk, appointed by lawmakers last August, declined to say whether he was using his resignation letter as a way of testing the president's confidence in him.

"It doesn't show the prime minister's desire to resign, but rather it's a way for him to fight to stay in his position," Volodymyr Fesenko, a Kiev-based political analyst.

"MODEL OF OPENNESS AND DECENCY"

Honcharuk announced his resignation in a message on Facebook where he also praised Zelenskiy as "a model of openness and decency".

"However, in order to remove any doubts about our respect and trust in the President, I wrote a letter of resignation and handed it to the President with the right to submit it to Parliament," he said.

Honcharuk appeared in parliament later on Friday and reaffirmed his respect for the president, adding that Ukraine must remain united in the face of what he called information attacks and manipulations.

He was given a standing ovation by a number of lawmakers, though some shouted "shame on you".

Since taking office, Honcharuk has set out an ambitious reform agenda and secured provisional agreement from the IMF for a three-year-loan program seen as key to maintaining investor confidence and economic stability.

Ukraine's dollar bonds softened slightly after the news but later recovered.

"Seems likely Zelenskiy will reject it," said Tim Ash of BlueBay Asset Management about the letter of resignation.

"Question is if Zelenskiy accepts it, would any credible reformer opt to sit in Honcharuk's place when the said govt session with the NBU was leaked, and Honcharuk was only being honest," he wrote on Twitter.

Honcharuk's government managed to secure a $5.5 billion IMF loan program in December but this is still subject to Ukraine's performance on reforms and tackling vested interests.

"(The resignation offer) will not affect them," Honcharuk said in his comments to Reuters on Friday, replying to a question about his government's reforms and the IMF program.

(Additional reporting by Natalia Zinets in Kiev and Tom Arnold in London; editing by Matthias Williams and Gareth Jones)

01/17/2020 13:25

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