Tuesday, June 13, 2006


Submitted by Matt Jay on 6/13/2006 – 12:44 pm
Publihsed by Publius Pundit

Think back to March 26 2006. Belarussians were on the street protesting against Lukashenka, an Afghan Christian convert risked the death penalty, London Mayor Ken Livingstone had just called the U.S Ambassador a ‘chiseling little crook’, and the Commonwealth games had just concluded. Whilst some sort of closure has been brought to all of those events, one news story from the week wrangles on. Ukraine went to the ballot box 4 months ago – a government has still yet to be formed.

For those of you who have not been following the story, it will not take long to explain the events of March, April, May and June. The results yielded a Parliament, as expected, with ex-Kuchma ally Viktor Yanukovych’s Party of Regions the biggest seat holder (186 MP’s). In Second, Third and Fourth place came Bloc Yulia Tymoshenko, Our Ukraine (President Yushchenko’s party) and the Socialists. The three parties held 129, 81 and 33 seats respectively – enough for a majority to set about governing.

After a brief period of relief in Western Ukraine that the Pro-Russian parties would not form the new cabinet, the blocs began talking. And talk they did. The first sticking point appeared to be Tymoshenko’s demand to be Prime Minister. Apparently, as Yushchenko had fired her only months before from the same position, this was unacceptable. I mean, why should the party with the most MP’s in parliament have the most powerful post? For months, the bickering went on, with whisperings of alternative candidates, and the occasional claim that Our Ukraine was talking to the enemy (Party of Regions). Only last week did Yushchenko finally agree that Tymoshenko should be PM.

But now a further thorn in the side of a reunited Orange Coalition has emerged. Yes, Our Ukraine is opposed to the Socialist Party gaining control of the Parliamentary Speaker’s post. So much so that all talks have been broken off.

So why is Our Ukraine causing such a fuss? Why are they using such definite terms as ‘impossible’ and ‘dead end’?

Personally I feel that Yushchenko is angling for the strongest possible position he can – one where he regains the powers he lost at the start of the year.

When Kuchma agreed to a new election in 2005, it was done so on the premise that the President would have far fewer powers. Yushchenko naturally agreed and all was well. Fast forward a year and the new Head of State began to call for a referendum to see if the Ukrainian people agreed with the constitutional reforms. Backsliding in the face of poor opinion poll ratings, Yushchenko seemed determined to reverse the laws which placed most important decisions in the hands of the Prime Minister.

Realising that a referendum would likely fail without support from Party of Regions and Yulia Tymoshenko, the Liberal Head of State adopted a new tactic. If he could pack the Constitutional Court with his own supporters the reforms would be overturned. Parliament would not play ball.

So now Ukraine faces crisis. An Orange coalition is off the table (allegedly) and Yushchenko appears to be cosying up to Party of Regions through small steps. Im sure after a brief chat, Our Ukraine will further denounce it’s former allies and agree on some kind of ‘Government of National Unity’ with Yanukovych. All the time, Yushchenko probably hoping to strike some sort of deal that gives his party the chance to swear in those all important judges. If this is the game, and the reasoning behind it, that the President is playing it is extremely foolish.

The Party of Regions have little interest in Democracy, are associated with crime, and tainted with the alleged poisoning of Yushchenko himself. I fear that in his desire to regain his power the President is risking handing everything to the party of big, murky business. Whatever the result, Our Ukraine’s opinion poll ratings must be sliding further into the abyss – 2010 is unlikely to see them returned to power and Ukraine most likely just as far away from NATO and the EU as ever before.


Monday, June 12, 2006

Could Ukraine become a dictorship

Victor Yushchenko rules out parliamentary election rerun

Interfax-Ukraine reports Yushchenko as saying there will not be a rerun Parliamentary election. This send the wrong signals given that the President's Our Ukraine Party have just stated that negotiations on the formation of an Orange coalition have failed.

Could Ukraine become a dictatorship with Yushchenko at the helm?

If there is no working coalition formed before June 25 then Ukraine will enter a catch 22 constitutional Crises leaving Victor Yushchenko and the former Government in control.

As previously reported unless this situation is resolved quickly then Ukraine will begin to suffer economically. Ukraine will suffer a loss of confidence, the one thing business does not like is uncertainty.

Our Ukraine appear to have been edging or trying to find excuses to not form a government. Their demand first for Yulia Tymoshenko to not be re-appointed Prime-minister failed to attract support, now they are looking to shift responsibility to the third coalition partner, The Socialists, claiming for themselves the right to appoint the Parliamentary Speaker. The Socialists hold the view that as Our Ukraine holds the President's position, Yuylia Tymoshenko should be appointed Prime-Minister and the Socialists should have the Speakers chair.

It is difficult to ascertain why Our Ukraine is prepared to put so much at risk over what is really a trivial issue. Our Ukraine would be better off securing the major financial/economic portfolios and steer from the rear. instead they are prepared to risk all and plunge Ukraine into the abyss, further undermining public confidence in the President.

Viktor Yushchenko instead of staying home to resolve the potential crisis of confidence continues on his world tour as if there is no problem or it is not his responsibility.

24 hours is a long time in politics but one can not help but wonder if those involved, Our Ukraine in particular are sincere about developing a true democratic state.

Yuschenko rules out parliamentary election rerun

Kyiv, June 12 (Interfax-Ukraine) - Ukrainian President Viktor Yuschenko has ruled out the possibility of repeat parliamentary elections despite the current impasse in talks on the formation of a governing coalition.

"Remember - there will be no repeat elections. Today you have been entrusted with responsibility for the country, and this means that you must form a majority. External and internal threats require consolidation and not egoism on the part of Ukrainian politicians. This is what the president and Ukrainian society expect from you," Yuschenko said in a radio address.


All hope dies as Ukraine faces a major constitutional crisis

Kyiv Post update

Ukrainian president's party: continuing coalition talks with Socialists is hopeless

Jun 12 2006, 17:05

(AP) President Viktor Yushchenko's political party said Monday it saw no point in continuing talks with the Socialists on forming a governing coalition, possibly signaling the imminent collapse of 11 weeks of negotiations to reunite Ukraine's Orange Revolution allies.

The sticking point has been the job of parliamentary speaker, which both Our Ukraine and the Socialists have demanded.

"In connection with the Socialist Party's ultimatum relating to the post of parliamentary speaker, Our Ukraine considers future talks to form a coalition as pointless," Yushchenko's party said in a statement.

The Socialists were "acting irresponsibility before the Ukrainian people," the party said.

Socialist Party leader Oleksandr Moroz, who is his party's candidate for the speaker's job, countered that Our Ukraine had constantly shifting conditions that set the talks up for failure. He called on Yushchenko to intervene personally.

The failure by the three parties that supported the 2004 Orange Revolution to reach an agreement has left this ex-Soviet republic effectively rudderless, with neither the Cabinet nor parliament fully functioning. The disarray prompted U.S. President George W. Bush to put off a visit to Ukraine this month.

The parties halted talks on Saturday, and face a self-imposed Wednesday deadline to present an agreement to parliament.

Former Prime Minister Yulia Tymoshenko, who would get her old job back if the coalition forms, has accused Our Ukraine of purposely trying to sabotage the talks so it can pull out and form a coalition with the top vote-getter in the March parliamentary elections - the pro-Russian Party of Regions.

Yushchenko fired Tymoshenko eight months into his presidency, plunging their two parties into a bitter rivalry that has raised questions over whether they can reunite.

Initially, Tymoshenko's reappointment had been seen as the biggest obstacle, but Our Ukraine has acceded to Tymoshenko's demand that she become prime minister, while claiming the parliamentary speaker's job for itself.

The Socialists argue, however, that for the coalition to work, it must represent a balance of power, which could be achieved by them having the speaker's job.

Tymoshenko's bloc won more seats than Our Ukraine or the Socialists combined.


Ukraine's coalition talks 'fail'

BBC Reports

Our Ukraine place Ukrainian democracy in hold as they fail to negoitate a working coalition government.
Ukraine's coalition talks 'fail'
Ukrainian President Viktor Yushchenko's party has said talks to form the so-called Orange Revolution government have "no prospect" of succeeding.
Our Ukraine (NU) party has been trying to form a coalition with the Socialists and the Yulia Tymoshenko bloc since the election in March.

But the NU said the Socialists' demand to be given the post of parliamentary speaker caused the talks to break down.

The three parties led the revolution in 2004 that swept Mr Yushchenko to power.

"In connection with the Socialist Party's ultimatums about the post of speaker... Our Ukraine notes that further talks on the formation of a coalition have no prospect of success," the NU said in a statement.

"Our Ukraine regrets that the personal ambitions of the socialist leader have destroyed the negotiations on the creation of a coalition," it said.

The NU emerged as the second strongest "orange" party after the 26 March election - behind the Tymoshenko block but ahead of the Socialists.

The three parties have reportedly agreed that Yulia Tymoshenko would lead the government in a new coalition, but the speaker's post remains a major obstacle.

Under constitutional changes that took effect earlier this year, the post of prime minister will carry substantially more weight than before.

Mr Yushchenko's options now include entering into coalition talks with Viktor Yanukovych, who was his rival during the Orange Revolution.

Mr Yanukovych's Regions' Party polled the most votes in the March poll - but not enough to form a government on its own.


Sunday, June 11, 2006

Orange Coalition Break

Our Ukraine continues to undermine formation of a parliamentary coalition government

It is difficult to ascertain exactly what game play Our Ukraine are seeking having failed to secure support for the ousting of Yulia Tymochenko they are now seeking to de-rail the coalition agreement by going after the positions already allocated to the Socialist Party.
Media reports indicate that agreement has been reached which will see Yulia Tymochenko returned as Prime-Minister but ongoing infighting continues with Our Ukraine seeking the right to appoint the position of Speaker, denying the Socialists Party the right of securing this strategic spot.  Previous negotiations and agreements between Yulia Tymochenko bloc and the Socialist Party of Ukraine allocated the position of Speaker to the head of the Socialist Party.
Our Ukraine, which obtained less then 14% of the vote, already hold the influential and powerful position of President with the election of Viktor Yushchenko who was elected with the support of other coalition partners including Yulia Tymochenko and the Socialists.  There are many that believe there is a need for balance and that Our Ukraine should be satisfied with holding the President's position and could also hold/manage the major financial economic portfolios such as Treasury/Finance Ministries.
The Socialist Party secured 7.33% of the popular vote at the March 26 election (representing 33 parliament seats) The Socialists are a minor but significant party in the a three way formation of an 'orange coalition' agreement.  Many commentators believe that the allocation of the speakers position to the Socialist Party is fair and in the best interest of establishing and maintaining a working government. 
The Socialist Party are opposed to Ukraine becoming a member of NATO (North Atlantic Treaty Organisation) and some analysts are indicating that by going after the Speakers position, Our Ukraine can arrange a negotiated-trade-off of the Speakers position for concessions on Ukraine seeking membership of NATO.
It is always difficult to ascertain what policies are negotiable and what policies  included or excluded form the draft coalition agreement. It is difficult to see the pubic position of opposition by the Socialist Party to Ukraine's membership of NATO being compromised.
According to opinion polls most Ukrainians are opposed to NATO and any further decline in the relationship between Ukraine and Russia. Without Parliamentary support it would be difficult if not impossible for President Yushchenko to deliver on his promise of Ukraine joining NATO by 2008.
Our Ukraine in going after the Speakers Position are claiming that they where the second highest polling party and as such should have the choice of selecting who will be Speaker. Our Ukraine are once again playing a hard-line game where the stakes are high. 
Not only is the formation of the coalition at risk but also confidence in Ukraine's future. 
Already reports are filtering through where the constant delay in the formation of a working government is beginning to undermine public confidence and create economic uncertainty.  Something that Ukraine can ill-afford.
To add to the climate of distrust the Socialist's Party have hinted that they could opt for a coalition with the Party of Regions if they fail to secure the Speakers Chair in what they consider to be a fair but important position. If this happens Our Ukraine would further loose public support as they would be seen as the spoilers of the Orange cause which in turn would further undermine the role and position of the President.
Our Ukraine must decide, and do so quickly, its priorities, they must begin to compromise their position or face growing dissatisfaction and resentment about the process of reforms and their agenda.
Ukraine' Constitution allows up to one month from the first day of sitting (May 25) for the new Parliament to form a majority coalition government.  Should a government not be formed within that time the President has the power to dismiss the Parliament and force Ukraine back to the polls.  If this was to occur Our Ukraine would surly be the looser along with Ukraine and its desire to become an independent democracy.


Saturday, June 10, 2006

Business Confidence on the decline

Kyiv Post staff comments on constant delays in the formation of a governing coalition

Our concerns about the pending impact of delays in the formation of a parliamentary coalition government have been echoed in the analysts comments published in Kyiv Post. Overall I have found and consider Kyiv post to be a paper worth reading, their comments have been soundly based with minimal bias.  They seem to best understand Ukraine then the rhetoric that comes out of most western media that have no idea of what is really going on in Ukraine. We have decided to print in full this weeks comments.  past comments are also worth reading.   

by Roman Olearchyk, Kyiv Post Staff Writer
Jun 08 2006, 01:49

Ongoing bickering between Ukraine’s leading political camps and their failure to form a coalition government in a timely fashion has triggered a drop in consumer confidence, according to analysts, who also fear that investor confidence could decrease if a shaky coalition government with poor relations with Moscow is established.

According to a survey-based quarterly study conducted by GfK Ukraine (the Ukrainian affiliate of the international market research firm GfK-Group), and Kyiv-based International Center for Policy Studies (ICPS), the Consumer Confidence Index, a measure of the population’s confidence in the future, dropped by 6.6 points to 97.1 since February. The fact that the CCI value is below the 100-mark indicates that negative consumer confidence prevails in Ukrainian society, according to the study, which notes that “consumer confidence in Ukraine deteriorated due to the political uncertainty that has been prevailing in the country for more than half a year.”

“Apparently, the outcome of the [March 26 parliamentary] elections did not foster an increase in optimistic expectations in any of the regions across the country. Delays with the formation of a coalition and a new government reinforced the pessimistic economic expectations of Ukrainians,” the quarterly study concluded.

Since then, according to Yevhenia Akhtyrko, a senior economist at ICPS, confidence has not improved, as heated coalition talks between Ukraine’s leading political camps have stretched into their third month.

“I don’t think the situation has significantly changed since April,” she said.

Consumer confidence in Ukraine had crept back up into the positive range earlier this year, following a sharp decline last September, when political instability in the country was at a high for the year.

According to study organizers, the surge posted in February followed a slip in the consumer confidence that occurred last fall when the government of Yulia Tymoshenko was dismissed.

The study figure for December is only four points lower than the all-time high reported last spring, when Ukrainians felt optimistic in the wake of the Orange Revolution. The quarterly study is conducted using a poll of about 1,000 individuals aged 15-59, an age group that represents 61.3 percent of Ukraine’s population and the country’s most active consumers. The margin of error is 3.2 percent.

What Ukraine’s new government will look like and who succeeds in landing the prized prime minister post is, for some investors, more important than the delays in forming the country’s next government.

Tymoshenko, whose political bloc came out of the March 26 elections with a strong showing of support despite their falling out with Ukrainian President Viktor Yushchenko, is aiming to return to the country’s top government seat. Political allies of Yushchenko are allegedly attempting to block her return, fearing that she has become more popular than Yushchenko and is, as a result, well positioned to challenge him in the 2009 presidential elections.

In the near term, some investors trading in Ukrainian equity and debt also fear Tymoshenko’s return, citing her aggressive privatization review policy from last year and controversial price caps on fuel and other goods, which spooked investor confidence.

Tymoshenko has in recent weeks made efforts to calm investor fears, pledging to continue her campaign of fighting corruption in the economy while promising not to wage a massive privatization review policy and stick to liberal market reforms.

Besides Tymoshenko, other candidates have not publicly been discussed for the top government post of a renewed Orange coalition, yet insiders have said that coalition talks could stretch out into the summer, allowing current Prime Minister Yury Yekhanurov, a member of the pro-presidential Our Ukraine, to hold on to his post.

Tim Ash, an emerging markets analyst at the London office of Bear Stearns, is betting on the formation of a coalition between the Yushchenko-loyal Our Ukraine bloc and the Regions Party, led by Viktor Yanukovych, who lost the 2004 presidential elections to Yushchenko.

“I think there would be some nervousness over the return of an Orange coalition, given its previous disappointing performance,” Ash said. “My sense is that the general market view has been that Tymoshenko would ultimately fail in her quest to secure a return to office and that the next government would be a Regions of Ukraine-Our Ukraine coalition.”

One of the big fears, according to Ash, is whether the fiery Tymoshenko “can hold together a new Orange coalition, given the experience of in-fighting last time around.”

Ash sees Our Ukraine and Regions as center-right political forces backed by big business interests; Tymoshenko’s Byut bloc and the Socialist party, the other member of the planned Orange coalition, are more center-left political forces. A partnership between Our Ukraine and Regions would be more natural, according to Ash.

Should Tymoshenko return as premier, her challenge would be to normalize relations with Russia, which has threatened to raise natural gas prices for Ukraine further, after doubling them through a January accord. The return of Tymoshenko, who has criticized last January’s gas accord and threatened to oust the role of controversial gas-trading intermediaries, such as Swiss-based RosUkrEnergo, a company that earns billions dealing in gas between Ukraine, Russia and Central Asian countries, could cause relations with Moscow to intensify.

“They key for the market will be the relationship with Moscow, and I think there would be a desire for Tymoshenko to quickly work to normalize that relationship. If she doesn’t, then we may have a return to 2005, in effect, a running trade war with Russia, which would be damaging to the Ukrainian economy. In any effect, there is obviously a big question mark over the gas-pricing agreement with Moscow and the future of RosUkrEnergo in Ukraine, given Tymoshenko’s commentary on the issue,” Ash added.

Jorge Zukoski, president of the American Chamber of Commerce in Ukraine, a business advocacy group in Kyiv, said that the investment community is seeking a clear agenda of reforms and predictability from the next government.

“At the end of the day, both foreign and domestic investors are looking for predictability and stability in the market in which they commit resources,” Zukoski said.

“Moving the bar, backtracking on reforms and public political scuffles will only further confuse and frustrate investors at a critical time on Ukraine’s path toward integration with the larger global community,” he added.


Thursday, June 08, 2006

Government on hold

as President continues his world tour

Ukraine's Parliament met for 15 minutes yesterday (June 7) only to decide to adjourned for seven days to allow negotiations for the formation of a governing coalition. The cost of holding the 15 minute session must be considerable even in Ukrainian terms.  Accommodation, staff salaries and associated costs must rise into the thousands of dollars. 
Last week Yulia Tymoshenko claimed that the coalition would be finalised in time for June 7. The date came and went.  If this situation happened in the west there would be a serious crises of confidence as uncertainty brings instability. In the meantime Ukraine continues on as if nothing really matters or they have learnt to just take what comes.  In the end they fell they have no real say in what happens. It's all in the lap of the gods so to speak.
Ukraine's President, Viktor Yushchenko, continues his ongoing never ending travel abroad visiting the Netherlands.  His advice to the negotiators is to reflect on the wishes of the Ukrainian people who voptes over 2 months ago. (Its hard to know what to read into this statement) he also added that he has the power to appoint a number of the positions, implying that he intends to wield what little power he has. no one seams to have told him or he continues to deny the fact that Ukraine has moved on and adopted a Parliamentary democracy and that the President is no longer the head of government only a head of state. As such his role is somewhat different then it was in the past.  It seams that the President will continue to create more opportunity for the intelligentsia, lawyers and media junkies as Ukraine's Constitution is put through its paces.  in the end the President and his men are hoping that the system will collapse and they will have the chance of re-writing Ukraine's constitution, something the President has suggested but no one knows what it is he wants to change and put in its place.   


Social engineering at its worst

Language continues to be a weapon of divison

Polygot the way to go
If the ongoing language debate is anything to go by then this will certainly not be as straight forward as many would think.
A number of Eastern states (oblasts) have declared Russian as a second regional language. There is claims and counter claims that the adoption of a second language is contrary to Ukraine's constitution.  Others say it is in accordance with international treaties which protect the right of minority languages.  
It is difficult to know which way the debate will turn as Ukraine has not constitutional court or history of such deliberations. Can the constitutional court re-write the constitution or add meaning to a document where there is no clear intention or direction?
Ukraine's constitution states that Ukrainian is the official language but does this prevent additional languages being adopted? Ukrainian can not be struck-out but there is nothing that states no other language shall apply.
Ukraine is a country of multi-ethnicity.  It is diversity that adds to the excitement of this new country. Language should not be a point of division but this is exactly what is happening. Many Ukrainians do not speak Ukrainian let alone able to write or read Ukrainian.
There are many more important issue that need to be tackled and if Ukraine could only apply as much attention to the real issues as they do to the language debate then Ukraine would be better off.  I guess when there is no real solutions or popular policies then politicians need to play National card to try and stand out from the rest.  "I support Ukraine and I speak Ukrainian - via Ukraina, vote for me".
Yes, Ukrainian should be encouraged and should be a compulsory subject in school but should Ukraine only have one language? Many other countries have two or more languages and they are very successful. Some say English should as the new ionternational language also be adopted as an official language. Why not?
In Ukraine's past the Austrian-Hungarian empire  permitted the language that was most spoken in any given region and as such Ukrainian was used in parts of the what is now Western Ukraine. The polish tried to wipe it out as did the Russians.  Both were at fault as is the current Ukrainian policy (Socio-political engineering at its worst.)