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Second Azarov Government

16th Cabinet of Ukraine (since 1990)
Date formed24 December 2012
Date dissolved28 January 2014 (de facto)
28 February 2014 (de jure)
People and organisations
Head of stateViktor Yanukovych
Oleksandr Turchynov (acting)
Head of governmentMykola Azarov
Serhiy Arbuzov
(acting)
Oleksandr Turchynov (acting)
Deputy head of governmentSerhiy Arbuzov
No. of ministers23
Member partyParty of Regions
Ukraine – Forward!
Status in legislatureMajority
Opposition partyBatkivshchyna
UDAR
Svoboda
Opposition leaderArseniy Yatsenyuk
Vitaliy Klychko
Oleh Tyahnybok
History
PredecessorFirst Azarov government
SuccessorFirst Yatsenyuk government

The second Azarov government (Ukrainian: Другий уряд Миколи Азарова, Druhyi uriad Mykoly Azarova) was the government of Ukraine from 24 December 2012 to 28 January 2014.[1] It was dissolved amidst the Euromaidan protests.[2] The ministers (except Prime Minister Mykola Azarov who was replaced by Deputy Prime Minister Serhiy Arbuzov (ex officio)),[3] continued briefly as a caretaker government.[3][4] On 27 February 2014 Ukraine's parliament approved a resolution to formally dismiss the government.[5]

Creation

[edit]

On 3 December 2012, the first Azarov government became a caretaker government after Ukrainian president Viktor Yanukovich accepted the resignation of prime minister Mykola Azarov and his government following the 28 October 2012 parliamentary election.[6] A number of government members, including Prime Minister Azarov, were elected to parliament in that election.[6] In order to get these parliamentary mandates, they were obliged to submit documents on the dismissal from their previous job to the Central Election Commission within 20 days after the election (by 3 December).[7]

On 9 December 2012, Yanukovych nominated Azarov for a new term as prime minister.[8] This nomination was approved by parliament on 13 December 2012.[9] According to Svoboda, that voted absolutely against Azarov, his appointment is illegal at least due to such technicality in the law of Ukraine which requires the president of Ukraine to be physically present in the session hall of parliament during his candidacy approval by the Verkhovna Rada.[10] The People's Deputy of Ukraine from the parliamentary faction UDAR, Iryna Herashchenko, stated that all political appointments that took place that day are a "political bribe" of the party of power (Party of Regions) to the Communist Party of Ukraine.[10] On 4 December 2012, nine days before the appointment of Azarov, a people's deputy of Ukraine from the Communist Party of Ukraine Spiridon Kilinkarov insisted on the political talk show Syohodni. Pro holovne on the Ukrainian television channel TVi that the communists absolutely will not vote for any candidates for the prime minister of Ukraine from the Party of Regions.[11] On 13 December, absolutely all members of the Communist Party of Ukraine voted as one for the candidacy of Mykola Azarov as the Prime Minister of Ukraine.

On 24 December 2012, the second Azarov government was appointed by president Yanukovych (Presidential Ukase #726/2012[12]).[1] The coalition of Party of Regions and Ukraine – Forward! as it is now in the government was foreseen and mentioned by the Ukrainian television studio Kvartal 95 in October 2012 in one of their episodes of Evening quarter.[13]

According to Anders Åslund, the government faced three big tasks: to govern, to break Ukraine's foreign isolation and to salvage the country from a vulnerable financial situation.[14] In December 2012, he observed "little reason to believe that it can solve any of these three tasks".[14]

Communist Party faction leader Petro Symonenko stated on 28 December 2012 that the Communist Party of Ukraine and the Party of Regions had not concluded any agreements concerning the Communist support of Mykola Azarov's candidacy for the post of Prime Minister but that his party had supported this nomination because Azarov had told them his government was ready to implement the program on Ukraine's accession to the Customs Union of Belarus, Kazakhstan and Russia.[15] Symonenko added that should Azarov fail to fulfill the promise of Ukraine's joining this customs union, the Communists would initiate his resignation.[15]

Parliamentary voting

[edit]
Yes No Abstained Did not vote Total
252 129 0 20 401
Faction Number of members Yes No Abstained Did not vote Absent
Party of Regions 210 208 0 0 0 2
Batkivshchyna – United Opposition 99 0 51 0 16 32
UDAR 42 0 38 0 3 1
Svoboda 37 0 37 0 0 0
Communist Party of Ukraine 32 32 0 0 0 0
Not affiliated 24 12 3 0 1 8

Vote of no confidence

[edit]

In 2013 the government managed twice to survive the vote of no confidence from the Ukrainian parliament until finally the president of Ukraine accepted the resignation of prime minister of Ukraine Mykola Azarov earlier in 2014.

The first time the parliament voted on 19 April 2013.[16]

Yes No Abstained Did not vote Total
190 91 2 79 362
Faction Number of members Yes No Abstained Did not vote Absent
Party of Regions 207 0 91 2 74 40
Batkivshchyna – United Opposition 95 88 0 0 0 7
UDAR 42 35 0 0 0 7
Svoboda 36 36 0 0 0 0
Communist Party of Ukraine 32 21 0 0 1 10
Not affiliated 32 10 0 0 4 18

The second time the parliament voted on 3 December 2013.[17]

Yes No Abstained Did not vote Total
186 5 12 135 338
Faction Number of members Yes No Abstained Did not vote Absent
Party of Regions 205 1 5 12 100 87
Batkivshchyna – United Opposition 90 90 0 0 0 0
UDAR 42 42 0 0 0 0
Svoboda 36 36 0 0 0 0
Communist Party of Ukraine 31 0 0 0 31 0
Not affiliated 38 17 0 0 4 17

Fall

[edit]
See also: Revolution of Dignity

After weeks of Euromaidan protests, and clashes, during which civilians were killed, Prime Minister Azarov offered his letter of resignation on 28 January 2014.[18] According to his cabinet, Azarov was quoted saying that "In order to create additional opportunities for socio-political compromise, for the sake of the peaceful settlement of the conflict, I have made a personal decision to ask the Ukrainian president to accept my resignation from the post of Ukrainian prime minister".[19] Under the Ukrainian constitution this meant the whole government had resigned.[3] The president subsequently accepted the resignation and signed a decree dismissing the cabinet, which decree would not take effect until the Verhovna Rada approved a new cabinet. Hence the second Azarov government continued as a caretaker government.[3] Prime Minister Azarov was replaced by deputy prime minister Serhiy Arbuzov.[3] But under Ukrainian law the cabinet could be able to implement its duties for no more than 60 days.[4]

The compromise deal of 21 February 2014 between president Yanukovych and the opposition stipulated that a new national unity government was to be formed within ten days.[20] Also on 21 February 2014 parliament dismissed the Minister of Internal Affairs Vitaliy Zakharchenko.[21]

On 22 February 2014 the Ukrainian parliament appointed Oleksandr Turchynov as a coordinator of the Cabinet of Ukraine (Serhiy Arbuzov was not dismissed from his position).[22][23] The same day the Verkhovna Rada adopted number of laws which appointed parliamentary commissioners in control of several state agencies such as Ministry of Defense (Volodymyr Zamana),[24] Security Service of Ukraine (Valentyn Nalyvaichenko)[25] and Prosecutor General's office (Oleh Makhnitsky).[26] Parliament also appointed Arsen Avakov as the acting Minister of International Affairs.[27][28][29] Also on 22 February 2014 parliament expressed no confidence to the Prosecutor General of Ukraine Viktor Pshonka following his dismissal from the post.[30]

On 23 February 2014 the Verkhovna Rada dismissed the Minister of Healthcare Raisa Bohatyriova.[31] It also dismissed the Minister of Education and Science Dmytro Tabachnyk[32] On 24 February 2014 (revoted on 24 February) Minister of Foreign Affairs Leonid Kozhara was dismissed by parliament[33] and parliament a decision to dismiss the Minister of Social Policy Natalia Korolevska and the Minister of Culture Leonid Novokhatko.[34]

On 27 February 2014 Ukraine's parliament approved a resolution to dismiss the government.[5] They immediately followed it by the appointment of the new cabinet members of the Yatsenyuk government.[35]

Achievements

[edit]

In December 2013 the IMF stated that the Ukrainian government's policy mix had "generated large external and fiscal imbalances" and that this had "contributed to deepening the recession in the country".[36]

Composition

[edit]

When the cabinet took oath 24 December 2012; till 5 February 2013 the posts of Minister of Culture and Minister of Industrial policy were vacant.[37][38] On 28 February 2013 President Viktor Yanukovych reorganized the Ministry of Education and Science, Youth and Sports and the State Service for Youth and Sports, creating a Ministry of Education and the (new) Ministry of Youth and Sports.[39] On 2 July 2013 Oleksandr Lavrynovych was elected as member of the Supreme Council of Justice of Ukraine.[40] Olena Lukash replaced Lavrynovych as Justice Minister 2 days later.[41]

After on 28 January 2014 Prime Minister Mykola Azarov was replaced by Deputy Prime Minister Serhiy Arbuzov all ministers in the cabinet kept their post and continued as a caretaker government.[4][3][42]

Composition

[edit]
Party key Party of Regions
Ukraine – Forward!
Non-party politician
Office Party Incumbent[43]
Prime Minister Mykola Azarov (until 28 Jan 2014)
First Vice Prime Minister Serhiy Arbuzov
Vice Prime Minister (Ecology, natural resources, energy, coal industry and industrial policy, space sector)[44] Yuriy Boyko
Vice Prime Minister (Infrastructure, regional development, construction, utilities and housing economy) Oleksandr Vilkul
Vice Prime Minister (Culture, healthcare, education, sciences, youth and sports) Kostyantyn Gryshchenko
Minister of Social Policy Natalia Korolevska (until 24 Feb 2014)
Minister of Revenues and Duties Oleksandr Klymenko
Minister of Health Raisa Bogatyrova (until 23 Feb 2014)
Minister of Economical Development and Trade Ihor Prasolov
Minister of Regional Development, Construction and Communal Living Hennadiy Temnyk
Minister of Education and Science Dmytro Tabachnyk (until 23 Feb 2014)
Minister of Culture Leonid Novokhatko[37][45] (until 24 Feb 2014)
Minister of Industrial policy Mikhaylo Korolenko[37][46]
Minister of Defense Pavlo Lebedyev
Minister of Internal Affairs Vitaliy Zakharchenko (until 21 Feb 2014)
Minister of Agrarian Policy and Food Mykola Prysyazhnyuk
Minister of Justice Oleksandr Lavrynovych (until 2 July 2013)
Olena Lukash (since 4 July 2013)[41]
Minister of Foreign Affairs Leonid Kozhara (until 23 Feb 2014)
Minister of Finance Yuriy Kolobov
Minister of Energy [Generation] and Coal [Mining] Industry Eduard Stavitskyi
Minister of Ecology and Natural Resources of Ukraine Oleh Proskuryakov[47]
Minister of Infrastructure of Ukraine Volodymyr Kozak[48]
Ministry of Youth and Sports Ravil Safiullin[39]


Vice prime minister assignments

[edit]
  • First Vice PM – Serhiy Arbuzov
    • Ministry of Agrarian Policy and Food
    • Ministry of Economical Development and Trade
    • Ministry of Social Policy
    • Ministry of Finance
    • Ministry of Revenues and Duties
  • Vice PM – Yuri Boiko[44]
    • Ministry of Energy and Coal Industry
    • Ministry of Ecology and Natural Resources
    • Ministry of Industrial Policy
    • Space sector
  • Vice PM – Oleksandr Vilkul
    • Ministry of Infrastructure
    • Ministry of Regional Development, Construction and Housing
  • Vice PM – Kostyantyn Hryshchenko
    • Ministry of Culture
    • Ministry of Education and Science, Youth and Sport
    • Ministry of Health Security
  • Non-supervised ministries (National Security and Defense Council of Ukraine)
    • Ministry of Justice
    • Ministry of Defense
    • Ministry of Foreign Affairs
    • Ministry of Internal Affairs
    • Ministry of Cabinet of Ministers

References

[edit]
[edit]
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Second Azarov government

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The Second Azarov government was the executive branch of Ukraine led by Prime Minister Mykola Azarov from December 2012 to January 2014, operating under President Viktor Yanukovych and dominated by the pro-Russian Party of Regions. Appointed following the Party of Regions' plurality victory in the October 2012 parliamentary elections—despite international observers noting irregularities—the cabinet prioritized macroeconomic stabilization amid slowing growth and fiscal pressures, including subsidies for energy and efforts to secure loans from Russia. Its policies shifted Ukraine toward Eurasian integration, culminating in the suspension of an association agreement with the European Union in November 2013, which triggered mass Euromaidan protests. The administration survived multiple parliamentary no-confidence votes but became defined by allegations of systemic corruption, selective prosecutions, and repressive laws curbing dissent, including January 2014 legislation expanding government powers against protesters. Azarov's resignation on 28 January 2014, alongside the repeal of anti-protest measures, marked the prelude to Yanukovych's ouster and the Revolution of Dignity, reflecting deep public discontent with the government's economic mismanagement and authoritarian tendencies.

Background and Formation

Political Context Leading to Formation

The Second Azarov Government emerged in the context of President Viktor Yanukovych's administration, which had consolidated power following his in the 2010 presidential election. 's first cabinet, appointed in March 2010, prioritized economic stabilization measures in response to the global and sought to balance relations between the and . By mid-2012, amid preparations for parliamentary elections, the government encountered opposition accusations of authoritarian tendencies and selective prosecution of political rivals, including former Yulia Tymoshenko. These tensions underscored the polarized political landscape, with Yanukovych's (PR) aiming to secure a legislative majority to extend its influence. The October 28, 2012, parliamentary elections marked a pivotal moment, as PR obtained approximately 30% of the proportional vote and the largest bloc of seats in the 450-member Verkhovna Rada, forming a coalition with Communist Party and independent lawmakers to achieve a working majority of around 235 seats. International observers, including the OSCE, reported significant irregularities, such as vote-buying and media bias favoring the ruling party, though the Central Election Commission certified the results. This outcome enabled Yanukovych to maintain policy continuity, prompting the resignation of the first Azarov government on December 3, 2012, as multiple ministers, including Azarov, had won parliamentary mandates requiring their transition to legislative roles. The cabinet operated in caretaker mode until a successor could be approved, reflecting the constitutional requirement under Ukraine's semi-presidential system for alignment between executive and legislative branches. Yanukovych's renomination of Azarov on December 11, 2012, signaled intent to preserve administrative stability and pro-Russian orientation amid economic pressures and geopolitical maneuvering. Despite physical scuffles in during the December 13 vote, Azarov secured approval with coalition support, paving the way for the full on December 24, 2012. This formation occurred against a backdrop of declining public approval for the , with polls indicating widespread dissatisfaction over and sluggish reforms, yet the PR's electoral provided the necessary parliamentary leverage.

2012 Parliamentary Elections and Government Crisis

Parliamentary elections in Ukraine took place on October 28, 2012, to elect 450 members to the using a mixed system of and single-mandate districts. The ruling obtained 30.01% of the proportional vote, the highest share, while opposition parties received 25.53%, UDAR 13.96%, the 13.18%, and Svoboda 10.44%. The claimed victory, securing the largest bloc of seats despite international criticism. The elections faced significant controversies, including allegations of widespread fraud, voter intimidation, and manipulation in single-mandate districts, particularly where results could not be announced promptly. The jailing of opposition leader on politically motivated charges further tainted the process, as noted by Western observers. The OSCE Parliamentary Assembly denounced the vote for abuses by ruling authorities, citing undue influence through state resources, favoring the incumbents, and failures in ensuring equal conditions for candidates. These issues reflected deeper problems in Ukraine's electoral framework under President Viktor Yanukovych's administration, though the proportional results aligned with regional voter preferences favoring pro-Russian parties in the east and south. Following the elections, Mykola Azarov's first government resigned on December 3, 2012, immediately after approving the 2013 state budget, as required by constitutional procedure after parliamentary renewal and amid economic challenges including slowing growth and high debt levels. President Yanukovych accepted the resignation but instructed the cabinet to continue functioning in an acting capacity until a new government could be formed by the incoming . This interim period constituted a government crisis, exacerbated by —GDP growth had decelerated to around 0.5% for the year—and difficulties in securing international financing, such as from the IMF, due to unfulfilled reform conditions like energy subsidy cuts. The new parliament convened amid tensions, including physical brawls among deputies that delayed proceedings. On December 13, 2012, the voted to reappoint Azarov as , achieving the necessary majority through alliances with independents and the , despite opposition protests. The second Azarov government was formally approved and appointed on December 24, 2012, marking the resolution of the crisis and continuity in executive leadership under Yanukovych's pro-Russian orientation. This reconfiguration relied on a fragile , as the fell short of an absolute majority, necessitating support from smaller factions to govern effectively.

Parliamentary Vote and Approval Process

President nominated Mykola for a second term as on December 9, 2012, ahead of the new 's inaugural session. The nomination required parliamentary approval under Ukraine's constitution, where the 450-seat holds the authority to confirm the proposed by the President. The freshly elected parliament, dominated by Yanukovych's with 185 seats alongside allies like the (32 seats), convened on December 12, 2012. Opposition factions, including led by Yulia Tymoshenko's allies, physically blockaded the parliamentary rostrum to obstruct proceedings and protest alleged election irregularities, delaying the vote on Azarov. This tactic reflected broader tensions from the , 2012, elections, which international observers noted as flawed due to vote-buying and favoring the ruling party. On December 13, 2012, following chaotic scuffles and brawls among deputies that injured several lawmakers, security forces cleared the chamber, enabling the session to proceed. The then elected Volodymyr Rybak of the as Speaker by 238 votes before approving Azarov's nomination as with 252 votes in favor and none against, as opposition members largely abstained or walked out. The affirmative votes came predominantly from the , Communists, and smaller pro-government groups, securing the minimum required majority. With Azarov confirmed, he submitted proposals for cabinet ministers, which President Yanukovych formalized through decrees on , 2012, reappointing most incumbents and adjusting portfolios without further parliamentary votes on individual positions, per constitutional procedure where the legislature's primary role post-PM approval involves potential endorsement of the government's program rather than line-item ministerial confirmations. This process marked the official establishment of the Second Azarov Government, amid criticism from opposition and Western observers that the ruling coalition's control undermined checks on executive power.

Composition and Structure

Key Cabinet Members and Appointments

Mykola Azarov was reappointed as on December 13, 2012, by a parliamentary vote of 252 in favor, following the resignation of his first government on December 3 due to multiple ministers' election to the . The full cabinet was formalized on December 24, 2012, via presidential decree, retaining several incumbents while introducing figures aligned with President Viktor Yanukovych's to consolidate control amid post-election coalition dynamics. Serhiy Arbuzov, former Governor of the National Bank of Ukraine, was appointed First Deputy Prime Minister on December 24, 2012, tasked with economic oversight and positioned as a potential successor to Azarov given his proximity to Yanukovych. Yuriy Kolobov retained his role as Minister of Finance, a position he had held since February 2012, focusing on budget implementation despite criticisms of fiscal opacity in subsequent audits. Leonid Kozhara was appointed Minister of Foreign Affairs on December 24, 2012, succeeding Kostiantyn Hryshchenko and steering Ukraine's diplomacy toward balanced relations with and the EU during the lead-up to the summit. continued as Minister of Internal Affairs, maintaining his prior appointment and handling security amid rising political tensions. Other notable retainments included Dmytro Tabachnyk as Minister of Education, Science, and Sports, whose policies emphasized Russian-language instruction in eastern regions, drawing opposition from Ukrainian nationalists.
PositionAppointeeKey Notes
Prime MinisterReappointed December 13, 2012; leader.
First Deputy Prime MinisterAppointed December 24, 2012; economic policy focus.
Minister of FinanceYuriy KolobovRetained December 24, 2012; handled 2013 budget.
Minister of Foreign AffairsLeonid KozharaAppointed December 24, 2012; OSCE chair in 2013.
Minister of Internal AffairsRetained December 24, 2012; security enforcement role.

Vice Prime Ministers and Portfolio Assignments

The Second Azarov Government, formed on December 24, 2012, included one First Vice Prime Minister and three Vice Prime Ministers, reflecting a structure designed to distribute oversight of critical economic and sectoral responsibilities amid post-election reconfiguration. served as First Vice Prime Minister, leveraging his prior role as chairman to focus on macroeconomic stability, finance, taxation, and revenue policy coordination.
NamePositionPortfolio Responsibilities
Serhiy ArbuzovFirst Vice Prime MinisterEconomic policy, finance, revenue and taxes, overall government management
Vice Prime MinisterFuel and energy, coal industry, ecology, natural resources
Vice Prime Minister, infrastructure, , , housing and communal services
Kostyantyn HryshchenkoVice Prime Minister coordination (initially, as former Foreign Minister)
Yuriy Boyko, previously Energy and Coal Minister, retained influence over energy-related domains, ensuring continuity in sector governance despite the cabinet reshuffle. Oleksandr Vilkul, appointed from regional leadership in , handled infrastructure and development portfolios critical to industrial recovery efforts. Kostyantyn Hryshchenko, outgoing Foreign Minister, took a Prime Minister role with emphasis on diplomatic alignment, though his tenure was marked by limited operational autonomy compared to economic-focused deputies. These assignments underscored prioritization of economic stabilization and resource sectors, with Arbuzov positioned as economic coordinator until Azarov's resignation in January 2014, when he briefly acted as .

Policy Priorities and Implementation

Economic Stabilization Measures

The second Azarov government inherited an economy showing signs of contraction, with GDP declining by 1.3% in the third quarter of 2012, marking the first negative growth since the 2009 crisis. The general government budget deficit had doubled to 3.8% of GDP in 2012, exacerbated by quasi-fiscal losses from Naftogaz subsidies and reluctance to adjust domestic gas tariffs despite IMF recommendations. In response, the government prioritized fiscal realism in the 2013 budget, aiming to avoid politically driven spending that could trigger further instability, while projecting a deficit rise to 5.75% of GDP amid recognized shortfalls in VAT refunds. To enhance revenue collection and administrative efficiency, the cabinet established the State Fiscal Service in December 2012 by merging the State Tax Service and State Customs Service, intending to streamline tax administration and combat evasion in a context of mounting fiscal pressures. Concurrently, efforts continued on , with commitments to reduce administrative burdens on businesses and eliminate regulatory barriers, building on prior tax simplifications but facing implementation hurdles amid economic slowdown. Negotiations with the IMF for a new standby arrangement stalled repeatedly over demands for gas hikes—potentially up to 50% for households—and deeper expenditure cuts, which the government deferred to preserve social stability, opting instead for short-term fiscal forbearance. A pivotal stabilization step occurred in December 2013, when the government secured a $15 billion loan from , coupled with a 30% reduction in import prices from $410 to $268.50 per 1,000 cubic meters, providing immediate to avert default risks and support the hryvnia amid foreign reserve depletion to below $20 billion. Azarov described this as averting and enabling a return to growth, though it substituted structural reforms with geopolitical financing, delaying IMF-mandated adjustments like pension fund deficit reduction and restructuring. By early 2014, the government reiterated goals of stable prices and currency rates through societal consolidation, but these measures yielded limited empirical stabilization, as GDP contracted 0.3% for the full year 2013 per IMF estimates, reflecting underlying vulnerabilities from deferred reforms.

Foreign Policy Orientation

The Second Azarov Government pursued a multi-vector foreign policy, nominally balancing integration with economic cooperation in the Russian-led Eurasian , but increasingly prioritized relations with to address Ukraine's fiscal vulnerabilities amid Russian pressures and EU reform preconditions. This orientation reflected President Viktor Yanukovych's broader strategy of avoiding binding geopolitical choices, rejecting membership while extending the Russian Black Sea Fleet's lease in until 2042—a 2010 concession upheld through Azarov's tenure—and focusing on pragmatic and deals with to mitigate economic downturns, including a 1.3% GDP contraction in Q3 2012. Relations with the EU centered on negotiations for an Association Agreement, including a Deep and Comprehensive , with the indicating in December 2012 that signing could occur by November 2013 contingent on judicial and anti-corruption reforms, such as resolving the imprisonment of former Prime Minister . In September 2013, the government approved the agreement domestically, signaling intent to proceed despite Russian countermeasures like import bans on Ukrainian goods that began escalating in 2013. However, on November 21, 2013, Prime Minister Azarov announced the suspension of preparations for signing at the Summit in , citing potential trade losses for Ukrainian businesses from incompatibility with the Eurasian and unfavorable IMF loan conditions demanded by the EU as alternatives. Azarov attributed the decision partly to Russian requests for trilateral talks without ultimatums, framing it as a necessary delay to avoid economic isolation. Engagement with Russia intensified through high-level diplomacy, including Azarov's August 2013 Moscow talks with Russian Prime Minister on resolving trade disputes and Azarov's May 2013 signing of a with the Eurasian Economic Commission in , which facilitated Ukraine's pursuit of in the to safeguard economic interests without full membership. This culminated on December 17, 2013, in a agreement where committed to purchasing $15 billion in Ukrainian bonds and reducing to $268.50 per 1,000 cubic meters from $410, a move Azarov described as averting national bankruptcy and enabling growth, though critics viewed it as yielding to coercion amid ongoing protests. These steps underscored the government's causal prioritization of immediate Russian economic lifelines over EU-oriented reforms, which carried longer-term structural demands.

Domestic Governance and Reforms

The second Azarov government maintained a centralized administrative structure inherited from the prior cabinet, with limited initiatives to streamline or enhance efficiency. emphasized macroeconomic stabilization and fiscal discipline in cabinet meetings, but structural reforms in , such as modernization or , were not prioritized or substantially advanced during the government's tenure from December 2012 to January 2014. International assessments noted persistent political interference in state institutions, hindering progress toward independent . In , the government implemented the Law on Principles of State Language Policy, adopted by on July 3, 2012, and signed by President on July 23, 2012, which permitted the official use of minority languages like Russian in regions where they constituted at least 10% of the population. This measure was presented by authorities as safeguarding in multi-ethnic areas, particularly in eastern and , but it faced domestic opposition for potentially diluting the status of Ukrainian as the sole state language and was not accompanied by complementary reforms to promote Ukrainian usage nationwide. Judicial governance saw no meaningful reforms under the second Azarov cabinet, with the system continuing to exhibit vulnerabilities to executive influence and . Reports from highlighted ongoing issues of judicial selectivity and lack of , as political actors retained leverage over appointments and decisions, contrary to earlier promises of . Efforts to align with international standards, such as those recommended by the IMF for broader institutional strengthening, were deferred in favor of short-term economic measures, contributing to stagnation in rule-of-law advancements. Public sector management focused on cost containment amid economic pressures, including nominal freezes on certain administrative expenditures, but these were tactical responses to budget deficits rather than comprehensive overhauls. The government's approach reflected a consolidation of power among loyalists in key bureaucratic roles, prioritizing loyalty over merit-based reforms, as evidenced by cabinet reshuffles that reinforced clan networks without introducing transparency mechanisms. Overall, domestic governance under Azarov II emphasized continuity and control, with reforms subordinated to immediate fiscal and political imperatives, setting the stage for escalating tensions over institutional legitimacy.

Achievements

Fiscal and Tax Reforms

The Second Azarov government established the Ministry of Incomes and Fees in 2012 by merging administration, , and duties functions to enhance collection and reduce evasion. This administrative reform aimed to centralize fiscal oversight under a single entity reporting to the Cabinet, with initial efforts focused on improving services and processes. By early 2014, the ministry reported advancements in administration quality, including streamlined procedures for VAT refunds and reduced bureaucratic hurdles for businesses. Fiscal policy emphasized deficit reduction targets amid economic slowdown, with the 2013 state projecting a deficit of approximately 3.1 percent of GDP through expenditure restraint and optimization. However, actual outcomes exceeded targets, reaching over 4 percent of GDP by year-end due to lower-than-expected s from sluggish growth and rising arrears, prompting mid-year adjustments like deferred spending. The government pursued modest consolidation via current expenditure controls rather than broad , avoiding politically sensitive measures such as energy tariff hikes demanded by the IMF. On taxation, key legislative changes included amendments to the Tax Code in July 2013 introducing rules, effective September 1, to align controlled transactions with arm's-length principles and curb profit shifting by multinationals. These provisions required documentation for related-party dealings exceeding certain thresholds and imposed penalties for non-compliance, aiming to safeguard the tax base estimated at billions of hryvnia annually. Additional tweaks targeted ecological taxes on vehicle scrapping and other fees, though broader rate adjustments were limited to preserve business competitiveness amid risks. In April 2013, Revenues Minister Oleksandr Klymenko proposed revenue-boosting measures like enhanced audits and simplified declarations, projecting potential gains without major rate hikes. Despite these steps, international assessments noted insufficient reversal of expenditures and benefits that eroded the base, contributing to fiscal vulnerabilities exposed by the 2013-2014 . The approach prioritized administrative efficiency over structural overhauls, reflecting a balance between stabilization goals and pre-electoral in social spending.

Infrastructure and Energy Initiatives

The Second Azarov Government, formed on December 24, 2012, prioritized and development as core components of its economic stabilization efforts. highlighted bolstering through diversification and efficiency measures, alongside launching new projects to stimulate growth and job creation. In the energy domain, the administration focused on securing affordable supplies amid Ukraine's heavy reliance on imports, which exceeded 60% of total consumption in 2012. A pivotal initiative was the negotiation of revised gas pricing contracts with , culminating in the December 17, , action plan that reduced the price from approximately $268 to $170 per 1,000 cubic meters and provided a $15 billion loan as prepayment for future deliveries. Azarov described this agreement as "historic," arguing it ensured stable supplies for the winter heating season and alleviated budgetary pressures on state-owned Ukrainy. The deal temporarily lowered energy costs but maintained structural dependence without advancing domestic production or unbundling reforms demanded by international lenders like the IMF. Infrastructure efforts emphasized continuity of transport and utility upgrades under the State Agency for Investment and Management of National Projects, which oversaw initiatives from 2012 through 2014. The government allocated resources for cross-border transport projects aligned with the EU's Trans-European Transport Network (TEN-T), including rail and inland waterway improvements linked to the Danube Strategy, with total infrastructure spending reaching €4 billion during the period. Specific advancements included planning for multimodality enhancements in eastern corridors and municipal projects such as expansions to the Kyiv Metro system. These measures aimed to integrate Ukraine into European logistics but faced delays due to fiscal constraints and external economic shocks.

Diplomatic and Regional Engagements

The Second Azarov government emphasized pragmatic diplomatic outreach to and regional partners to address Ukraine's acute economic vulnerabilities, including a foreign reserves deficit exceeding $20 billion by late and looming default risks. advocated for a multi-vector approach but prioritized negotiations yielding immediate financial over long-term EU integration commitments, which carried stringent IMF-mandated conditions. This orientation facilitated bilateral talks with Russian counterparts, culminating in high-level engagements aimed at energy pricing and trade stabilization. A pivotal achievement was the December 17, 2013, agreement reached during President Viktor Yanukovych's visit with Russian President , where committed to purchasing $15 billion in Ukrainian Eurobonds and cutting natural gas export prices from $400 to $268 per 1,000 cubic meters—a discount valued at roughly $3-5 billion annually. Azarov, who coordinated preparatory discussions, publicly hailed the pact as "historic," asserting it resolved Ukraine's payment for Russian gas arrears (over $2 billion) and provided liquidity without the fiscal tightening demanded by Western lenders. The deal was framed by the government as evidence of successful in leveraging Ukraine's strategic position to secure concessions, averting an imminent Azarov warned could otherwise materialize by early 2014. Regional engagements extended to frameworks like the (CIS) and nascent Eurasian integration structures, where Azarov's cabinet explored observer status or selective alignment with the Russia-led to mitigate trade disruptions. In August 2013, amid Russian import curbs on Ukrainian steel and machinery that halved volumes earlier that year, Azarov proposed Ukraine's participation in specific protocols on technical standards and customs procedures, signaling intent to normalize regional economic ties without full membership. These overtures built on prior Interstate Commission sessions, such as the July 2012 review under Azarov's oversight, which advanced cooperation in and infrastructure across . statements positioned such steps as balancing EU aspirations with geographic and market realities, though they drew criticism for conceding to Russian economic coercion tactics like targeted embargoes. Domestically, these diplomatic outcomes were touted as stabilizing Ukraine's gas-dependent , with the price reduction projected to save $5-6 billion in 2014 imports alone and underpin industrial output in eastern regions. Azarov reiterated openness to resumed talks post-crisis, but prioritized the Russian lifeline's tangible benefits, including deferred payments on prior debts. While the engagements underscored the government's realism in navigating asymmetric dependencies— imported 60-70% of its gas from —their short-term focus later amplified domestic divisions over foreign alignment.

Criticisms and Controversies

Allegations of Corruption and Cronyism

The second Azarov government, formed on December 24, 2012, faced immediate accusations of entrenching through the appointment of loyalists from the , marking a shift from oligarchic influence to state favoritism toward President Yanukovych's inner circle. Analysts described the as consolidating power among uncompetitive bureaucrats and allies, sidelining broader expertise in favor of personal ties, which exacerbated perceptions of and reduced merit-based . Allegations intensified around the Azarov family's business interests, with 's son, Oleksiy Azarov, a parliamentary , implicated in leveraging government influence for personal gain. In 2012, while Mykola Azarov held executive power, Oleksiy established 26 offshore companies in the , structures later scrutinized in the for potential illicit financial flows amid Ukraine's economic policies. Oleksiy faced probes for embezzling state funds through rigged customs and tax schemes, including allegations of monopolizing imports via politically connected firms that evaded duties worth millions. These claims prompted international actions, such as Austria's 2014 money-laundering investigation into Oleksiy and asset freezes by and the on both Azarovs for suspected corruption enabling . The government was broadly criticized for policies that facilitated crony enrichment, including selective tax amnesties and contracts awarded to affiliates, despite Azarov's public pledges to combat graft. Opposition and international observers, including the , highlighted Azarov's failure to implement reforms, with state resources allegedly diverted to sustain the regime's networks amid fiscal strain. Post-resignation probes, such as those into improper budget reallocations under Azarov's oversight, underscored systemic favoritism, though evidentiary challenges led to some sanctions being lifted by 2015 due to insufficient prosecutions. These allegations, rooted in documented financial opacity and familial conflicts of interest, contributed to public distrust culminating in the unrest.

Economic Policy Shortcomings and IMF Resistance

The Second Azarov government, formed on December 11, 2012, inherited an economy marked by decelerating growth and mounting fiscal pressures, with GDP expanding by only 0.2% in 2012 amid external shocks like high energy import costs from . By the third quarter of , industrial output had contracted by 4.4%, signaling deepening stagnation driven by insufficient structural adjustments and overreliance on subsidized imports, which strained public finances without corresponding productivity gains. Critics attributed these shortcomings to the government's preference for short-term fiscal patches, such as selective tax deferrals and off-budget spending, over comprehensive reforms to curb inefficiencies in state-owned enterprises, which consumed disproportionate resources. Inflation accelerated to 0.9% in 2013, fueled by monetary accommodation of deficits projected at 5.75% of GDP for the year, as the government avoided cuts to subsidies that covered up to 80% of household gas costs, exacerbating hidden fiscal liabilities estimated at 7-10% of GDP. This resistance to rationalization reflected a broader policy failure to address Ukraine's chronic current account deficits, averaging 6-7% of GDP, through diversification away from exports and toward value-added sectors, leaving the vulnerable to volatility and Russian leverage. The administration's incremental approach, including delayed and selective hikes for public sector workers, prioritized political stability over long-term solvency, contributing to a buildup of that reached 40% of GDP by late 2013. Negotiations with the IMF for a standby arrangement intensified in , as Ukraine faced a $15 billion external financing gap, but the government balked at key conditions including a 40-50% hike in household gas tariffs to market levels and tightened fiscal rules to cap deficits at 3.5% of GDP. Azarov publicly criticized the IMF's terms as overly stringent, arguing on , , that they disregarded Ukraine's social realities and echoed unfeasible demands from prior and programs, which had only been partially implemented. This stance delayed a potential $15 billion IMF package, prompting instead a December 17, 2013, agreement for a $15 billion Russian at 5% interest without reform strings, which Azarov hailed as a pragmatic alternative but which analysts viewed as deferring inevitable adjustments at the cost of heightened geopolitical dependency. The IMF's October 2013 mission report underscored these policy gaps, noting inadequate progress on banking sector cleanup and revenue mobilization, with tax collection stagnating at 28% of GDP due to evasion and weak enforcement. By resisting tariff reforms, the government preserved populist support but amplified fiscal risks, as Naftogaz's arrears to ballooned to $2 billion, threatening and contributing to a 2014 currency devaluation of over 50%. This pattern of evasion exemplified causal shortcomings in economic governance, where avoidance of market-oriented pricing perpetuated inefficiency in a subsidies-dependent system, ultimately undermining macroeconomic stability without alternative revenue or export strategies in place.

Handling of Protests and Authoritarian Drift

The Second Azarov Government initially permitted peaceful demonstrations in Kyiv's following the 21 November 2013 suspension of preparations for the EU-Ukraine Association Agreement, with stating on 3 December 2013 that the administration would avoid violence against non-violent protesters while expressing readiness for dialogue. However, on 30 November 2013, special police units known as Berkut forcibly dispersed the encampment, injuring at least 35 protesters including students, an action attributed to government orders that triggered widespread outrage and broadened the protests into demands for Azarov's and systemic reforms. Azarov's public rhetoric framed the escalating movement as destabilizing, warning on 2 December 2013 of "all the signs of a coup" and alleging plans to seize , while on 4 December 2013 claiming the original protest triggers had been addressed and urging the opposition against further escalation. By 22 January 2014, amid intensifying clashes, Azarov labeled Maidan participants "terrorists," reflecting a hardening stance that prioritized order over concessions despite opposition calls for his ouster. This approach contributed to perceptions of authoritarian entrenchment, as the government showed limited interest in compromising with demonstrators or political opponents. A pivotal escalation occurred on 16 January 2014, when the , dominated by the ruling Party of Regions, enacted a package of 11 laws restricting assembly and expression rights without quorum verification or opposition input, including bans on unauthorized tents, stages, sound equipment in public spaces, and face coverings during protests, with penalties up to 15 years imprisonment for related offenses like occupying buildings. President signed these measures into law on 17 January 2014, prompting international condemnation from organizations like and as a " for " that violated Ukraine's and international commitments on free speech and peaceful assembly. The laws' rushed passage and content—such as criminalizing protest organization without permits and expanding libel penalties—exemplified authoritarian drift, enabling broader suppression amid the government's resistance to electoral or judicial reforms demanded by protesters. Implementation of these "anti-protest" laws fueled immediate violence, including clashes on 19-20 2014 in where Berkut forces used and stun grenades against demonstrators, resulting in at least four protester deaths and hundreds injured, further eroding public trust in the Azarov administration's commitment to democratic norms. Facing mounting pressure, repealed most of the laws on 28 2014, coinciding with Azarov's , which he presented as a gesture for "social-political " though protesters dismissed it as insufficient amid ongoing demands for . This sequence underscored a pattern of reactive authoritarian tactics—rhetorical demonization, legislative curbs on dissent, and security force deployment—that prioritized regime preservation over de-escalation, ultimately accelerating the government's collapse.

Dissolution

Euromaidan Protests and Triggers

The protests began on the evening of 21 in Kyiv's (Independence Square), triggered by President Viktor Yanukovych's announcement earlier that day suspending preparations for signing the Association Agreement with the at the Summit in , , scheduled for 28–29 . This decision, formalized by the Second Azarov government under Prime Minister , represented an abrupt pivot toward economic integration with through the Eurasian Customs Union, following Yanukovych's recent consultations with Russian President , who offered financial aid and trade concessions to deter the EU pact. The government's refusal to proceed with the agreement, after over three years of negotiations, was perceived by demonstrators as a capitulation to Russian pressure and a reversal of Ukraine's pro-European trajectory, exacerbating public frustration with the Yanukovych administration's perceived , , and economic mismanagement. Initial gatherings drew around 1,500–2,000 participants, primarily students and urban professionals, who waved flags and chanted against the government's pro-Russian shift, with protests quickly spreading to other cities like and . Underlying triggers included the Second Azarov government's broader policies, such as selective prosecutions of opposition figures like former —which the had cited as a precondition for signing—and resistance to demands for austerity measures, which fueled perceptions of cronyism and elite self-enrichment amid Ukraine's economic stagnation, with GDP growth slowing to 0% in 2013. Protesters framed the EU snub not merely as a failure but as symptomatic of domestic governance failures, including media censorship and electoral irregularities under the Party of Regions-dominated administration. By 24 November, demonstrations had swelled to tens of thousands, signaling the movement's rapid escalation from a focused EU integration demand to a wider challenge against the Azarov government's legitimacy.

Government Response and Escalation

The Ukrainian government's initial response to the protests intensified after the violent clearance of Kyiv's Independence Square by Berkut special police forces on the night of November 29–30, 2013, which resulted in dozens of beatings of protesters and journalists, prompting a surge in demonstrations from hundreds to hundreds of thousands. Officials, including Vitali Zakharchenko, justified the operation as necessary to restore order amid reports of , but the action was widely criticized internationally and domestically for its brutality, leading to the occupation of additional government buildings and barricades. , on December 2, 2013, publicly admitted the government's helplessness in managing the unrest, appealing for renewed EU negotiations while avoiding direct concessions to protesters. Attempts at , such as negotiations mediated by opposition leaders, faltered amid mutual , with the maintaining a stance; Azarov later characterized protesters as "terrorists" in public statements, signaling reluctance to compromise. By mid-January 2014, as protests spread and radicalized, the —dominated by the ruling Party of Regions—passed a series of ten restrictive laws on January 16, often referred to as "dictatorship laws," which banned unauthorized tents, sound equipment, and face masks at gatherings, imposed severe penalties for assembly violations, and criminalized libel against officials. These measures, approved by a show of hands amid procedural irregularities and signed into law by President on January 17, were intended to curb disruptions but instead provoked widespread outrage and violent retaliation from demonstrators. The enactment of these laws triggered immediate escalation, with clashes erupting on Kyiv's Hrushevskyi Street starting January 19, where protesters hurled Molotov cocktails and stones at advancing security forces, who responded with , stun grenades, and water cannons in subzero temperatures, resulting in the first fatalities from protester injuries on January 22. Government forces, bolstered by interior ministry troops, encircled protest sites and imposed blockades, while reports emerged of coordinated attacks by plainclothes enforcers (titushky) on demonstrators, further eroding public trust and drawing accusations of authoritarian overreach. This cycle of repression and resistance, with over 100 injuries documented in the January clashes alone, hardened positions on both sides, setting the stage for deadlier confrontations in .

Resignation and Immediate Aftermath

On January 28, 2014, Prime Minister tendered his , citing the need for a peaceful settlement to the escalating civil unrest triggered by the protests. President accepted the that evening via , extending it to the entire cabinet of ministers, though officials were to remain in acting capacities pending new appointments. The same day, Ukraine's parliament voted overwhelmingly to repeal the controversial anti-protest laws enacted earlier in January, which had intensified the violence. Serhiy Arbuzov, Azarov's first deputy prime minister and former head of the , was immediately designated as to oversee the caretaker government. Azarov, a longtime ally of Yanukovych and architect of pro-Russian economic policies, left hours after the announcement, flying to via private jet to join family members. The resignation failed to quell the demonstrations, as protesters rejected it as an inadequate concession and intensified calls for Yanukovych's removal, early elections, and accountability for police violence. Clashes persisted in Kyiv's Square and other cities, with opposition leaders dismissing the government's moves as tactical delays rather than substantive . In the ensuing days, passed additional measures, including for detained protesters and the dismissal of key security officials, but these did little to prevent further escalation toward deadly confrontations in early . Azarov's departure marked the beginning of an exodus by high-ranking Yanukovych administration figures, amid growing scrutiny of alleged corruption and abuse of power.

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