IN TSARSKOE SELO (“Tsar’s Village”), a smart district in Kiev, Ukraine’s president, Petro Poroshenko, owns a swathe of desirable land. Across the street sits a sprawling compound belonging to Ihor Kononenko, the president’s friend and deputy head of his parliamentary faction. The two men met during their Soviet army service. After Ukraine gained independence they rose together in business and politics. Last week Ukraine’s economy minister, Aivaras Abromavicius, resigned, accusing Mr Kononenko of obstructing reform. Mr Abromavicius said he refused to cover for officials who, “very much like the old government, are trying to exercise control over the flow of public funds”.

Ukraine’s Maidan revolution was supposed to roll back corruption and cronyism. Mr Abromavicius, a Lithuanian-born investment banker, was one of several foreigners invited into government to change the old ways. He ran up against vested interests in the circles of both the president and the prime minister, Arseniy Yatsenyuk (pictured, being uncomfortably hoisted during a brawl in parliament). Mr Abromavicius is the second economy minister since the revolution to quit for similar reasons, and the fifth minister to resign from the current government. Western ambassadors lamented his departure. In unusually blunt language, Christine Lagarde, the head of the International Monetary Fund (IMF), threatened an end to Ukraine’s $18 billion bail-out programme “without a substantial new effort to invigorate governance reforms and fight corruption”. Following Ms Lagarde’s comments, Mr Poroshenko pledged to do more.

Yuri Lutsenko, the head of Mr Poroshenko’s parliamentary bloc, says the country now faces a “full-blown political crisis”. A cabinet shake-up is inevitable. A collapse of the ruling coalition and early parliamentary elections look increasingly likely. Ukraine’s Western allies argue that elections would be destabilising and open the door to radicals and populists. Yet an exasperated public may demand them. At stake is Ukraine’s chance of moving past its history of post-Soviet misrule.

Mr Abromavicius’s problems mounted last year after his ministry was given control over Naftogaz, the state gas firm, and the power to appoint chief executives at the 60 top state-owned enterprises (SOEs). Ukraine’s SOEs exemplify the crooked relationship between business and government: interest groups in parliament install “loyal” managers who funnel cash to oligarchs and political parties. Mr Abromavicius says he was pressured to let these appointments go through. His security detail was abruptly cut off for several weeks. The “tipping point” came when Mr Kononenko demanded that he appoint a crony as his deputy minister. (Mr Kononenko declined to comment.)

Figures like Mr Kononenko abound in Ukraine’s parliament; locals call them “grey cardinals” or lyubi druzi (“dear friends”). The lines between friends, business partners, relatives and political allies are blurred, says Mr Abromavicius, and reforms have stalled. “It’s not a technical problem, it’s a political problem,” says one foreign adviser to the government.

Dissatisfaction with the country’s direction is rising and trust in the authorities is falling (see chart). Not a single government institution has a positive trust rating, according to the Kyiv International Institute of Sociology. Investors are worried, says Tomas Fiala, the head of Dragon Capital, Ukraine’s largest investment bank. Bond yields have spiked in the past week.