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Ukraine Coalition Government Collapses as 2 Parties Quit

Yanukovych’s successor, billionaire Petro Poroshenko, had pledged to call parliamentary elections this year. Photographer: Krisztian Bocsi/Bloomberg
Yanukovych’s successor, billionaire Petro Poroshenko, had pledged to call parliamentary elections this year. Photographer: Krisztian Bocsi/Bloomberg

July 24 (Bloomberg) -- Ukraine’s coalition collapsed after two parties quit during a months-long pro-Russian insurgency in the nation’s east that downed a Malaysian Air jet last week.

The UDAR and Svoboda parties said they’d leave the government and seek a snap parliamentary ballot, according to statements today on their websites. Under the constitution, the former Soviet republic has 30 days to form a new coalition or it must call early elections. The existing cabinet will remain in place in the meantime.

Prime Minister Arseniy Yatsenyuk’s government, took over the country in February after pro-European street protests prompted Kremlin-backed President Viktor Yanukovych to flee to Russia. Yanukovych’s successor, billionaire Petro Poroshenko, had pledged to call parliamentary elections this year.

“We will probably have snap parliamentary elections at the end of October,” Yuriy Yakymenko, the head of political research at the Razumkov Center, said by phone from Kiev today. “This option was probably agreed on by political parties seeking elections and the president.”

The government and the current parliament will keep working until new institutions are formed, he said. Olga Lappo, Yatsenyuk’s spokeswoman, declined to comment when reached by phone today.

Yields on Ukrainian government bonds due 2023 rose to 8.31 percent as of 1 p.m. from 8.221 percent yesterday, data compiled by Bloomberg show. Ukraine’s hryvnia declined to 11.75 per dollar, compared with 11.68 yesterday.

To contact the reporter on this story: Daria Marchak in Kiev at dmarchak@bloomberg.net

To contact the editors responsible for this story: Balazs Penz at bpenz@bloomberg.net James M. Gomez, Andrea Dudik

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