No. 2 THE UKRAINIAN WEEKLY SUNDAY, JANUARY 14, 2007 5 2006: THE YEAR IN REVIEW ministership. It was Socialist Party leader Oleksander Ukraine: Rada elections Moroz who tipped the scales in Mr. Yanukovych’s favor, making the surprise announcement on July 11 that he was abandoning the coalition agreement he had and coalitions in the news signed with his former Orange Revolution allies. The same day the Verkhovna Rada voted to approve istoric political events were taking shape the his nomination, Mr. Yanukovych reappointed the same minute Ukrainians rang in the new year on vice prime ministers who had worked with him when he January 1, 2006. On that day, Ukraine became a H was prime minister during the Kuchma years between parliamentary-presidential republic for the first time in 2002 and 2004. The Yanukovych coalition government its 14 years of independence because of constitutional successfully introduced stability into Ukrainian politics, changes President Viktor Yushchenko agreed to during while political observers mostly agreed that coalition the tense negotiations to peacefully resolve the Orange leaders resorted to largely the same governing tactics, Revolution of 2004. political priorities and economic policies established The constitutional changes, therefore, elevated the during the Kuchma administration. March 26 parliamentary elections to unprecedented Though Mr. Yushchenko had accepted Mr. importance because the resulting government would then select the prime minister, whose powers were now Yanukovych’s nomination as prime minister based on significantly enhanced, as well as most of the Cabinet the Universal of National Unity signed by four of the of Ministers. As a result, the government would control five political parties elected to Parliament, it proved to both Parliament and the Cabinet. be a flimsy agreement. Once entering office, the Party Relations between the Russian Federation and of the Regions began an aggressive campaign of usurp- ing power within the Ukrainian government that extend- Ukraine also underwent historic changes on January 1, Two Viktors on August 4: newly approved Prime ed as far as the president’s domain of foreign policy. the day when Russian state-owned monopoly Gazprom Minister Yanukovych with President Yushchenko. cut natural gas supplies to Ukraine after the government By the year’s end, a fierce political battle had erupted led by Prime Minister Yurii Yekhanurov refused a four- between President Yushchenko and Prime Minister Yanukovych over the fate of Minister of Foreign Affairs when officials from Gazprom and the shady natural gas fold price increase. Until then, Ukraine had enjoyed a trading company RosUkrEnergo stepped in and reached generous price of $50 per 1,000 cubic meters of natural Borys Tarasyuk, whom the coalition government dis- missed in a December 1 parliamentary vote. It proved a preliminary agreement that satisfied both govern- gas, largely because of compliant foreign policy led by ments. Nearly four months later it was revealed that former President Leonid Kuchma. the most significant test of Mr. Yushchenko’s ability to defend the Ukrainian presidency. Even as the year drew RosUkrEnergo is part-owned by two Ukrainian nation- The crisis sharply affected European natural gas sup- als, Dmytro Firtash and Ivan Fursin. The other half is to a close, it remained unclear whether Mr. Tarasyuk plies and ignited concern among European leaders over owned by Gazprom. would remain as Ukraine’s foreign affairs minister. Russia’s use of energy supplies as a foreign policy tool Gazprom, which wanted to raise prices for Ukraine to pressure Ukraine’s internal politics. At the time, Mr. Natural gas crisis fourfold from the price of $50 per 1,000 cubic meters, Yushchenko’s administration was asserting a highly agreed to sell its natural gas at $230 per 1,000 cubic independent Ukrainian foreign policy, which displeased As the majority of Ukrainians enjoyed New Year’s meters to RosUkrEnergo, which agreed to combine the the Russian Federation. Three days after the cut-off, Mr. Day at home with their families, they were treated to Russian gas with two-thirds cheaper natural gas, mostly Yekhanurov agreed to a 90 percent increase in the price television news reports of the Russian Federation cut- from Turkmenistan, and resell it to Naftohaz, the Ukraine pays for natural gas, a move that drew sharp ting off natural gas supplies. Ukrainian government’s natural gas distributor, for a criticism from Ukraine’s Parliament. The energy crisis is widely believed by political more affordable price of $95 per 1,000 cubic meters. The biggest political event of the year, however, was observers to have been a deliberate ploy by President Another key provision in the agreement, which man- the March 26 parliamentary elections. As expected, the Vladimir Putin to discredit the Yushchenko-Yekhanurov aged to offset the burden of higher natural gas prices, Party of the Regions dominated, winning 32 percent of government in front of the Ukrainian electorate as par- required Gazprom to pay a 47 percent increase in transit the vote. It was the Yulia Tymoshenko Bloc that sur- liamentary elections loomed less than three months fees through Ukrainian-owned pipelines. The prised political observers by finishing far ahead of the ahead. Yekhanurov government ended the tradition of bartering Our Ukraine bloc, winning over many of its supporters While Mr. Yushchenko and his team were wrestling transit fees for natural gas, which had been employed and finishing in second place with 22 percent of the with a crisis, Party of the Regions campaign ads por- during the Kuchma years. vote. traying a calm Mr. Yanukovych promising Ukrainians Compounding the political attack from the Russian The Our Ukraine bloc finished in third place with 14 stability dominated the commercial breaks of most net- Federation was the Verkhovna Rada’s vicious reaction percent. Two more parties surpassed the 3 percent barri- works. to the natural gas deal from virtually every political er to qualify for seats in the Ukrainian Parliament: the Meanwhile, Italy lost 25 percent of its natural gas force. The Party of the Regions alleged the Yekhanurov Socialist Party of Ukraine won six percent of the vote, supply on January 1, France lost 30 percent and Poland government had damaged relations with the Russian while the Communist Party of Ukraine managed to lost a third. Federation, while the Yulia Tymoshenko Bloc claimed hang around for one more term by winning 4 percent. The next day, Gazprom accused the Ukrainian gov- the government made too many concessions. Unexpected was the Party of the Regions’ success in ernment of siphoning off 100 million cubic meters of During the January 10 session, 250 national deputies forming the parliamentary coalition government, elevat- natural gas worth $25 million from the transport voted in favor of a no-confidence vote to dismiss Mr. ing its leader and Mr. Yushchenko’s Orange Revolution pipelines during the 24 hours after it cut supplies. Yekhanurov and his Cabinet of Ministers. Mr. rival Viktor Yanukovych to Ukraine’s powerful prime On January 4 natural gas supplies were restored Yushchenko insisted the Ukrainian Parliament didn’t have the right to dismiss, even after the constitutional changes. The Verkhovna Rada’s dismissal decree stipu- lated that the Yekhanurov government keep working until a new parliamentary coalition is formed after the March elections. The Yekhanurov government remained in place without Ukraine’s Constitutional Court ever determining whether it was truly dismissed or not. The no-confidence vote revealed the vulnerable state in which the Our Ukraine bloc found itself in the new year, without any allies among the other major political forces. The January 10 vote was “incomprehensible, illogical and incorrect,” Mr. Yushchenko said. “I don’t believe Ukraine deserves this kind of a decision 80 days before the parliamentary elections.” On January 12 Mr. Yushchenko announced he was withdrawing his signature from the Memorandum of Understanding Between the Government and the Opposition that he signed with Mr. Yanukovych on September 22, 2005. The opposition had violated the agreement’s fundamental principle, Mr. Yushchenko said, which was “cooperation in taking common actions towards stabilizing the internal political situation in Ukraine.” Parliamentary-presidential republic When the new year arrived, Ukrainians were aware that significant constitutional changes went into effect. However, many were still unclear about how far-reach- ing they would be. As later revealed, the January 1 con- stitutional changes significantly shifted the balance of A depiction of the array of Ukraine’s political forces prepared at the time of the March parliamentary elections. power in the Ukrainian government in favor of the Source: http://www.politikan.com.ua/images/14_0_0/2006/02/21/plakat1.jpg. Verkhovna Rada and the prime ministership. The 6 THE UKRAINIAN WEEKLY SUNDAY, JANUARY 14, 2007 No. 2 2006: THE YEAR IN REVIEW changes stripped the Ukrainian president of the authori- votes. The only question was how dominant their share ers were overconfident in their mismanaged parliamen- ty to appoint Cabinet ministers, with the exception of of the popular vote would be. tary campaign and misunderstood public opinion of the foreign affairs and defense ministers, which kept Disgraced during the 2004 presidential campaign, the their political bloc. foreign policy within the president’s domain. Other Party of the Regions