COMMENT: Ukraine's odd couple to break president's hold on power

By bne IntelliNews September 15, 2008

Geoff Smith in Kyiv -

It's so confusing out there that somebody is going to get stabbed in the front by mistake if they're not careful.

At the time of going to press, the clock is running down on the defunct second "Orange" coalition. Either it must be re-formed, or a new coalition created, or the Verkhovna Rada dissolved and pre-term elections called.

The most likely outcome at present seems to be a new coalition of the Party of Regions and the Bloc Yulia Tymoshenko (BYuT), which would command a majority able - and apparently willing - to ram through changes to the Ukrainian constitution and create a parliamentary republic. Unlikely as the union seems, it has the ability to change Ukrainian politics radically, commanding 331 of the 450 seats in the Rada - comfortably over the two-third majority threshold required for constitutional changes. With that kind of majority, it could represent Ukraine's best chance in years for radical reform.

It's easy to say that the union is an unnatural one, born of expediency and doomed to a short life by its many internal contradictions. Yet, in reality, there are few ideological obstacles to it. The usual Labour versus Capital struggle doesn't apply here - both sides have half a dozen billionaires in their parliamentary parties, but both have pumped up social spending when they have had the chance. Each accuses the other of irresponsibility - and worse - in the arrangements they make regarding Russian gas supplies. Each accuses the other of a naked and unprincipled lust for power. In fact, if you took many of their quotes in isolation, you would be hard pressed to say who was bad-mouthing whom (unless the gender of the adjectives gave it away).

Crucially, the two are closer to each other on the key issue of the day - the avoidance of armed or economic conflict with Russia - than either is to President Yushchenko and his stridently pro-Nato, pro-Georgia camp (not that a Regions-BYuT coalition would mean the abandonment of Ukraine's integration into the European and world economies - it was a Regions-led government that did most of the spadework on WTO accession, and Tymoshenko is avowedly pro-EU). Just as importantly, both feel that their attempts at governing in the last two years have been undermined by a fickle presidential administration that has become more and more desperate to keep power concentrated in its offices as its influence in parliament has shrunk.


It was against this background that the two joined up on the Rada's first day back from the summer holidays to pass four bills effectively emasculating the presidency: restricting his right to veto legislation, to appoint the management of the secret service and to block government decrees by referring them to the Constitutional Court. Whatever reservations one may have about the laws' origins and their authors, this is still a clear victory for democracy: nothing of the sort would have been imaginable under Leonid Kuchma, or under most of the current presidents of the CIS members.

To his credit, Yushchenko has ruled out the use of emergency powers (the silovoy variant) to defend himself. Instead, has promised to veto the laws, which, given the minuscule chance of popular protest in his defence, is about all he can do. It seems inconceivable that he will accept the humiliation of renewing the Orange coalition on Tymoshenko's terms, although a good 30 of the Our Ukraine-People's Self-Defence deputies would rather do that than lose their current status.

Yushchenko's only other hope is that the deadline for forming a new coalition passes without a formal agreement by the PR and BYuT, which would allow him to dissolve the Rada and call new elections before the Constitutional Court rules on the inevitable appeal over the legality of the September 2 laws. Otherwise, the ruling that could prise Yushchenko's remaining fingers off the levers of power. But elections would be unpopular, and there is no guarantee that Yushchenko's allies would be the first choice of coalition partner for the bigger blocs. Moreover, they would be hideously expensive at a time when money is getting much harder to come by.

Thus, the vital question now is how effectively Tymoshenko and Yanukovych can ever work together. Yanukovych wrote in Komsomolskaya Pravda last week that it would be desirable if this "temporary alliance... transformed itself into a broad political front."

Those who can remember even a fraction of the insults that these two have traded over the last four years must think they have stepped into something concocted jointly by Lewis Carroll and Salvador Dali. They should not rule out the risk that Ukraine's political system is maturing, however unconsciously. Tymoshenko and Yanukovych have a chance to prove that they have tired of deadlock, that they accept that power must be shared and exercised with restraint, and that they realize how urgently effective government, reform and privatization are needed. It could be beautiful - but don't hold your breath.

Send comments to The Editor

Related Articles

Ukraine's largest PrivatBank faces down nationalisation fears

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

bne:Chart - Russia begins to steady the ship according to latest Despair Index

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

Austria's Erste rides CEE recovery to swing to profit in Jan-Sep

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

Register here to continue reading this article and 2 more for free or 12 months full access inc. Magazine and Weekly Newspaper for just $119/year.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

IntelliNews Pro subscribers click here

Thank you. Please complete your registration by confirming your email address. A confirmation email has been sent to the email address you provided.

Thank you for purchasing a bne IntelliNews subscription. We look forward to serving you as one of our paid subscribers. An email confirmation will be sent to the email address you have provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

If you have any questions please contact us at

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

IntelliNews Pro subscribers click here

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

If you have already registered, enter the information below with the same email you used previously and you will be granted immediate access.

Thank you. Please complete your registration by confirming your email address. The confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.