(Bloomberg) — Ukraine’s top politicians raced to defuse a scandal over leaked comments by the prime minister, with a move that would demonstrate the bond between the new leading tandem.Prime Minister Oleksiy Honcharuk tendered his resignation Friday after he was heard on a leaked recording criticizing his boss’s grasp of the economy. But the move was seen as a formality — and a pledge of loyalty — as President Volodymyr Zelenskiy plans to reject the offer, the Kyiv-based newspaper Zerkalo Nedeli reported, citing people in the president’s office it didn’t name.The scandal has cast the spotlight on Zelenskiy’s biggest challenge: healing an economy that plunged into recession and flirted with default after a 2014 revolution toppled a Moscow-backed administration and Russia annexed Crimea.The focus of the leak makes the comments from Honcharuk, handpicked by the president to lead the economic overhaul, potentially more damaging. On the tapes, ministers and central bankers discussed their struggles in explaining the currency market and economic trends to the president.At the same time, the scandal is relatively benign compared to leaks in Ukraine’s past that included politicians discussing corruption — and even murder. And Zelenskiy, a former comedian who entered politics just a year ago, ran on his willingness to introduce change rather than his ability to understand the intricacies of monetary policy and financial engineering.“We are one team,” Honcharuk said in parliament Friday after announcing his offer to resign. “We all got into parliament and into government to change the country thanks to this person, thanks to Volodymyr Zelenskiy.”‘Sort It Out’While neither Honcharuk nor Zelenskiy, political newcomers aged 35 and 41, commented further on the prime minister’s offer, the president met with heads of law enforcement agencies and demanded an investigation into who leaked the tapes. He also called for measures “to make such incidents impossible in the future.”“I demand information in two weeks, as soon as possible, about who was recording,” Zelenskiy said in a statement. “We need to find who did it and to sort it out.”Ukraine’s currency, the hryvnia, fell to a two-month low against the dollar, taking this year’s decline to 2.1%. Last year, the currency was the world’s best performer with a 16% gain.Even if Honcharuk stays, the leak has exposed the challenges that Zelenskiy faces at the head of a former Soviet country where billionaire oligarchs, Vladimir Putin, the European Union and the U.S. are wrangling for influence.On the tape, a man with a voice that sounds like Honcharuk says Zelenskiy’s economic knowledge is limited and suggests illustrating the effects of a stronger hryvnia and slower inflation to the president through the price of a popular salad. The central bank declined to comment on the tapes, while the government press office said they were not able to confirm their authenticity.In his Facebook post, Honcharuk hailed the government’s achievements so far, including renewing a financial aid agreement with the International Monetary Fund and a natural-gas transit deal with Russia.Those have come amid setbacks as well, including Zelenskiy’s involvement in the phone call at the center of the impeachment inquiry into U.S. President Donald Trump and a close relationship with Ukraine’s richest man, Igor Kolomoisky.One TeamHoncharuk, a lawyer who led Zelenskiy’s economic team after the president won last year’s election, was appointed prime minister in August. Before that, he led an NGO aimed at improving the investment climate and financed by the EU.The pemier flashed a confident smile when he and his ministers appeared in parliament for a weekly Q&A session Friday. He refused to answer questions, and dozens shouted “Shame on you!” as he left the assembly.“We all respect” Zelenskiy, “and for us it’s very important to have 100% trust inside the team,” Honcharuk told the assembly before leaving. “We are ready to do much more together with you, but for that we must be united.”Analysts at Dragon Capital, a Ukrainian investment bank, pointed out another element of Honcharuk’s resignation: He submitted the offer to the president’s office, and not to parliament as is required under the constitution.“That Honcharuk circumvented the law suggests his desire to underscore his allegiance to the president by letting him decide the matter,” Dragon Capital said in a note. “We doubt Zelenskiy currently has the will and capacity for a major government shake-up, especially a ready replacement for Honcharuk.”(Updates with comments from Zelenskiy and background throughout.)\–With assistance from Marton Eder.To contact the reporters on this story: Volodymyr Verbyany in Kiev at vverbyany1@bloomberg.net;Daryna Krasnolutska in Kyiv at dkrasnolutsk@bloomberg.net;Andrea Dudik in Prague at adudik@bloomberg.netTo contact the editors responsible for this story: Balazs Penz at bpenz@bloomberg.net, Michael WinfreyFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.



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