KIEV, April 24 – President Viktor Yushchenko stepped up security at the State Property Fund, the country’s privatization agency, amid a looming clash with the government of Prime Minister Yulia Tymoshenko over assets to be sold off.
Yushchenko added the SPF to the list of state institutions, such as presidential and government offices, which are guarded by a special agency controlled by the president, people familiar with the matter said.
The move comes amid escalating tensions between Yushchenko and Tymoshenko over privatization of Odessa Portside Plant, lucrative assets that may fetch up to $1 billion when sold off.
Yushchenko suspended the sell-off earlier this month, but Tymoshenko had openly challenged the president, most recently on Wednesday, suggesting the sell-off would take place anyway.
The development shows the degree of distrust and hostility between Yushchenko and Tymoshenko. It reminds of the clash between Yushchenko and the pro-Russian government Prime Minister Viktor Yanukovych last year that had eventually led to the early election.
The strengthened security at the SPF comes as Tymoshenko has been trying to forcibly replace Valentyna Semeniuk, the head of the SPF, with a loyal figure, a key to Tymoshenko’s plans for massive sell-off of the state property.
Tymoshenko badly needs to start selling the assets soon to raise cash to support her campaign of bailing out millions of people on billions of hryvnias in failed Soviet-era bank deposits.
The bail-out campaign increased Tymoshenko’s popularity, but the failure to deliver on the promise would backfire and reduce her rating, analysts said.
According to the law, Semeniuk can be replaced only by a vote in Parliament, but Tymoshenko has been seeking to install a loyalist to the post by the government’s resolution.
Yushchenko made it clear on Thursday that the replacement of Semeniuk must take place in Parliament, suggesting that he would take action to make sure the government complies with the law.
“The answer of very simple,” Yushchenko said at a press conference. “If one has complains, the change of the [SPF] leadership can be done in the order set by the law.”
“This can be done exceptionally in Parliament through the majority of votes,” Yushchenko said. “The attempt to make the changes by government resolutions is a gross violation of the law. This will not happen.” (nr/ez)