Coalition agreement on hold until June Viktor Yushchenko puts Ukraine’s economic and political future development future at risk

April 30, 2006

Ukraine’s President, Viktor Yushchenko, has indicated that a coalition agreement may not be singed until June 2006.
LINK For-ua.com

Whilst other players have all signed agreements on the formation of a coalition government Our Ukraine which is spearheaded by Ukraine’s President has to date refused to sign any agreement. Under dispute is Ukraine’s choice of Prime-minister and other cabinet positions.

Yulia Timoshenko party and the Socialist Party of Ukraine both who are part of the Orange coalition have agreed to the formation of an Orange coalition with Yulia Tymoshenko who received 22% of the Parliamentary vote taking the Prime-ministers position and the leader of the Socialist Party ( 7.5%) as the Parliamentary Chairman/Speaker.

On the surface of it this proposal seams fair and justified given that Our Ukraine who only received 14% of voters support currently holds the Presidency.

Problem is Our Ukraine are not happy about Yulia Tymoshenko being re-appointed as Prime Minister.  Yulia Tymoshenko was sacked by Viktor Yushchenko last year following Yulia’s allegations of corruption in the Our Ukraine ministerial and Presidential offices.

The announcement by the President that a coalition agreement would not be agreed to until June seriously undermines Ukraine’s economic and political stability. 

Uncertainty and procrastination only undermine Ukraine’s future

If the parties can not quickly and amicable agree to a coalition within the first week of Parliament sitting then it all over but for the shouting.  Yushchenko and Our Ukraine would have singly handed destroyed the Orange Revolution before it started. What confidence can their be in any marriage when it starts off on a bad footing? 

Any delay in the formation of a government would be a disaster for Ukraine and Ukraine’s democratic development. 

loss of confidence would seriously effect Ukraine’s economy with Ukraine potentially facing meltdown.

The President, who is currently travelling around the Baltic countries, should be back in Ukraine trying to avoid any possible fall-out as a result of his parties failure to sign up to a working coalition.  The formation of a working coalition government should and must be his first priority.

It is of serious concern that the president is prepared to place at risk Ukraine’s economic and p[locity development for the sake of power politics.

Politics is the art of compromise

Our Ukraine needs to decide if they support the formation of an Orange coalition or they don’t. With any coalition the division of power needs to be balanced and given the outcome of the results of the election the proposal on the table that has been signed by all parties involved in the Orange camp except Our Ukraine is reasonable.

Our Ukraine with only 14% of voters support is not in the position to make unrealistic demands.  They already have the Presidency and they must now demonstrate that they are reasonable and considerate and prepared to work together for the sake of Ukraine and not just the interest of a minor party.

If they can not agree and live up to the ideals of the orange movement then they should form a coalition with the Party or Regions.

Fresh elections out of the question.

History shows that disunity and indecisiveness is the death of any government. The other alternative of holding fresh elections would be a disaster.  Our Ukraine would be the biggest loser as the costs of holding fresh elections are prohibitive and are unlikely to produce a different outcome other then provide Party of Regions with the opportunity of a clean sweep win.  

Politics aside.

The most important at risk in Our Ukraine’s procrastination and refusal to agree to a coalition is Ukraine’s economy.  To weeks is a long time in politics and two moths is even longer in terms of economic stability.

 
Ukraine: Can the markets take it?
If, as LEvko reports, this mess won’t be sorted out until June, will the markets hold still for that? That is a long time for politics and an eternity for markets. Will there be any confidence in the government after all that? It is quite possible that any confidence could evaporate and start a selloff. It happened in the 90s in both Mexico and Venezuela for a lot less.

A rapid devaluation of the currency is not a pretty thing. I was in Venezuela when it happened there. The bolivar crashed, there was a run on the dollar and that caused the central bank to put controls on dollar buys. They needed to do this to be able to use dollars to control the descent (soaking up the bolivars on the market requires buying with dollars) and dollars reserves are needed to pay for goods coming in the the country.

The restrictions pretty much put a halt on imports. I talked with a grain trader at one point and he said the whole country was down to a 3 days supply of wheat. And the owners of any tankers with wheat bound for Venezuelan ports were seriously considering turning them back around because they thought they wouldn’t get paid when the grain landed.

People tend to get surly when they get hungry and the Venezuelans have been known to riot. The owners didn’t turn them back in the end and there were no riots and Venezuela came through it but came butt up against nationalism. Enter Hugo Chavez. Not a good ending, really.

I hope it doesn’t happen here (and I should add, there are many, many reasons why it shouldn’t.) But one thing is for certain: The parties on all sides believe they are in a fight to the death with their opponents only and with no others. But there are other interests and other actors who also have a say in what happens in Ukraine. The politicians here need to take that into account in their deliberations and in their public statements. Because those other actors, acting on the basis of self interest, criticize it for that reason as we will, can have a very significant effect on the lives of Ukrainians. (That has been my point with the very careless— irresponsible, really— way the investment situation here has been handled.)

But noting what has been said and done in the past, I won’t be holding my breath.

 

Coalition agreement on hold until June Viktor Yushchenko puts Ukraine’s economic and political future development future at risk

April 30, 2006

Ukraine’s President, Viktor Yushchenko, has indicated that a coalition agreement may not be singed until June 2006.
LINK For-ua.com

Whilst other players have all signed agreements on the formation of a coalition government Our Ukraine which is spearheaded by Ukraine’s President has to date refused to sign any agreement. Under dispute is Ukraine’s choice of Prime-minister and other cabinet positions.

Yulia Timoshenko party and the Socialist Party of Ukraine both who are part of the Orange coalition have agreed to the formation of an Orange coalition with Yulia Tymoshenko who received 22% of the Parliamentary vote taking the Prime-ministers position and the leader of the Socialist Party ( 7.5%) as the Parliamentary Chairman/Speaker.

On the surface of it this proposal seams fair and justified given that Our Ukraine who only received 14% of voters support currently holds the Presidency.

Problem is Our Ukraine are not happy about Yulia Tymoshenko being re-appointed as Prime Minister.  Yulia Tymoshenko was sacked by Viktor Yushchenko last year following Yulia’s allegations of corruption in the Our Ukraine ministerial and Presidential offices.

The announcement by the President that a coalition agreement would not be agreed to until June seriously undermines Ukraine’s economic and political stability. 

Uncertainty and procrastination only undermine Ukraine’s future

If the parties can not quickly and amicable agree to a coalition within the first week of Parliament sitting then it all over but for the shouting.  Yushchenko and Our Ukraine would have singly handed destroyed the Orange Revolution before it started. What confidence can their be in any marriage when it starts off on a bad footing? 

Any delay in the formation of a government would be a disaster for Ukraine and Ukraine’s democratic development. 

loss of confidence would seriously effect Ukraine’s economy with Ukraine potentially facing meltdown.

The President, who is currently travelling around the Baltic countries, should be back in Ukraine trying to avoid any possible fall-out as a result of his parties failure to sign up to a working coalition.  The formation of a working coalition government should and must be his first priority.

It is of serious concern that the president is prepared to place at risk Ukraine’s economic and p[locity development for the sake of power politics.

Politics is the art of compromise

Our Ukraine needs to decide if they support the formation of an Orange coalition or they don’t. With any coalition the division of power needs to be balanced and given the outcome of the results of the election the proposal on the table that has been signed by all parties involved in the Orange camp except Our Ukraine is reasonable.

Our Ukraine with only 14% of voters support is not in the position to make unrealistic demands.  They already have the Presidency and they must now demonstrate that they are reasonable and considerate and prepared to work together for the sake of Ukraine and not just the interest of a minor party.

If they can not agree and live up to the ideals of the orange movement then they should form a coalition with the Party or Regions.

Fresh elections out of the question.

History shows that disunity and indecisiveness is the death of any government. The other alternative of holding fresh elections would be a disaster.  Our Ukraine would be the biggest loser as the costs of holding fresh elections are prohibitive and are unlikely to produce a different outcome other then provide Party of Regions with the opportunity of a clean sweep win.  

Politics aside.

The most important at risk in Our Ukraine’s procrastination and refusal to agree to a coalition is Ukraine’s economy.  To weeks is a long time in politics and two moths is even longer in terms of economic stability.

 
Ukraine: Can the markets take it?
If, as LEvko reports, this mess won’t be sorted out until June, will the markets hold still for that? That is a long time for politics and an eternity for markets. Will there be any confidence in the government after all that? It is quite possible that any confidence could evaporate and start a selloff. It happened in the 90s in both Mexico and Venezuela for a lot less.

A rapid devaluation of the currency is not a pretty thing. I was in Venezuela when it happened there. The bolivar crashed, there was a run on the dollar and that caused the central bank to put controls on dollar buys. They needed to do this to be able to use dollars to control the descent (soaking up the bolivars on the market requires buying with dollars) and dollars reserves are needed to pay for goods coming in the the country.

The restrictions pretty much put a halt on imports. I talked with a grain trader at one point and he said the whole country was down to a 3 days supply of wheat. And the owners of any tankers with wheat bound for Venezuelan ports were seriously considering turning them back around because they thought they wouldn’t get paid when the grain landed.

People tend to get surly when they get hungry and the Venezuelans have been known to riot. The owners didn’t turn them back in the end and there were no riots and Venezuela came through it but came butt up against nationalism. Enter Hugo Chavez. Not a good ending, really.

I hope it doesn’t happen here (and I should add, there are many, many reasons why it shouldn’t.) But one thing is for certain: The parties on all sides believe they are in a fight to the death with their opponents only and with no others. But there are other interests and other actors who also have a say in what happens in Ukraine. The politicians here need to take that into account in their deliberations and in their public statements. Because those other actors, acting on the basis of self interest, criticize it for that reason as we will, can have a very significant effect on the lives of Ukrainians. (That has been my point with the very careless— irresponsible, really— way the investment situation here has been handled.)

But noting what has been said and done in the past, I won’t be holding my breath.

 

Our Ukraine and Party of Region Coalition Agreement has been made on the formation of a coalition to govern Ukraine

April 28, 2006

It is always hard knowing what is true and what is not but this article was recently published and is widely circulating around the media.

This sort of speculation is rife in Ukraine and the longer Our Ukraine delay in formulating a coalition the the more confidence in Ukraine’s political and economic development is undermined.

Victor Yushchenko, Ukraine’s President MUST call for a quick decision on the formation of Ukraine’s Government, even if this means compromise on their close of Prime Minister or coalition partners.

Whilst the impact of this indecisiveness has not yet become apparent the longer uncertainty drags on the greater the impact. The President MUST put an end to the uncertainty as soon as possible and before the Markets and international community begin to take flight.

KIEV, April 28 (Itar-Tass) — The pro-presidential Our Ukraine bloc and the opposition Party of Regions, led by Viktor Yanukovich, have agreed on the formation of a coalition in the new Supreme Rada (parliament) of Ukraine. This sensational report was circulated on Friday by a number of electronic mass media organs of Ukraine with reference to reliable sources.

Regions, led by Viktor Yanukovich, have agreed on the formation of a coalition in the new Supreme Rada (parliament) of Ukraine. This sensational report was circulated on Friday by a number of electronic mass media organs of Ukraine with reference to reliable sources.

According to their information, the parties reached agreement on Thursday night that Sergei Taratuta, chairman of the board of directors of the Industrial Union of Donbass Corporation and one of the three Ukrainian multimillionaires, would be nominated to the post of prime minister.

President Viktor Yushchenko, who is in Latvia on a visit, sent a message from there on Thursday giving his consent to the formation of a coalition by Our Ukraine and the Party of Regions, the sources report.

The political council of the Party of Regions adopted a resolution at its meeting on Thursday, which said that the party would hold talks on the formation of a parliamentary coalition with all the political forces, qualified for the new Supreme Rada, without exception. Yanukovich expressed confidence that the coalition formed by Our Ukraine and the Party of Regions could be the most effective.

Previously the observers forecast that Taratuta could well be regarded as a candidate to the post of prime minister. In their opinion, he will be a “technical premier,” because he does not have “clear political orientation.” This is exactly the thing that could suit both Our Ukraine and the Party of Regions. On the one hand, Taratuta comes from Donetsk. On the other hand, he supported the “orange revolution.”

The Party of Regions got 32.14 per cent of votes (186 seats in parliament) at the March 26 parliamentary elections. The Yulia Timoshenko bloc got 22.29 per cent of votes (129 seats). The pro-presidential Our Ukraine bloc, with Prime Minister Yuri Yekhanurov on the top of the electoral list, got 13.95 per cent of votes (81 seats). The Socialist Party led by Alexander Moroz got 5.69 per cent of votes (33 seats), and the Communist Party led by Peter Simonenko got 3.66 per cent of votes (21 seats). There are 450 seats in the Ukrainian parliament. A minimum of 226 Mph is needed for forming a parliamentary majority. If Our Ukraine and the Party of Regions form a coalition, it will have a total of 267 seats.


Final Results Following the unsuccessful outcome of court challenge

April 27, 2006
Following the determination of the courts the following is the final results of the March 26 Election campaign.

The Parliament must meet within 2 weeks from the offial publication date and then they have 30 days to form a coalition. Should a coalition not be able to be formed the President has the right to call for fresh elections. The holding of fresh elections is unlikely as the political fall out and costs is considerable. It is most likely that an Orange coalition of convenience will be formed in the first instance. With the passage of time (12 months) The President’s party Our Ukraine’ may withdraw from the coalition causing a constitutional crises and justification for the President to call fresh elections. With the election over Ukraine is expected to undergo major economic changes in the near future. Local prices will rise and inflation will continue in the double digits as Ukraine’s economy begins to suffer. If the President, Our Ukraine and the Party of Regions can successfully focus the blame on to Yulia Tymoshenko’s block then A fresh election in 12 months would be to their advantage. Big issues will be the increase in the cost of living, economic changes required for Ukraine to join the WTO, NATO and possible future EU membership.

Another alternative is that coalition negoitions break down with Our Ukraine spititting and agreeing to form a coalition with Party of Regions. There only needs to be a shift of 12 to 13 votes for their to be a change in government.

http://www.cvk.gov.ua/vnd2006/w6p001e.html


Source CEC Final Results
Date April 27, 2006 Poll Date: March 26, 2006
Name of the party or electoral bloc
PR Party of Regions (PR)
NS-NU Bloc ‘Our Ukraine’ (NS-NU)
BYuT Yuliya Tymoshenko Bloc (BYuT)
KPU Communist Party of Ukraine (KPU)
SPU Socialist Party of Ukraine (SPU)
LPB Lytvyn’s People’s Bloc (LPB)
NVB Nataliya Vitrenko Bloc ‘People’s Opposition’ (NVB)
CBP Civil Bloc PORA-PRP’ (CBP)
VICHE VICHE


UPBKP Ukrainian People’s Bloc of Kostenko and Plyusch
OBNY Oppositional bloc NOT YES! (OBNY)





Party Block Poll% Vote% Seats% No of Seats
PR 32,10% 32,10% 41,33% 186
BYuT 22,27% 22,27% 28,67% 129
NS-NU 13,94% 13,94% 17,95% 81
SPU 5,69% 5,69% 7,33% 33
KPU 3,66% 3,66% 4,72% 21
NVB 2,93% 2,93%

LPB 2,44% 2,44%

VICHE 1,74% 1,74%

UPBKP 1,88% 1,88%

CBP 1,47% 1,47%

OBNY 1,01% 1,01%

Others 7,03% 7,03%






Sum 96,15% 100,00% 100,00% 450
Informal 3,85% 3,85%






Summary 100,00%



Yushchenko Game Play (cont..) Day 30 and still no Orange coalition

April 23, 2006

Day 30 since the March 26 Parliamentary Elections and still Yushchenko Our Ukraine party have not signed up for a working coalition.

The longer this goes on the more it will begin to undermine public confidence and begin to effect Ukraine’s economic stability.

Yushchenko’s who’s election cost Ukraine over 300 Million Dollars in 2004 with the support of Yulia Tymoshenko and others refuses to acknowledge the outcome of the election results which saw Yushchenko’s party come in 3rd place with only 14% of the overall vote behind Yulia Tymoshenko (22%) and Party of Regions (32%). As a result Our Ukraine does not hold a commanding lead. Prior to the election an agreement within the Orange team was reached with the understanding that whichever party receives the most votes will decide whop will become Prime Minister. This agreement was signed by all parties.

Following the election when it became obvious to all but Yushchenko and his team that Yulia Tymoshenko out polled Our Ukraine and in doing so represented an absolute majority of the future Orange coalition.

Viktor Yushchenko who played a major role in the election campaign in support of the Our Ukraine bloc has now reneged on the initial agreement and is holding out, in the hope of stopping Yulia Tymoshenko from being appointed Prime Minister.

In September last year Yushchenko fell out with Yulia Tymoshenko following her expression of concerns about corruption in the Our Ukraine camp and failure of the President to address a issues related to a number of highly questionable privatisations undertaken by the previous government. In retaliation the President sacked Yulia Tymoshenko and installed his own nominee as President.

On January this year modifications to Ukraine’s constitution which came into full effect with the election of the new Parliament transformed Ukraine from Presidential decree to a Parliamentary democracy. No longer is Ukraine’s government appointed by the President.

The President having lost power and failed to win support in the March elections is trying now desperately trying to hold on to what little power he has left.

The numbers game

The numbers in the new Parliament are tight and the President’s Party are trying its utmost to twist the arms of various power brokers to see his man re-appointed PM and to ensure that his one time ally Yulia Timoshenko is sidelined.

Presidential Trump Card

The President has a trump card in that if an agreement can not be reached then he can call for fresh elections – But this would be unwise and unpalatable to the electorate.

A gamble not worth taking.

A fresh election would cost 100’s of Millions of dollars, something that Ukraine can ill-afford). If a fresh elections were held the President runs the serious risk to alienating his support base even more and handing over complete control to the Party of Regions who would be seen better alternative to the indecisive personality clashed of the Orange coalition.

Yulia holds ground and conviction

Yulia Tymoshenko and her supporters, including the Socialist Party of Ukraine (7%) who make up the other 1/5th of the orange coalition show no issues of backing away from the original agreement.

The Blame Game

Meanwhile Yuchenko Our Ukraine are tying to shift the blame and justification for not signing the agreement to form a governing coalition on to Yulia’s Tymoshenko who it appears Our Ukraine taking the prime Ministers position and they want a acceptable alternative to be nominated before agreeing to any formal coalition. (Something that seems unlikely to be agreed to).

Who folds first losers.

Whilst both parties try to out stare each other in the hold of blinking and caving in first all parties are losing ground with a continuing loss of public confidence in the future of any governing coalition.

The damage has probably already been done and there is little chance that public confidence can be fully restored.

If Yulia Tymoshenko hold out and ends up winning the chances are that the President will, most like in 12 months time, find reason and just cause to sack her again sometime in the future again in the hope that he can pull off a political-coo and have his man appointed as Prime Minster.

The alternative option

The other option available to the President and his Our Ukraine bloc is to form a coalition with the other major player “Party of Regions” whilst this option, in the absence of a firm signed agreement amongst the “Orange camp”, continues to be canvassed with major business interests, who are opposed to a Yulia Tymoshenko lead government, indicating their support for such a coalition.

Problems with a Party of Region Coalition

If Our Ukraine was to form a coalition with Party of Region, the Party that was the main opposing force during the 2004 Presidential election, there would be a significant public fall-out with Yushchenko being seen Asa traitor to the ‘Orange revolution’ and would forever ruin his chance of playing a serious moderating or mediating role as Ukraine’s Head of State. This loss of public confidence would destroy any hope of winning a referendum seeking further changes to Ukraine’s Constitution, something that the President has signalled he want to achieve although he us yet to spell out exactly what it is he wants changed.

Assuming that a coalition between Our Ukraine and Party of Regions can be forged, it is difficult to predetermine on what basis and platform such a coalition can be managed. Yushenko is seen as a puppet of the United States whilst the Party of Regions, whose support base is in the East is backed by Russia.

Should a Our Ukraine and Party of Regions coalition be formed, apart from the political fallout, there is every chance that the two political blocs could form a government that is capable off addressing serious economic issues. Such a coalition could bring on side Ukraine’s business elite and win back much needed Russian support and improvement in neighbourly relations. Russia is Ukraine major trading partner and effectively providers Ukraine Billion’s of dollars in subsidies. The ability to develop a better working relationship whist pursuing independent national policies would assist Ukraine in improving its position in the short term and help it establish its economic development.

Assessment of options

It is difficult to trying to make an assessment as to which course would be best for Ukraine. Ir-perspective of the outcome Ukraine’s immediate future is not looking bright. Prices are expected to rise and inflation will continue to sore no matter which party coalition is formed.

What is clear is that a Orange Coalition Government will have little chance of moderating inflation and its economic consequences. If Ukraine is unable to mend bridges And its relationship with Russia, then Russia rightly so will continue to withdraw the extent of its subsidies to Ukraine making it that much more difficult for Ukraine overall. Ukraine can not and should not expect the West and the United States to fill any short-fall.

It is for the reason that we believe in the event that Yulia Tymoshenko does not fold and Yushchenko ends up staying an Orange player he will try and buy some time ( 12 months or more) in the hope that he can manage any serious political fall out and with the passing of time his standing and position may improve. His party, and as a result his Presidency, suffered a serious blow during the March elections Both the President and Our Ukraine desperately needs time to rebuild, regenerate and regroup.

Yuchenko has little time for indecisiveness.

Once the official elections results, which have been held up by a legal challenge, are declared his has little time left. Parliament must sit within two weeks of the official results being published and then they must decide within 30 days who will govern Ukraine. Although technically the Parliament has thirty days any delay would begin to take its toll once the Parliament sits. Our Ukraine’s time would have run out and he President can no longer afford to gamble with the outcome.

The time has come for each party to declare there intentions and for Ukraine to move forward.


Yushchenko Game Play (cont..) Day 30 and still no Orange coalition

April 23, 2006

Day 30 since the March 26 Parliamentary Elections and still Yushchenko Our Ukraine party have not signed up for a working coalition.

The longer this goes on the more it will begin to undermine public confidence and begin to effect Ukraine’s economic stability.

Yushchenko’s who’s election cost Ukraine over 300 Million Dollars in 2004 with the support of Yulia Tymoshenko and others refuses to acknowledge the outcome of the election results which saw Yushchenko’s party come in 3rd place with only 14% of the overall vote behind Yulia Tymoshenko (22%) and Party of Regions (32%). As a result Our Ukraine does not hold a commanding lead. Prior to the election an agreement within the Orange team was reached with the understanding that whichever party receives the most votes will decide whop will become Prime Minister. This agreement was signed by all parties.

Following the election when it became obvious to all but Yushchenko and his team that Yulia Tymoshenko out polled Our Ukraine and in doing so represented an absolute majority of the future Orange coalition.

Viktor Yushchenko who played a major role in the election campaign in support of the Our Ukraine bloc has now reneged on the initial agreement and is holding out, in the hope of stopping Yulia Tymoshenko from being appointed Prime Minister.

In September last year Yushchenko fell out with Yulia Tymoshenko following her expression of concerns about corruption in the Our Ukraine camp and failure of the President to address a issues related to a number of highly questionable privatisations undertaken by the previous government. In retaliation the President sacked Yulia Tymoshenko and installed his own nominee as President.

On January this year modifications to Ukraine’s constitution which came into full effect with the election of the new Parliament transformed Ukraine from Presidential decree to a Parliamentary democracy. No longer is Ukraine’s government appointed by the President.

The President having lost power and failed to win support in the March elections is trying now desperately trying to hold on to what little power he has left.

The numbers game

The numbers in the new Parliament are tight and the President’s Party are trying its utmost to twist the arms of various power brokers to see his man re-appointed PM and to ensure that his one time ally Yulia Timoshenko is sidelined.

Presidential Trump Card

The President has a trump card in that if an agreement can not be reached then he can call for fresh elections – But this would be unwise and unpalatable to the electorate.

A gamble not worth taking.

A fresh election would cost 100’s of Millions of dollars, something that Ukraine can ill-afford). If a fresh elections were held the President runs the serious risk to alienating his support base even more and handing over complete control to the Party of Regions who would be seen better alternative to the indecisive personality clashed of the Orange coalition.

Yulia holds ground and conviction

Yulia Tymoshenko and her supporters, including the Socialist Party of Ukraine (7%) who make up the other 1/5th of the orange coalition show no issues of backing away from the original agreement.

The Blame Game

Meanwhile Yuchenko Our Ukraine are tying to shift the blame and justification for not signing the agreement to form a governing coalition on to Yulia’s Tymoshenko who it appears Our Ukraine taking the prime Ministers position and they want a acceptable alternative to be nominated before agreeing to any formal coalition. (Something that seems unlikely to be agreed to).

Who folds first losers.

Whilst both parties try to out stare each other in the hold of blinking and caving in first all parties are losing ground with a continuing loss of public confidence in the future of any governing coalition.

The damage has probably already been done and there is little chance that public confidence can be fully restored.

If Yulia Tymoshenko hold out and ends up winning the chances are that the President will, most like in 12 months time, find reason and just cause to sack her again sometime in the future again in the hope that he can pull off a political-coo and have his man appointed as Prime Minster.

The alternative option

The other option available to the President and his Our Ukraine bloc is to form a coalition with the other major player “Party of Regions” whilst this option, in the absence of a firm signed agreement amongst the “Orange camp”, continues to be canvassed with major business interests, who are opposed to a Yulia Tymoshenko lead government, indicating their support for such a coalition.

Problems with a Party of Region Coalition

If Our Ukraine was to form a coalition with Party of Region, the Party that was the main opposing force during the 2004 Presidential election, there would be a significant public fall-out with Yushchenko being seen Asa traitor to the ‘Orange revolution’ and would forever ruin his chance of playing a serious moderating or mediating role as Ukraine’s Head of State. This loss of public confidence would destroy any hope of winning a referendum seeking further changes to Ukraine’s Constitution, something that the President has signalled he want to achieve although he us yet to spell out exactly what it is he wants changed.

Assuming that a coalition between Our Ukraine and Party of Regions can be forged, it is difficult to predetermine on what basis and platform such a coalition can be managed. Yushenko is seen as a puppet of the United States whilst the Party of Regions, whose support base is in the East is backed by Russia.

Should a Our Ukraine and Party of Regions coalition be formed, apart from the political fallout, there is every chance that the two political blocs could form a government that is capable off addressing serious economic issues. Such a coalition could bring on side Ukraine’s business elite and win back much needed Russian support and improvement in neighbourly relations. Russia is Ukraine major trading partner and effectively providers Ukraine Billion’s of dollars in subsidies. The ability to develop a better working relationship whist pursuing independent national policies would assist Ukraine in improving its position in the short term and help it establish its economic development.

Assessment of options

It is difficult to trying to make an assessment as to which course would be best for Ukraine. Ir-perspective of the outcome Ukraine’s immediate future is not looking bright. Prices are expected to rise and inflation will continue to sore no matter which party coalition is formed.

What is clear is that a Orange Coalition Government will have little chance of moderating inflation and its economic consequences. If Ukraine is unable to mend bridges And its relationship with Russia, then Russia rightly so will continue to withdraw the extent of its subsidies to Ukraine making it that much more difficult for Ukraine overall. Ukraine can not and should not expect the West and the United States to fill any short-fall.

It is for the reason that we believe in the event that Yulia Tymoshenko does not fold and Yushchenko ends up staying an Orange player he will try and buy some time ( 12 months or more) in the hope that he can manage any serious political fall out and with the passing of time his standing and position may improve. His party, and as a result his Presidency, suffered a serious blow during the March elections Both the President and Our Ukraine desperately needs time to rebuild, regenerate and regroup.

Yuchenko has little time for indecisiveness.

Once the official elections results, which have been held up by a legal challenge, are declared his has little time left. Parliament must sit within two weeks of the official results being published and then they must decide within 30 days who will govern Ukraine. Although technically the Parliament has thirty days any delay would begin to take its toll once the Parliament sits. Our Ukraine’s time would have run out and he President can no longer afford to gamble with the outcome.

The time has come for each party to declare there intentions and for Ukraine to move forward.


Yushchenko Game play Ukraine’s President holds out and rejects ‘Majority rules’ whilst concern expressed about his constitutional standing

April 18, 2006
Ukraine’s President, Victor Yushenko holds out, indicating his refusal to sign an agreement with his former orange coalition partners.

Viktor Yuschenko who was elected President of Ukraine following public protests and the decision of the court to hold fresh elections in December 2004.

His election, which cost Ukraine over 300 Million dollars, was only made possible with the support of Yulia Tymoshenko and Ukraine’s Socialist Party. In recognition of her support Viktor Yushchenko appointed Yulia Tymoshenko Prime Minster.

Nine months later Viktor Yushchenko, amidst allegations of corruption within the Presidents Our Ukraine Party, sacked Yulia Tymoshenko as Prime minister and appointed a representative from the President’s own Our Ukraine block.

Yulia Tymoshenko fought back and put her faith in the people of Ukraine and successfully campaigned winning 22%of the vote in the March 26 Parliamentary elections, coming second behind Party of Regions (32%) headed by Viktor Yushchenko’s rival Viktor Yanakovic.

Yulia Tymoshenko won the hearts and minds of Ukraine and out polled the President’s Party who only received 14% of the vote and in doing so has seriously undermined the President standing and credibility.

Viktor Yushchenko was portrayed as a traitor to the Orange cause in that under his administration mistakes and injustices of the past were not brought to account. The President’s reforms came to a virtual stand still as Ukraine’s economy stalled and inflation took off.

The problem now facing the President is that changes to Ukraine’s constitution, agreed to by the President prior to his election, has seen Ukraine move away from a system of Presidential decree to a system of Parliamentary Democracy.

No longer is Ukraine’s Prime Minister and Government the sole prerogative and choice of the President. Parliament now rules and it is Parliament that selects who will become Prime Minister and forms the Government .

The President and his men find themselves in a compromising position. Having only obtained only 14% of the vote in the March Parliamentary elections his party Our Ukraine is in a significant but minority position. The public and his supporters expect the President to reform alliances and fulfil his original agreement with his former Orange coalition members which also include Ukraine’s Socialist Party.

Since the election representatives of the Orange Coalition have been meeting to reach agreement on the platform and basis of a coalition agreement that will govern a Orange coalition government. The Socialist Party and Yulia Tymoshenko bloc have both signed off on the agreement which includes the previous understanding that the party with the most support would select and appoint the Prime-minister who in turn will lead the coalition. But the President’s party Our Ukraine have refused, to date, to sign.

Viktor Yuschenko is faced with a difficult decision. He can honour the commitments he made prior to the election or he can hold out and betray yet again the hopes and dreams of the the Orange supporters. At risk is the reform, as little as there have been, that were made following the 2004 Presidential election. If the President fails to re-establish the Orange alliance he seriously runs the risk of further undermining public and international confidence in Ukraine’s political democratic reforms.

The main sticking point at this stage is the reappointment of Yulia Tymoshenko as Prime-minister .

If an agreement can not be reach and a working coalition representing over 50% of the newly elected Parliamentary representatives can not be formed then the President has the right to sack the new Parliament and call for a fresh election. Such a move would only further undermine Ukraine’s political stability and would have serious implications on Ukraine’s already fragile economy.

Further it is unlikely that fresh elections would break the stalemate within the Orange camp with the possibility of the President’s Our Ukraine Party loosing further ground and public support

The other option that has is being talked about is that there will be a break in ranks within the Our Ukraine bloc and Our Ukraine would team up and form a coalition with the Russian backed Party of Regions. How much of this is reality as opposed to game play is difficult to determine, each party is using its options to try and win point and better position themselves in the negotiations.

The longer it take for The President and Our Ukraine to decide the more difficult and problematic it becomes.

To date the delays in announcement and the forming of a workable coalition has had no real impact on Ukraine’s economic stability but this could change if it negotiations drag on.

The President and various players have been given more time to finalize negotiations.

Challenges to Ukraine’s Parliamentry election results are before the court with one party “Natalia Vitrenko Block” having received over 3% of the formal ballot fell short ( 2.97%) of the Central Electoral Commissions 3% threshold which includes informal ballot papers in its calculation. A request for a recount to verify the results was refused by the electoral authority which has claimed that it can only undertake a recount if instructed to do so by the courts. The Courts are not expected to rule on the challenge until later this week and could be held back until next week. As a result the outcome of the election can not be confirmed until the court decides what to do. It is possible that the Court might order a recount in which case the Official results of the election would delayed another week.

This buys time for the President who rightly claims that it is inappropriate to conclude any coalition agreement until the results of the election are finalized.

The outcome of negotiations are finely tuned.

Whilst the President holds the trump card it is one that can not readily be played and all parties are aware of this. The calling of fresh elections would be a disaster and would only create insecurity and disability within Ukraine.

An alliance between Our Ukraine and Party of Regions would also create difficulty as it would require significant concessions to the Presidents’s desired reform programme, setting back development of closer ties with Western Europe including plans for Ukraine to join NATO. Although such an alliance has been advocated by Ukraine’s business community and industrialists and could possibly provide the nessassary political stability Ukraine so much needs the costs would be considerable in that it would severely undermine public confidence in Ukraine’s political reform and would see Yushchenko join the many others recorded in Ukraine’s history for their acts of betrayal.

The signing of the Orange coalition is the most likely outcome, if only to buy time and distance between the election and any future fresh elections.

The main unknown aspect to the formation of an Orange coalition is the current court challenge. If the Court rules that there should be a recount and the recount changes the result of the preliminary count with Natali Ventrenko exceeding the 3% imposed threshold she will gain 15 Parliamentary seats which will effect the balance of the power within the elected Parliament. In theory the Orange coalition would still hold a majority but with a significantly reduced margin.

The most likely out come will be the signing of an Orange coaltion. This would buy time and distance which in turn would allow further constitutional reforms, which the President hopes will hand him back the power that was taken from him, and in the President’s thinking path the way for more favourable circumstances and possible justification in the holding of fresh elections.

Eitherway the future is not that bright or at least in the short term.

Prices are expected to rise with inflation continuing to outstrip income. Ukrainians will effectively be worst off as the President and Orange partnership pushes though various and necessary reforms that will in the short term create more hardship before it begins to produce fruit.

12 months from now Ukraine can expect fresh elections and the President will begin to question the decison to call his election a revolution when in reality what Ukraine needs most is evolution and the creation of a stable democratic government.

Links:
BBC- Yushchehnko’s Our Ukraine to team up with Party of Regions

Focus News – Our Ukraine will not form alliance with Party of Regions

Ukraine Radio – Our Ukraine postpons desicion on signing Orange Coalition agreement

UNIAN – Our Ukraine hopes to team up with Orange Coalition