Azarov vote will be first test for Ukraine ruling party

(Reuters) - A vote on the nomination of Mykola Azarov for prime minister will be the first test of the cohesion of political forces underpinning Ukrainian President Viktor Yanukovich when a new parliament holds its opening session on Wednesday.

Yanukovich's pro-business Party of the Regions enjoyed a strong majority with allies in the last parliament which allowed it to ram through key legislation such as changes to electoral law, successive budgets and a law on the use of the Russian language which triggered street protests.

But though it is still the biggest single party, it lost seats in the October 28 election. And though most analysts think horse-trading will bring it enough support from independents and others for a majority of 226 or more seats in key votes, it nonetheless faces a revitalized opposition whose leaders have ruled out any coalition with the Regions.

New opposition faces taking the oath on Wednesday will include world heavyweight boxing champion Vitaly Klitschko, who heads the UDAR (Punch) party, and Oleh Tyahnybok, leader of the Svoboda far-right nationalists who made a surprisingly strong showing in the October poll.

Former economy minister Arseny Yatsenyuk heads the Batkivshchyna (Fatherland) bloc in the absence of imprisoned former prime minister Yulia Tymoshenko.

After parliament appoints a new speaker on Wednesday, attention will swing to the vote on Azarov, a staid 64-year-old conservative who has been prime minister since Yanukovich was elected in February 2010 and whom Yanukovich tapped for a second term on Sunday.

The Regions hold 185 seats in parliament following the election - slightly down on representation in the old parliament.

But its faction leaders have expressed confidence they can enlist enough support from among the 40 or so "independents" as well as from communist ranks to secure the needed 225 plus majority in the 450-seat chamber.

"Azarov has almost 100 percent chances of receiving the approval of parliament. There are enough votes on the president's side for Azarov because the communists will get the post of vice-speaker and will vote for Azarov," said Mikhailo Pogrebinsky of the Kiev centre for political research think-tank. "All doubt has been removed," he added.

BRUISING YEAR AHEAD

By nominating Azarov for a second term as prime minister, Yanukovich opted to keep a predictable loyalist by his side rather than back other more risky variants.

The economy might be facing a bruising year next year while Yanukovich himself is gearing to run for a second term as president in 2015.

An early challenge for Azarov will be to negotiate a new bailout program from the International Monetary Fund to follow a $15 billion package which was suspended in early 2011.

An IMF mission is due to visit late in January for what are expected to be tough talks on nailing down a new stand-by arrangement to help Ukraine repay, or refinance, more than $9 billion debt falling due to foreign creditors in 2013.

Apart from the debt repayment crunch, the former Soviet republic faces weakening world demand for its traditional exports such as steel and chemicals.

High prices for natural gas from Russia, which the Azarov government has so far failed to persuade Moscow to bring down, remain a drag on economic performance.

Opposition parties have welded together an action program in which they have threatened Yanukovich with impeachment and vowed to work to free Tymoshenko, who was jailed more than a year ago for alleged abuse of office while prime minister.

She has denied wrongdoing and says she is the victim of a political vendetta by Yanukovich.

But there are rivalries too among the leaders of the opposition parties which could endanger any unity of purpose in the long run.