Saturday, April 08, 2006

Deep Division

Ukraine's president seeks to regain power as delays and uncertainly begin to become apparent

The deep divisions that exist within Ukraine's newly elected Parliament are becoming more and more apparent as the Financial Times, Tom Warner reports.

There was even the suggestion of a coalition of all five parties to come together to form a truly national government. But in reality this would not work and policies begin to divide and separate any working coalition.

Behind all the negotiations is the Trump Card held by Ukraine's President, Viktor Yushchenko. If The new Parliament can not compromise and find agreement to form a coalition government the President can sack the new parliament and call for fresh elections.

Tom Warner in his article has mentioned that two- fifths of the President's faction "Our Ukraine" have called for coalition talks with the blue "Party of Regions" something that is supported by a majority of Ukraine's business leaders. How much of this is gamesmanship in an attempt to persuade Yulia Tymoshenko to forgo her ambitions to regain the prime-ministership and hand over the top job to Our Ukraine's nominee is yet to be determined.

Yulia Tymoshenko received over 22% of the national vote whilst Our Ukraine lead by Viktor Yushchenko only managed a mere 14% of the vote.

What is clear is that there needs to be more distance and independence from the office of President, Ukraine's Head of State, and his party of choice "Our Ukraine" if any coalition government.

No matter what shape or color of Ukraine's future Government the President withdraw from party Politics and Resign from Our Ukraine. Until then Yushchenko will only undermine the office of Ukraine's President and his own standing by continuing to be seen as only interested in representing the views of 14% of Ukraine's electorate.

It is unlikely and unwise for the President to force Ukraine back to the polls so soon. The outcome of a fresh election would be uncertain and would definitely play into the hands of the Blue Party of regions.

Tacticly it would be better for the President to enter into a marriage of conveinance and bid his time for 12 months and then if need be pull out of any coalition agreememnt and hold fresh elections but at what costs to Ukraine.

The longer the delay in reaching an agreement the greater the degree of uncertainty will have a negative impact on Ukraine's economy (Something that neither party can afford).

Squabbles hinder Ukraine's attempts to form coalition
By Tom Warner in Kiev
Published: April 8 2006 03:00 Last updated: April 8 2006 03:00

The world may be congratulating Ukraine on its first "free and fair" elections, but not all of its newly elected legislators are happy. Many are considering asking the president to dissolve the new parliament and try again.

The vote two weeks ago, in which a divided pro-western "Orange" camp won a narrow victory over "Blue" pro-Russian forces, has led to a stand-off in coalition talks that some say could be a stalemate.

The outcome depends mainly on whether the two "Orange" leaders - Viktor Yushchenko, the president, and Yulia Tymoshenko, who was his prime minister until they fell out and he sacked her - can be reconciled.

The trouble for Mr Yushchenko is that Ms Timoshenko's bloc won the biggest share of the "Orange" vote, which she says gives her a mandate to return as prime minister. If Mr Yashchin-ko's bloc disagrees, there will not be any coalition, she says.

Mr Yushchenko argues that the "Orange" camp should commit to a coalition but put off the decision about a prime minister.

He wants signed promises from the Tymoshenko bloc and the third prospective partner, the Socialists, that the coalition would carry out a programme in line with the president's vision - including quick entry to the World Trade Organisation, a free-trade agreement with the European Union, and no revision of past privatisations, one of the issues Mr Yushchenko and Ms Tymoshenko quarrelled over.

But, privately, Our Ukraine insiders say the real obstacle to a coalition is the animosity that exists between Ms Tymoshenko and leading Our Ukraine members, including several whom she has accused of corruption. At a closed-doors meeting this week where Our Ukraine leaders voted on a draft coalition agreement, many opposed giving her the premiership.

A group around Petro Poroshenko, a businessman and Ms Timoshenko's leading opponent within Our Ukraine, proposed a draft that would have invited pro-Russian "Blue" parties to join the coalition talks, which was voted down by a three-to-two majority.

Viktor Yanukovich, leader of the pro-Russian Regions party, which came first in the elections with 32 per cent of the vote, is calling for a "universal" coalition embracing all five parliamentary parties.

Most Our Ukraine members say their bloc would prefer new elections to an "Orange-Blue" coalition. But they say the stand-off is likely to continue until June or even July. Parliament is expected to open session in the second week of May. If it fails to appoint a cabinet within 60 days, the president can call new elections.

Mykola Katerenchuk, an Our Ukraine leader, says Ms Tymoshenko will be able to get herself nominated as prime minister, but she may not win confirmation as only 18 supporters would have to defect to undermine her bid.

The uncertainty is testing investors' nerves. The central bank released data this week showing it spent $1.8bn (€1.5bn, £1bn) of reserves defending the currency during the three months before the elections. Analysts say a coalition failure could precipitate a currency crisis.

But Mr Katerenchuk says the threat of new elections will force a compromise. "There's a lot of 'he doesn't like her' and 'she doesn't like him' and 'he doesn't like him' around. We need to put all that behind us."