Viktor Luhovyk of Dragon Capital -
Ukraine's Constitutional Court On September 23 started hearing an appeal submitted by lawmakers from the ruling coalition who asked to void 2006-enacted amendments to the constitution that imposed curbs on presidential authority. The verdict, favouring President Viktor Yanukovych, is expected to be announced as early as this week.
The contemplated transition to the system of government Ukraine had before 2006, with the president empowered to name and dismiss the government, will in all likelihood not trigger fresh political turbulence provided the incumbent president resists the temptation to bypass existing legislative procedures. If successful, the enactment of a new constitution will in fact legitimize the presidential powers that Yanukovych is already exercising informally vis-Ã -vis the parliament-appointed cabinet and should therefore be conducive to effective and coherent decision-making in the executive branch. No less importantly, imminent reform of the existing constitution, whose inconclusive and inconsistent provisions on the division of authority are to a large extent to blame for the protracted political turmoil Ukraine endured prior to the latest presidential elections, is in itself a positive development despite the obvious personal political gains Yanukovych is thereby seeking to extract.
The Constitutional Court proved loyal to President Yanukovych on one important occasion earlier this year, allowing individual parliamentary deputies as well as party factions to form coalitions and thereby giving Yanukovych's Party of Regions the means to assemble a majority it otherwise lacked. Moreover, following a recent reshuffle that saw four judges loyal to the president join the Court, only three out of its 18 judges are said to be opposed to the verdict the ruling coalition is trying to win. Its appeal is based on procedural violations, namely parliament's failing to agree the final version of the amendments with the Constitutional Court despite an explicit legislative requirement to the effect.
In a nutshell, by seeking to repeal the aforementioned amendments, Yanukovych is aiming to reinstate the semi-presidential system of government which was introduced by the original Ukrainian Constitution in 1996, but changed to a parliamentary-presidential system during the Orange Revolution of 2004 as part of a compromise between authorities and opposition (the constitutional amendments themselves went into effect in 2006 and have been unchanged since). Under the old system, the president could almost single-handedly appoint and dismiss the government and enjoyed greater flexibility in vetoing laws, while currently control over the executive rests largely with parliament.
While the passage of a new constitution and revision of related laws promises to be a lengthy process, below we lay out our preliminary view on key implications the return to the semi-presidential (presidential parliamentary) system will carry. Provided the new constitutional process follows established parliamentary procedures rather than is arbitrarily decided by the president, we do not expect it to lead to a new bout of political instability given what seems to be overwhelming support for the new institutional setup in the ruling party.
The passage of a new constitution will be gradual in the base case scenario, involving approval at two consecutive parliamentary sessions, with the final vote requiring a 2/3 majority of 300 votes, which the ruling coalition currently lacks (to lure additional opposition votes, the Party of Regions reportedly considers adding a transitional clause extending current parliament's term in office by three years, until 2015, when next presidential elections are due).
Under this plan, the revised constitution might be approved first at the current parliamentary session ending in January and then at the following session beginning in early February. The legal mechanism for enacting the new constitution is unclear yet, as both the president and the ruling coalition obviously want to avoid early elections; besides, this will necessitate a revision of a number of laws (eg. legislation on the Cabinet of Ministers) so that they do not contradict the new fundamental law.
In connection with the above, it should be noted that, as some observers argue, Yanukovych may want to interpret the prospective abolition of the constitutional amendments as reinstating the 1996 constitution with immediate effect. Besides the obvious legal chaos such an abrupt transition will create, it would also lead to parliamentary elections being scheduled for March 2011 – this is because the current legislature was chosen in 2007 and its four-year term (as prescribed by the old constitution) expires next year. Moreover, the election campaign under this scenario would have to start already in November. We think this is an unlikely outcome as it is detrimental to the ruling party in view of its falling approval ratings.
The 1996 constitution did bestow greater powers on the president, but by no means as expansive as those enjoyed by presidents in Russia and most other CIS countries. Indeed, ex-president Leonid Kuchma, whose urge for an unchecked presidency kept him at constant war with parliament during his 1994-2004 term in office, did not achieve much in this power struggle, including the failure to legitimize results of a 2000 national referendum that effectively endorsed a full presidential system. Moreover, it was Kuchma who first tried to push through legislation turning Ukraine into a parliamentary presidential republic at the end of his second term after it became clear he would not run for a dubiously substantiated third term and his chosen successor (Yanukovych) was likely to lose to opposition candidate Viktor Yushchenko.
If the old constitution returns, it in fact will only legitimize the status quo: although existing legislation gives the president only limited authority over the government, this does not stop Yanukovych giving commands to the cabinet and the latter complying with them as if the 1996 constitution were already reinstated.
More importantly, as both the current ruling coalition and opposition have long argued, the disputed constitutional amendments effectively set off years of political turmoil that plagued Ukraine until the latest presidential elections due to failing to provide a clear division of authority between the president, government and parliament. Replacing the document's vague and inconsistent clauses governing the division of powers is therefore crucial to ensuring domestic politics does not turn tumultuous and unpredictable again.
Graham Stack in Kyiv - Ukraine's largest lender PrivatBank has survived a stormy week of speculation over its future, but there are larger rocks ahead, with some market participants anticipating the ... more
Henry Kirby in London - Ukraine and Russia’s latest “Despair Index” scores suggest that the two struggling economies could finally be turning the corner, following nearly two years of steady ... more
bne IntelliNews - Erste Group Bank saw the continuing economic recovery across Central and Eastern Europe push its January-September financial results back into net profit of €764.2mn, the ... more