Ukraine's tug-of-war over cabinet intensifies

Ukraine's tug-of-war over cabinet intensifies
Ukrainian President Petro Poroshenko with Prime Minister Arseniy Yatsenyuk and US Secretary of State John Kerry
By Sergei Kuznetsov February 2, 2016

Ukrainian political forces from the ruling coalition have begun a new round of infighting over a possible reshuffle of the government in Kyiv. While all sides seem to agree that new faces are needed in the cabinet, the chances that Prime Minister Arseniy Yatsenyuk will be forced to leave his post are slim, unless there is an extraordinary upheaval in his relations with President Petro Poroshenko.

"If Yatsenyuk proves able to agree to a new team of professionals [in the cabinet] who will gain support of the coalition factions, we will have a new Yatsenyuk-led government and an efficient majority [in Ukraine's parliament] to pass necessary laws," Yuri Lutsenko, the head of the Petro Poroshenko Bloc parliamentary faction, told the Inter television channel on January 31, evidently also trying to avoid direct confrontation with the premier.

There is indeed little sense in starting a new round of verbal battle with Yatsenyuk and his allies when they have a reliable weapon against attempts to oust the cabinet chief: in the case of a vote of no confidence in Yatsenyuk, other factions will be unable to find a compromise figure able to obtain the necessary 226 votes of lawmakers without the votes of his People’s Front.

More importantly, any serious bid to topple Yatsenyuk and form a new government without him will trigger the collapse of the ruling coalition and necessitate snap elections to the Verkhovna Rada legislature.

However, Poroshenko Bloc politicians seem to be aware of the cost of this step: "We will spend a billion of state funds and waste four months of political time to elect the same lawmakers," Lutsenko said.

Ukraine's Western backers and international donors will not wish to see a rush to stage new polls in the war-torn country, whose economy bottomed out in 2015 with estimated full-year contraction between 11.5% y/y and 13.0% y/y, and cautious growth at 1.1% y/y.

Meanwhile, the government is preparing its annual official report on the cabinet's work in its first year in office, due for release on February 16. If the government's performance is recognised as unsatisfactory, the Rada could initiate a vote of no confidence in Yatsenyuk and his cabinet.

Parliamentary speaker Volodymyr Hroysman noted on February 1 that Yatsenyuk's address to the house on December 11, which ended with a Poroshenko Bloc members giving the prime minister a bouquet of roses and trying to physically drag him from the rostrum, was not the government's formal report.

"That was the government's information [during a regular questions and answers session in the parliament], now we come to the report of the government as it is envisaged by law," Hroysman said.

"We demand resignation"

"The cabinet should resign and be replaced with people who are at least able to appoint adequate managers of state enterprises," Oleh Bereziuk, the head of parliamentary faction of another member of the ruling coalition, the Samopomich (Self Reliance) party, said emotionally in the Rada on January 29. The lawmaker was upset by the government’s failure to appoint managers to some leading state-owned enterprises, specifically the Boryspil and Lviv airports.

Samopovich lawmaker Tetiana Ostrikova confirmed this stance towards the government.

"The faction has decided to express no-confidence in the incumbent government and we demand its resignation, including the resignation of the prime minister, who has failed to conduct reforms," Ostrikova explained in a January 31 interview with 112 TV channel.

Ostrikova added that the party could consider leaving the coalition if its demands are ignored. "If the government has not been completely replaced, we will separately address the question of leaving the coalition depending on whether we will be represented in such a government and how we will be presented there," she said. 

However, it looks like the party's members are just bandying the threat around at the moment than actively preparing to abandon the coalition. According to unnamed sources of the Kyiv-based Ukrayinska Pravda news outlet, the leader of the Batkivshchyna (Fatherland) party, former prime minister Yulia Tymoshenko, raised the idea of withdrawal from the coalition with Samopomych's leader Andriy Sadovyi, the reform-minded mayor of the western city of Lviv. However, Sadovyi reportedly refused.

Rather Sadovyi showed that his position voiced in an interview with bne IntelliNews in September 2015, is still in force. "If the parliament collapses, this will definitely be exploited by our [Ukraine's] enemies. That is why we will stay in the coalition until there is a prospect of change," Sadovyi said at the time.

Back and forth

Meanwhile, Oleh Liashko, leader of the Radical Party leader, which exited the ruling coalition in 2015 after the Rada passed in the first reading controversial constitutional amendments that saw deadly clashes between the police and far-right activists, touted his party's possible return to the coalition.

According to Liashko, the faction is ready to join any parliamentary coalition unless it is formed with participation of the pro-Russian Opposition Bloc. The Radical Party had sent Poroshenko, Yatsenyuk and Hroysman its economic and political demands, Liashko told journalists in Kyiv, as a condition for its return to the ruling coalition.

In particular, Liashko demands the resignation of Prosecutor General Viktor Shokin and central bank governor Valeriya Gontareva, and a ban on any special status for the Donbas conflict zone.

From the outset these conditions seem unfeasible. Shokin and Gontareva are both close associates of Poroshenko, while Western nations are stepping up pressure on Kyiv to approve constitutional amendments that would provide certain self-government rights to Ukraine’s regions, including separatist-held territories in the mainly Russian-speaking East.

In this light, the return of Liashko's party return to the coalition remains illusory.

More likely to happen in Kyiv in the next few months is a reshuffle of the cabinet, while Yatsenyuk will remains at the head of the new line-up. There is no doubt that a number of key officials will retain their jobs, including US-born Finance Minister Natalie Jaresko, who is an indispensable negotiator with Ukraine's international donors.

Meanwhile Yatsenyuk and Poroshenko can lock horns over other key portfolios like the post of the interior minister. Kyiv-based experts believe that Poroshenko and his administration may be willing to replace the incumbent Arsen Avakov after his verbal clash and glass-throwing outburst with Poroshenko's associate, Odesa governor Mikheil Saakashvili.

These differences between the president and prime minister can be theoretically overcome. The real hurdle could be, for instance, a scenario, when Yatsenyuk insists on a national referendum over amendments to the constitution. Ukraine's Western backers will certainly oppose such a move, and this fact could prompt Poroshenko to look for another prime minister.

And that is the point where a collapse of the ruling coalition can race over the horizon and crash into Ukraine's propects for further growth and political stability.