March 10, 2016 / 5:43 PM / a year ago

Ukraine's Yaresko says rumors fuelling political crisis

Ukraine's Finance Minister Natalia Yaresko speaks during an interview with Reuters in Kiev, Ukraine, November 12, 2015.Valentyn Ogirenko

KIEV (Reuters) - Ukrainian Finance Minister Natalia Yaresko on Thursday deflected questions about her chances of becoming prime minister if the government collapsed and said such speculation was fanning the flames of the country's political crisis.

Yaresko is touted as a successor to Prime Minister Arseny Yatseniuk, who narrowly survived a no confidence vote in February but whose popularity within the coalition and the voting public has collapsed since taking office in 2014.

The crisis has stymied Ukraine's efforts to secure more aid from its international backers, including the International Monetary Fund, which is contingent on Kiev implementing reforms and clamping down on corruption.

A foreign-born former investment manager, Yaresko could be a popular choice with Ukraine's Western allies, but it is unclear whether she would have the political muscle to push through reforms any faster than Yatseniuk could.

"I think it does not help any of us right now to engage in speculation, frankly," said Yaresko at an investor conference in Kiev, when quizzed about her possible role in a new government.

"I think the speculation is what's causing the crisis to some extent. So my preference would be to focus on reality."

With Yatseniuk's coalition in turmoil, Ukraine and the IMF have yet to agree on a new memorandum setting out Kiev's precise commitments on reforms, which it will deliver in exchange for more aid worth $1.7 billion.

Even if Ukraine submits a new memorandum in March, it will have to wait at least until the IMF board meets in April to secure the money, she added.

"The memorandum is a living document," Yaresko said. "The IMF has to know who is going to be in the government ... as a lender you want to know a person who signs. The IMF wants some confidence that the program will be implemented."

Speaking at the same conference, the IMF's resident representative to Ukraine Jerome Vacher said the memorandum document was constantly evolving.

Discussions were ongoing about Ukraine's plans to fight corruption, reform its pension system and improve the government's finances, he said. However, he stressed the IMF board would need to be sure Kiev will stick to its commitments.

"It is important for us to have clarity on whether the policies will be implemented," Vacher said.

Editing by Alison Williams

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