Tymoshenko inches closer to Ukraine premiership after coalition formed

By bne IntelliNews November 30, 2007

Roman Olearchyk in Kyiv -

Yulia Tymoshenko, a charismatic and uncompromising politician, inched closer to becoming Ukraine's next prime minister after a majority coalition was officially formed in parliament between her bloc and the allies of the pro-Western president, Viktor Yushchenko. Even so, she still faces a big hurdle in mustering parliament approval from the presidential bloc for her candidacy. Viktor Baloga, Yushchenko's chief of staff, is orchestrating moves against her and is reportedly holding talks on forming a coalition with the Regions party led by the outgoing PM, Viktor Yanukovych.

On November 29, two months after Ukraine's snap parliamentary elections, lawmakers from Tymoshenko's bloc and the pro-presidential Our Ukraine grouping formally established a majority coalition in parliament. The development provides fresh energy to the prime ministerial ambitions of Tymoshenko, who has struggled to win over support of presidential allies since her bloc's surprisingly strong finish in the September 30 parliamentary elections.

While Tymoshenko is expected to back Yushchenko's speedy Western-integration agenda, the president's allies worry that she will simultaneously use the job as a springboard to challenge him in a presidential campaign that kicks off in 2009.

After the coalition was formed, Tymoshenko said a vote on her candidacy and approval of a new parliament speaker could happen the following week. But there are doubts whether her new government will take over in time to have a say in the crucial talks with Gazprom over the price of gas imports for next year, which need to concluded by New Year. Gazprom earlier this week announced it had accepted steep price increases on gas bought from Turkmenistan which it then resells to Ukraine.

Tymoshenko is a polarising figure in Ukrainian politics, loved by her supporters but loathed by domestic political opponents and Moscow. In recent weeks, she has struggled to muster support for a razor-thin coalition backing her premiership. A handful of influential pro-presidential lawmakers have refused to back a Tymoshenko-led coalition. "We have to learn to trust each other, as we will have to work together for many years," she said on November 29 after the coalition was formally established. But trust from presidential allies in Tymoshenko is as fragile as her governing coalition would be.

About seven lawmakers in the pro-presidential Our Ukraine-People's Self Defence bloc have in recent weeks refused to back a Tymoshenko-led coalition. Several of them are close associates of presidential administration chief Baloga, who has reportedly held secret coalition talks with Yanukovych's Regions party. Their view, according to sources, is that both groupings share common business interests. They also hope to agree a future alliance in which Yushchenko's presidential re-election bid would be supported by Regions. The thinking behind this is that Yanukovych poses less of a threat to Yushchenko's re-election chances than the charismatic and increasingly popular Tymoshenko.

However, the rift within Yushchenko's Our Ukraine grouping between the majority of lawmakers who support a coalition with Tymoshenko and the small group of holdouts became an embarrassment for the president. After the opposing sides criticized each other on television, Yushchenko, fearing a backlash from voters, held special talks with the holdouts loyal to his chief of staff, urging them to back the Tymoshenko-led coalition deal. All except one, former national security chief Ivan Pliusch, signed the coalition deal.

The rebels' main lever of influence has in recent weeks centred on the power struggle for the post of parliamentary speaker. The coalition deal gives Tymoshenko's bloc the rights over the PM job, leaving the Our Ukraine group to choose the speaker. The coalition deal originally envisioned the speaker job going to Our Ukraine leader Vyacheslav Kyrylenko, who is increasingly viewed as a Tymoshenko loyalist. But pressure from Baloga and his allies forced Kyrylenko to withdraw his candidacy.

The president then sought for Pliusch to become the new speaker, but Pliusch's open calls for a broad coalition that would include Yanukovych's Regions party alienated most Our Ukraine's lawmakers. While many pro-presidential lawmakers don't oppose an alliance with Regions in principle, they fear doing so would be seen by voters as a betrayal of Orange Revolution ideals. In turn, their dwindling electoral support would shift to Tymoshenko's bloc, further raising her chances in a presidential contest.

Although no official decision has been reached, Yushchenko last week pitched another candidate for speaker, Foreign Minister Arseniy Yatsenyuk. Highly trusted by Yushchenko, the 33-year-old Yatsenyuk is viewed as a politician with a bright future and has been floated as a possible premier in a Regions-Our Ukraine coalition. In a recent interview with the BBC, Yushchenko described Yatsenyuk as a figure who could establish constructive relations with an influential opposition led by the Regions party, itself backed by some of the country's richest tycoons.

One of the holdouts opposing the Tymoshenko-led coalition, lawmaker and businessman Viktor Topolov, warned that a failed vote on Yatsenyuk's candidacy for speaker would doom the chances of a coalition with Tymoshenko. "Let it be clearly understood: a negative result on the vote for Arseniy Yatsenyuk's candidacy would place a fat cross on the coalition."

Tymoshenko's second coming

Should she become PM, it would be her second tenure as premier, Tymoshenko is expected to pursue a more cool-headed, investor-friendly approach than when she briefly led the government in 2005 before falling out with the president.

A Tymoshenko-led government this time around is expected to stick with its anti-corruption agenda and transparent privatisation auctions, though it's expected to back off from aggressively trying to overturn past dodgy privatisations.

The passage of liberal reforms is expected to be mixed with populist increases on social spending. Raising pensions and salaries for state employees, such as teachers, should be expected. High inflationary pressures have squeezed the pockets of many Ukrainians, making such populist policies difficult to avoid.

A key challenge, however, will be passage of political reforms needed to bring clarity to the division of authority between various branches of government. Vague political reforms adopted in the heat of the Orange Revolution have left gaping holes in the constitutional order, leaving questions of which branch of government has how much authority up to interpretation. This has been a major source of instability in recent years. While 226 votes are required to pass most legislation, adoption of constitutional changes requires a so-called constitutional majority, or 300 votes. Adopting such reforms would require support from Yanukovych's Regions party, which has every interest to sabotage a Tymoshenko-led coalition, rather than cooperate with it.

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Tymoshenko inches closer to Ukraine premiership after coalition formed

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