Ukraine audiotape row: President rejects PM's offer to quit

President Zelensky (left) said Mr Honcharuk must tackle a number of key issues to keep his job

Ukrainian President Volodymyr Zelensky has rejected a resignation offer by Prime Minister Oleksiy Honcharuk over a leaked audiotape scandal.

"I decided to give you a chance," Mr Zelensky told the prime minister during a "clear the air" meeting.

But he said this was dependant on Mr Honcharuk's ability to tackle a number of pressing issues.

In the tape, a voice sounding like Mr Honcharuk's says Mr Zelensky only has a "primitive" grasp of economics.

Mr Honcharuk, a 35-year-old trained lawyer, also appears to admit that he himself is not good at economics.

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The authenticity of the recording has not been officially confirmed.

Mr Zelensky, a 41-year-old TV comedian and businessman, was elected last April, trouncing President Petro Poroshenko.

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The audiotape affair comes at a difficult time for Mr Zelensky, as his relations with President Donald Trump are under intense scrutiny. The US president is being impeached for allegedly trying to pressure Mr Zelensky into investigating political rival Joe Biden.

What did Mr Zelensky say?

At Friday's meeting in Kyiv, the president described the situation around the leaked recording as "very unpleasant".

But he said he decided to keep the prime-minister and his cabinet, taking into account that the public had "great trust" in them when the government was formed last August.

"You have not yet repaid this loan to our society," Mr Zelensky said.

At the same time, Mr Zelensky warned that Mr Honcharuk must tackle the issue of high salaries among government ministers and other issues to keep his job.

The president also gave the Ukrainian authorities two weeks to track down the source of the leak.

What was in the leaked tape?

The controversial audiotape was uploaded to an anonymous YouTube channel on Wednesday evening.

Mr Honcharuk was apparently discussing the national budget during a December meeting with the finance minister and National Bank of Ukraine.

Writing on social media, Mr Honcharuk said the recordings had been edited from several fragments of government meetings to create the false impression that he did not respect the president.

He said Mr Zelensky was "a model of honesty for me", but "to remove any doubts about our respect and trust in the president, I wrote a resignation offer".

Before joining the Zelensky team Mr Honcharuk worked as a commercial lawyer. He is the youngest prime minister in Ukraine's history.

Some Ukrainian commentators have speculated that the leak may be a deliberate attempt to destabilise Mr Zelensky's government, and there are questions about its authenticity.

In an excerpt from the recording, broadcast by private news channel 112 Ukraina, the voice attributed to Mr Honcharuk scorns the "Sorosite" reformers around President Zelensky - a reference to reformers backed by billionaire US financier George Soros, a major philanthropist in ex-communist eastern Europe.

"There used to be good business managers, under whom the [economic growth] was 4.6%. Then Sorosites came, and the economic growth is 2% and less. And you cannot prove anything to anyone," the speaker said.

"And all of this, together, induces in the president a feeling that the situation is uncontrollable. We do not understand. We have no plans."

That bleak assessment is, however, contradicted by some recent reports on the Ukrainian economy.

Ukraine's state statistics service last month estimated output in 2019 at just over 3%, the highest rate for the past eight years.

Anders Aslund, a Ukraine expert at the Atlantic Council think-tank, says the budget deficit was reduced to 2% of GDP (total output) in 2019, inflation fell to 5% and the currency, the hryvnia, strengthened 19% against the US dollar.

Mr Honcharuk's government secured a $5.5bn (£4.2bn; €4.9bn) IMF loan programme in December, but the payments depend on Ukraine's progress in reforming the economy, especially in tackling the power of oligarchs.