Ben Aris in Moscow -
A grenade thrown by nationalists at police outside Ukraine's parliament may only be the beginning of troubles for Ukrainian President Petro Poroshenko, who is facing a stark choice between enraging violent nationalists or condemning his country to further military destabilisation by Russia.
The grenade was thrown at police from out of a crowd of protestors outside Ukraine’s parliament building on August 31, killing at least one policeman and injuring around 90 other policemen and bystanders, including journalists. The crowd had gathered to protest against the controversial law on decentralization of political power in the country, handing more control to local governments that is part of the Minsk II agreement that is supposed to bring the fighting in eastern Ukraine to an end. According to initial reports, the man who threw the grenade has already been arrested.
The incident highlights the painful political process Ukraine is going through. On the one hand President Poroshenko desperately needs to bring peace to the east before serious the task of reform and restructuring can begin. The country has been torn apart by split loyalties; with those in the western part of the country leaning towards Europe, while those who live in the east want to maintain a closer relationship with Moscow.
The vote on decentralization epitomizes the political Hobson’s choice faced by President Poroshenko. Some form of devolving power to the regions was an integral part of the Minsk agreement signed at the end of last year. However many see any concession to the Kremlin as betrayal. For others, a token decentralization will be insufficient.
Poroshenko is damned if he concedes to a meaningful decentralization, as he will be punished at the polls by western Ukrainians. But he’s also dammed if he doesn’t put into place a meaningful decentralization, as the peace accord will fail and Russia will continue to destabilize the eastern part of the country.
As bne IntelliNews reported, Poroshenko and the other liberals leading the government have already been punished in opinion polls, seeing their popularity shrink to single digits in some cases. After little more than a year in office, Poroshenko and Prime Minister Arseniy Yatsenyuk’s confidence ratings are sitting at less than 50%, according to a poll by the Kyiv Institute of Sociology.
The People's Front party founded by Yatsenyuk and allies has effectively thrown in the towel, announcing that it will not even participate in local elections on October 25 that are also part of the Minsk II peace agreement. The move follows a catastrophic drop in the party’s ratings to under 3%.
The Ukrainian Democratic Alliance for Reform (UDAR) party led and founded by former world boxing champion and Kyiv mayor Vitali Klitschko has also decided to merge completely with the Petro Poroshenko Bloc going into the local elections.
The liberal leaders of Ukraine are facing a political crisis. Despite the promise of a better future in the long term if Ukraine turns towards Europe, in the short term it is an extremely painful process. The embattled population is bearing the brunt of the economic collapse. In the meantime standards of living are plummeting, Ukraine’s Misery and Despair Indices have soared, and the harsh winter is coming. Rather than leading Ukraine to a prosperous future in the arms of the EU in the long term, from street level the liberal leadership seems to be leading itself to a electoral defeat in the much shorter term in crucial regional elections slated for October 25.
Opposition firebrand Yulia Tymoshenko has been waiting quietly in the wings, casually sniping at the Poroshenko government, and increasingly is finding her mark; Tymoshenko and Poroshenko are now running neck and neck in the popularity polls.
The liberal leaders are circling their wagons and will in effect turn the upcoming local elections into a referendum on which direction Ukraine will go. The goal has become political survival in an effort to buy time for the swing to the EU to pay some dividends.
“Klitschko’s decision to merge with the president’s party, and thereby gain its administrative backing for the October mayoral vote, virtually ensures that he will remain as Kyiv mayor until 2020. That will give him five years to prove whether he’s a presidential contender, or launch a new political party in case Poroshenko’s Solidarity project derails. On the other hand, if Poroshenko’s presidential term is successful, Klitschko can aim for re-election. It’s a win-win situation for the boxing great,” said Zenon Zawada, an analyst with Concorde Capital in Kyiv.
“As for Yatsenyuk, he’s also demonstrated himself to be a slippery, versatile political creature. Rather than fulfilling his prophecy of becoming a kamikaze and crashing in the local elections (with his party’s poll ratings lower than 5%), he is preserving himself as a player in the pro-Western establishment by aligning himself with the president in this election,” Zawada added.
The passage of the decentralization bill on August 31 is only one of several painful concessions Ukraine will have to make to meet the terms of the Minsk II agreement. The Rada passed the bill in the first reading. These amendments were proposed by President Petro Poroshenko but only supported by 265 lawmakers, but it needs a super-majority of over 300 votes in the next of a total of three readings to make changes to the Constitution.
In the meantime there is already fighting on the streets of Kyiv again as the two sides square off to make their voices heard. Analysts haven’t started speculating that another Euromaidan is on the cards, but political tensions are high and Ukraine is facing another difficult winter.
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