Zelenskiy names new prime minister, taps official who spearheaded US minerals deal

KYIV (Reuters) -Ukrainian President Volodymyr Zelenskiy asked First Deputy Prime Minister Yulia Svyrydenko on Monday to lead a new government, setting the stage for a political reshuffle as Ukraine's war with Russia raged on.

Zelenskiy also proposed that Ukraine's current prime minister, Denys Shmyhal, take over as defence minister, describing him as holding the right qualifications for a very important job.

The nominations, which require parliamentary approval, came as diplomatic efforts to end the war, now in its fourth year, have stalled and as Ukraine seeks to revive its cash-strapped economy and build up a domestic arms industry.

"We ... discussed concrete measures to boost Ukraine's economic potential, expand support programs for Ukrainians, and scale up our domestic weapons production," Zelenskiy wrote on X.

"In pursuit of this goal, we are initiating a transformation of the executive branch in Ukraine," he said, adding that he had proposed that Svyrydenko lead the government and "significantly renew its work".

Svyrydenko, 39, is an economist and has served as first deputy prime minister since 2021. She played a key role in recent negotiations for a minerals deal with the United States.

In his nightly video address, Zelenskiy praised Shmyhal's "vast experience" as very "valuable in the position of minister of defence of Ukraine."

"This is precisely the area where the country's maximum resources, maximum tasks and a great deal of responsibility are currently concentrated," he said.

Shmyhal has served as prime minister since March 2020, making him the longest-serving head of government since the country gained its independence from Moscow in 1991 amid the collapse of the Soviet Union.

He would replace Rustem Umerov, who Zelenskiy suggested last week could be named Ukraine's ambassador to Washington.

Ukraine relies on financial aid from its Western allies to finance social and humanitarian spending as the bulk of state revenues go to fund the army and domestic weapons production.

FINANCING THE ARMS INDUSTRY

Ukrainian officials have also urged Kyiv's partners to help finance the country's arms industry, including through joint defence projects.

In his address, Zelenskiy said Ukraine would continue to "boost production of its own weapons and develop its own defence projects -- our own Ukrainian and jointly with our partners".

Writing on X, Svyrydenko said she would pursue deregulation, cut back bureaucracy, protect business and reduce non-critical expenditure to achieve the "full concentration of state resources" for defence and post-war recovery.

"The state apparatus has no right to waste the resources and potential of our country," she said. "Ukraine deserves to be among the strongest economies in Europe."

(Reporting by Dan Peleschuk; Writing by Dan Peleschuk; Editing by Kevin Liffey, Gareth Jones, Ron Popeski and Cynthia Osterman)