CORE Metadata, citation and similar papers at core.ac.uk Provided by Policy Documentation Center International Centre for Policy Studies I NSIDE U KRAINE #6, March 2010 Inside Ukraine, #6, March 2010 Table of Contents NEWS OF THE MONTH 3 ISSUE OF THE MONTH 6 KEY EVENTS IN APRIL 16 Editorial Board Authors Gaspar BERGMAN Ivan POLTAVETS Head of Secretariat, Soderkoping Process, Senior Analyst, ICPS Kyiv [email protected] Rt Hon Stephen BYERS Ievgenii ROVNYI Member of Parliament (UK); Researcher, ICPS Chairman of the Board, YES [email protected] Vira NANIVSKA Director of the ICPS Nicu POPESCU Research Fellow, European Council on Foreign Relations Olga SHUMYLO ICPS supervisory board e-mail: [email protected] www.icps.com.ua/eng The opinions expressed herein do not necessarily reflect the views of Inside Ukraine’s editorial board, nor those of the ICPS Supervisory Board. Inside Ukraine, #6, March 2010 News of the Month The transition of power is over Coalition building: Mission complete The transition of power after a presidential run-off On 2 March, Speaker Volodymyr Lytvyn dissolved about five weeks ago is over in Ukraine. Although the “democratic coalition,” as it failed to provide former Premier Yulia Tymoshenko initially refused enough deputy signatures. The next day, the VR to recognize the victory of her rival, Viktor Yanu- passed a vote of non-confidence in the Tymoshenko kovych, it was a peaceful transition. As the third Government. peaceful transition of power in Ukraine, the coun- try’s democratic achievements—rare among FSU After a week of fruitless negotiations among fac- countries—merits applause. tions, it became clear that neither BYT nor NU-NS, the second and third largest factions in the legisla- The executive now stands consolidated with Presi- ture, would join a coalition with Party of the Regions. dent Viktor Yanukovych and Premier Mykola Az- But with individual members of each faction willing arov from the same party and supported by a ma- to consider such a coalition, the situational major- jority in the Verkhovna Rada that is both pro-presi- ity amended the VR Regulations to allow a coalition dential and pro-Cabinet. This fact alone should to be made not only of factions, as required by the improve the government’s ability to reach decisions Constitution, but also of individual deputies2. and to implement them, which will greatly improve Ukraine’s short-term prospects. The “Stability and Reform” coalition was formed on March, consisting of 235 deputies: the Party Financial markets have reacted positively both in of the Regions (PR), Communist Party (CPU) and Ukraine and abroad to the swift transition: Volodymyr Lytvyn Bloc (VLB) factions in their en- tirety, plus 6 deputies who crossed the aisle—six • Risk premiums paid on external Ukraine’s sover- each from BYT and NU-NS, and four others who had eign debt went down. left these factions earlier. • Ukraine’s stock market has gained 47% since the Deputies from both ruling and opposition factions beginning of the year, one of the best results for have requested the Constitutional Court of Ukraine world stock markets. to rule on the legitimacy of the new coalition. The President pledged to call snap elections should • Credit ratings, both sovereign and some corpo- the Court recognize that the coalition-building ap- rate, improved slightly. proach violated the Constitution. However, the short-term benefits of the fast transi- Moreover, the new coalition still has not proved its tion are counter-balanced by the lack of long-term decision-making capacity, as there have so far been stability in the current power set-up. The postpone- no votes on bills that might be divisive. ment of local elections, breaking the rules in cob- bling a coalition, and the public uproar over some appointments are all factors that will undermine the long-term stability of the current Government, leav- ing the threat of a snap Rada election in the air. 2 Legislation states that a deputy, who leaves the faction http://www.businessweek.com/news/200-03-5/ should lose the mandate. However, voting against the ukraine-stocks-climb-to-highest-since-june-2008-on- faction is permitted. It is unclear why BYT and NUNS imf-budget.html faction do not insist on implementation of this norm. 3 Inside Ukraine, #6, March 2010 Silence of the oppositions who was second runner-up in the Presidential elec- tion, took up his new position as Deputy Premier for After the fall of her Government, Ms. Tymoshenko the economy. He did that not only to the contrary to went into opposition and on 6 March, the three BYT his previous statements, but also agreed to a man- bloc parties and the five NU-NS bloc parties signed date with little capacity to implement his agenda. an agreement to establish an official opposition. Since Yulia Tymoshenko is not a sitting deputy, she Despite the seeming consolidation of the executive became head of the opposition’s coordinating coun- branch, some appointments could lead to competition cil and made Serhiy Sobolev, a BYT leader, premier between Presidential Administration and the Cabinet in the shadow Cabinet. of Ministers, though to a lesser degree compared to what happened under Viktor Yushchenko. Moreover, Other groups within NU-NS announced that they there are different business groups and interests rep- would form “alternative” oppositions. After talks resented within the Cabinet of Ministers itself. with Viktor Yanukovych about his possible role in a pro-presidential government went nowhere, Arseniy Kostiantyn Hryshchenko, a former Ambassador to Yatseniuk, the third runner-up in the Presidential the US and to Russia, is now Minister of foreign af- race, declared that in a matter of weeks he would fairs and Mykhailo Yezhel, a former Navy Admiral, present his own shadow Cabinet. Another NU-NS is Minister of Defense, the two positions directly ap- group Za Ukrainu led by Viacheslav Kyrylenko ap- pointed by the President. The appointment of Dmy- parently has no intention of joining any of the oppo- tro Tabachnyk, who has been criticized for his views sition groups, remaining in a political limbo. of Ukraine’s history and for remarks about Ukraini- ans from Western Ukraine, as Minister of Education So far, no actions by the President or Government and Science created a national uproar. action has caused major opposition comment. Other important appointments include those of bil- Appointments lionaire Valeriy Khoroshkovsky as chief of the SBU, the state security service, and Yevhen Bakulin as Not only did the President manage to secure a PR- president of NAK Naftogaz, Ukraine’s natural gas led coalition in the legislature, but he also had his monopoly. close ally appointed as Premier. Mykola Azarov, a former tax czar, First Deputy Premier and Minister Governors have already been changed in 7 oblasts. of Finance in both Yanukovych Governments, is a Both the Speaker and the Premier of Crimea were technocrat who will have to make a great number also changed. The bosses of law enforcement agen- of unpopular decisions. This appointment brought cies in many regions were replaced by representa- a long-awaited end to the standoff and confronta- tives from Donetsk Oblast. tion between President and Premier in Ukraine. Ser- hiy Liovochkin was appointed Chief-of-Staff in the Like the 2006 Yanukovych government, the 200 Az- Presidential Administration. arov government has only men. However, some key positions in the Yanukovych Administration have The new Cabinet of Ministers has a number of min- been filled by women from PR, including: Iryna Aki- isters with interests in big business. Andriy Kliuyev mova, First Deputy Chief-of-Staff and President’s became First Deputy Premier, Borys Kolesnikov was Representative in the Cabinet of Ministers; Olena appointed Deputy Premier for EURO-202 prepara- Lukash, First Deputy Chief-of-Staff and President’s tions, and Yuriy Boyko is now Minister of Fuel and Representative in the Constitutional Court; and Energy. Somewhat unexpectedly, Serhiy Tihipko, Hanna Herman, Deputy Chief-of-Staff. 4 Inside Ukraine, #6, March 2010 Visits West and East working agenda, compared to Brussels, because of the long decline in relations between Ukraine and President Yanukovych’s first official trip was to Russia. Russian Federation President Dmitri Med- Brussels on March. Mr. Viktor Yanukovych suc- vedev promised to revive the interstate bilateral ceeded in showing himself as a European politician commission, promote cooperation in energy and and a potentially reliable partner for the EU. The economic areas, and support the Ukrainian diaspo- President of the European Commission pledged to ra in Russia. It is likely that more specific points in conclude the EU-Ukraine Association Agreement, Ukraine-Russia relations will be decided at the level provide macro-financial assistance, and introduce of Premiers, between Mykola Azarov and Vladimir visa-free travel for Ukrainians. President Yanu- Putin. kovych confirmed the country’s goal to deepen po- litical and economic cooperation with the EU. In both capitals, Viktor Yanukovych assured his hosts that he would seek pragmatic, neighborly re- On 5 March, Mr. Yanukovych made his first official lations with them, and, thus, launched his multi-vec- visit to Moscow. The Moscow trip lacked much of a tor foreign policy. Testing President Yanukovych and his new team European Choice. Although President Yanukovych’s first foreign trip was to Brussels where he said that European integra- tion was a key priority in Ukraine’s foreign policy, he also added that Ukraine’s other priority was to enhance relations with Russia. Moreover, there is not a single word about European integration in the new coalition agreement, while there is a paragraph on strengthening mechanisms for bilateral relations with the Russian Federation and a paragraph on economic integration in the post-Soviet arena based on Ukraine’s national interests.