Thursday, May 25, 2006

Ukraine convenes first Parliament session

but adjourns proceedings until June 7 amidst uncertainty

Ukraine held its first session of the New Parliament as the Old Ministers resign their posts.

Immediately after the swearing in of the new deputies a vote to defer the session was held and voted on along party lines with Our Ukraine, Yulia Tymoshenko bloc and the Socialists voting in favour and Party of Regions and the Communist bloc voting against.

Under Ukraine's Constitution the Parliament must be convened within 14 days from the official publication of the election results. Once the party has met they have one month in which to agree and form a working coalition government. If a government can not be formed within the next month Ukraine's President and leader of Our Ukraine bloc can call for fresh elections. This is unlikely apart from the prohibitive costs the results of a fresh election will only make things worst, if they can get worst.

The longer the delay in the forming of a coalition the greater the instability and undermining of confidence in the coalition marriage. To date Yulia Tymoshenko and the Socialists have agreed on the formation of an Orange Coalition but Our Ukraine continue to delay in giving a commitment. Every day that passes from now until June 7 will further add to speculation. unless a clear and definitive commitment can be made soon Ukraine will venture on to unknown ground.

What ever the outcome the next session of Parliament should see major reforms and changes to Ukraine's governance. Yushchenko hopes to push through a series of legislative reforms that will lock in Ukraine's foreign policy and international relations. These reforms are expected to create significant economic realignment with prices for basic goods increasing at a faster rate then incomes. Inflation most likely will reach well into the 30% mark, although the government will try and play down the real level of inflation. Already prices for basic goods have nearly doubled over the last 18 months and further increases are expected. Most price increases for government services were held back until after the election to avoid a voter backlash. The cost of gas was increased by 25% in May with further increases expected in July. the cost of Train tickets, which is Ukraine's main means of transport, will increase by 50%. Electricity and fuel also will go up in the near future while wages are expected to remain low. Yesterday Trade Unions held a demonstration outside the parliament in protest of low wages and higher prices. We can expect this level of dissatisfaction to increase as the necessary reforms and economic adjustments are implemented.

BUT first things first... Ukraine needs a working government and a coalition must be formed.

Our Ukraine is the main stumbling bloc. It is difficult to know exactly what Our Ukraine's game plan is? They could be trying to form a water tight agreement or they could be ploughing the field in preparation for a split in the orange camp some time in the future? With the passing of time and growing public dissatisfaction Our Ukraine hopes that the political climate will change and fresh elections in a year's time might produce a better result or give support for further constitutional reform.

At risk is the gains, hopes and dreams of Ukraine for a better life and solidarity of the 'orange revolution' which has promised much but to date delivered very little.

The continued bickering, public infighting and division between Yulia Tymoshenko and Our Ukraine does not help.

Ukraine: New Parliament Convenes, Sets Deadline For Coalition
By Jan Maksymiuk , Radio Free Europe/Radio Liberty

Today's opening session
Today's inaugural session of Ukraine's newly elected parliament effectively launched a 30-day countdown for the formation of a ruling coalition. Deputies from the Yuliya Tymoshenko Bloc, Our Ukraine, and the Socialist Party passed a resolution adjourning the session until June 7, by which time they expect to present a coalition accord on a new government.

PRAGUE, May 25, 2006 (RFE/RL) -- All seemed in order as the 450-seat Verkhovna Rada convened for its first session today -- but the composure on the Ukrainian parliamentary rostrum was short-lived.

A dispute among deputies erupted immediately after the Yuliya Tymoshenko Bloc, Our Ukraine, and the Socialist Party -- the three allies in the 2004 Orange Revolution -- proposed that the session be postponed until June 7.

By that time, they pledged, the three groups will have agreed on the principles of a renewed coalition. The motion eventually passed with 240 votes.

Rift Remains

Dissent came from the ranks of the Party of Regions and the Communist Party, whose members argued that the Orange Revolution allies have had enough time to agree on a coalition and should allow the legislature get to work.

The March 26 parliamentary vote in Ukraine, which was internationally praised as fair and democratic, produced a legislature comprising five forces: the Party of Regions (186 seats), the Yuliya Tymoshenko Bloc (129), Our Ukraine (81), the Socialist Party (33), and the Communist Party (21).

Over the past two months, the five parliamentary groups have held several joint meetings chaired by President Viktor Yushchenko and many bilateral and trilateral conferences devoted to the formation of a parliamentary majority, but all of them proved to be fruitless.

The Party of Regions and the Communist Party believe the Orange Revolution allies have had enough time to agree on a coalition and should allow the legislature get to work.
In mid-April the Yuliya Tymoshenko Bloc, Our Ukraine, and the Socialist Party signed a protocol pledging to work toward creating such a parliamentary majority. Their subsequent efforts led to the preparation of two draft coalition accord -- one endorsed by the Yuliya Tymoshenko Bloc and the Socialists, the other worked out by Our Ukraine.

The Tymoshenko Hurdle

The main stumbling block in the coalition talks is the question of who will become prime minister. Tymoshenko has made no secret of her desire to regain the post she held before being dismissed by Yushchenko in September. But the restoration of Tymoshenko as prime minister is exactly what the president and his political partners from Our Ukraine would like to avoid.

Yushchenko officially split with Tymoshenko after she accused some of his closest allies of corruption practices and of running a "second" government. All of them were subsequently elected to the Verkhovna Rada from the Our Ukraine list. If the former Orange Revolution allies eventually decide to restore their coalition and Tymoshenko becomes prime minister once again, the old conflict may reignite.

If Tymoshenko makes good on her promise to cancel the gas deal with Gazprom, it could lead to a serious conflict between Kyiv and Moscow. There is also another source of potential discord between the president and Tymoshenko. Tymoshenko promised during the election campaign to cancel a gas-supply deal that Yushchenko's cabinet signed with Gazprom in January. The deal raised the gas price for Ukraine from $50 to $95 per 1,000 meters and gave RosUkrEnergo, an opaque Swiss-based company owned half by Gazprom and half by two Ukrainian businessmen, the role of sole supplier.

The cancellation by Tymoshenko of the gas deal with Gazprom could lead to a serious conflict between Kyiv and Moscow. Russia could cut gas supplies to Ukraine, as it did for a short time in January, or impose trade sanctions, as it recently did with regard to Georgian and Moldovan wines. Ukraine, which currently sends some 22 percent of its exports to Russia, would hardly benefit from any trade ban from Moscow.

Another hurdle to an "Orange" coalition is the Socialist Party's opposition to some goals pursued by Yushchenko's presidency. In particular, the Socialists object to Ukrainian aspirations to join NATO. They also object to the privatization of land, thus undermining Yushchenko's efforts to implement reforms he pledged during the 2004 Orange Revolution in an effort to bring the country closer to the European Union.

Unlikely Marriage

If Our Ukraine fails to fulfill Timoshenko's dream of regaining her seat as prime minister, she will most likely switch to the opposition, and Yushchenko will have to seek a coalition with the Party of Regions led by Viktor Yanukovych -- his former presidential rival.

Such a coalition, with 267 votes in the Verkhovna Rada, would provide solid support for its cabinet, provided that the two seemingly mismatched parties could adopt a consistent program.

President Yushchenko at the opening of parliament today (EPA)Both parties represent the interests of major oligarchic groups in Ukraine, so in theory they could very easily agree on a set of basic economic reforms. But difficulties could emerge in the determination of foreign-policy priorities, as Yanukovych party is generally seen as Russia-leaning, in contrast to the Western-oriented Our Ukraine.

But for Yushchenko, this coalition option is fraught with much more serious dangers than mere differences of opinion on foreign policy. The Party of Regions, which won the March 26 vote, would most likely demand the post of prime minister. It is not clear whether Yushchenko would prefer Yanukovych or someone else from his party to Tymoshenko as prime minister.

Under the constitutional reform that went into effect in January, the presidential powers in Ukraine were substantially reduced to the benefit of the parliament and the prime minister. Since the Party of Regions has many politicians with great experience in running the government during former President Leonid Kuchma reign, Yushchenko should think twice before handing the keys to the cabinet over to them. Such experienced politicians could do more to diminish the role of the president in practice than the constitutional reform did in theory.

European Course

Yushchenko told the Verkhovna Rada today that he will expect the new cabinet to embody his future vision for Ukraine.

"The government should be made up of those who, as a single team, will ensure Ukraine's development on the basis of European values, who are capable of consolidating the nation, stimulating economic reforms, and respecting the rights and freedoms of the people," Yushchenko said.

However, the president could find these goals very difficult to achieve -- not only because of discrepancies among the potential coalition parties but also because of the personal ambitions of their leaders.