Sunday, April 23, 2006

Yushchenko Game Play (cont..)

Day 30 and still no Orange coalition

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.