KIEV, Jan. 18 – President Viktor Yanukovych on Wednesday accepted the resignation of Finance Minister Fedir Yaroshenko, in a sweeping reshuffle that signals major changes in Ukraine’s financial and economic policies.

Yaroshenko was quickly replaced with Valeriy Khoroshkovskiy, who had been earlier Wednesday dismissed as the head of the SBU security service.

Yaroshenko submitted the resignation at a meeting with Yanukovych and after citing unspecified “problems.” He also assured Yanukovych of his commitment to the president’s economic policies.

“We have created a strong collective at the ministry, and I am glad we have been fulfilling all assignments,” Yaroshenko told Yanukovych, according to a statement released by the presidential press service. “But, of course, always there are problems.”

“I wish the next finance minister make less mistakes and work more efficiently,” Yaroshenko said.

Yaroshenko, who led the finance ministry since March 2010, is believed to be a long-time ally of Prime Minister Mykola Azarov. His resignation would most definitely weaken positions of the prime minister, analysts said.

Azarov, asked by reporters to comment on the resignation of Yaroshenko, has refused to do so, and said he will address the issue at a press conference on Friday.

Azarov has long been criticized by Deputy Prime Minister Serhiy Tyhypko and National Bank of Ukraine Governor Serhiy Arbuzov for the government’s policy that had resulted in a failure over the past 12 months to resume cooperation with the International Monetary Fund.

On the other hand, the appointment of Khoroshkovskiy is strengthening the clout of a group in the government that is thought to be affiliated with Ukrainian billionaire Dmytro Firtash.

The group, which is thought to also include Energy and Coal Industry Minister Yuriy Boyko and the chief of the presidential administration, Serhiy Liovochkin, among other senior government officials, now appears to be even more powerful in shaping Ukraine’s economic policies.

Yaroshenko was among a team government officials that had been in charge of negotiations with the IMF over resumption of $15.3 billion loan from the IMF.

Former Finance Minister Viktor Pynzenyk said the government had successfully managed to improve fiscal discipline over the past 12 months, cutting budget deficit to 3% of the gross domestic product in 2011 from 11.4% in 2010 and 8.4% in 2009.

“There is not a bad progress in the budget compared with previous years,” Pynzenyk said. “The budget has a deficit that is less than expected.”

But Ukraine’s economic problems shifted to other areas, such as massive foreign debt and the government’s apparent inability to arrange financing that would help to alleviate the problem.

“The focus of problems has shifted,” Pynzenyk said. “Before, I saw a major headache with the budget deficit, but now other problems emerge to the surface. Firstly, it’s servicing of the foreign debt.”

Pynzenyk estimated Ukraine’s overall foreign debts at $123 billion, of which $52 billion, he said, have to be paid during the next 12 months.

“This sum exceeds foreign exchange reserves,” Pynzenyk said. (tl/ez)