Yushchenko-Tymoshenko parties declare victory in Ukraine vote

By bne IntelliNews October 1, 2007

Roman Olearchyk in Kyiv -

Ukraine's fiery opposition leader Yulia Tymoshenko and the party of pro-Western President Viktor Yushchenko declared victory late Sunday, September 30 after exit polls showed them with a narrow lead in the crucial parliamentary elections. Both parties appeared to have just enough to oust the governing coalition of Prime Minister Viktor Yanukovich, but with only half of the official votes counted as of early Monday and the margin of error in the exit polls ranging from 1-4%, the possibility is still open for a change.

"This is without a doubt a victory," said Tymoshenko, a charismatic leader who played a big role in rallying support for Yushchenko's 2004 presidential bid and who is now poised to return as prime minister. She was fired by Yushchenko as premier after a brief stint in 2005 after a bitter falling out with the president. But now both these Orange Revolution heroes claim to be reunited against Yanukovich's coalition, which they have accused of derailing Western integration, stalling reforms and conducting corrupt privatisation tenders.

However, at a press briefing PM Yanukovych appeared confident that when the final vote was counted, his party could end with the lead or succeed in forming a coalition through negotiations. "By winning this election, we now have the right to form the next government and I invite all qualified parties to participate in the negotiations to form the coalition," Yanukovych said.

Exit polls also raised the possibility that a dark horse party, the bloc of former speaker Volodymyr Lytvyn, could muster enough voter support to act as kingmaker between both groups, though exit polls suggest that Lytvyn's bloc appeared just short of such a position. Political analyst Vadym Karasiov says that Lytvyn's bloc would push for a broad coalition with Yushchenko's and Yanukovych's party.

Ms Gas is back

The exit polls showed Tymoshenko's bloc with a surprisingly strong second place finish. Her bloc garnered more than 30% of votes cast, just behind Yanukovych's Regions party with 35% and double the 14% received by Yushchenko's Our Ukraine-People's Self-Defence bloc. The results show Tymoshenko's bloc, support for which has steadily risen since 2002, as the only party with significant gains.

If the exit polls are right, Tymoshenko will return to form a coalition government with the president's party. The duo would hold a hairline majority in parliament. The strong result is a double-edged sword for Yushchenko, as Tymoshenko is expected to challenge him for the presidency in a campaign that kicks off in 2009.

Both parties support Yushchenko's speedy Western integration agenda and campaigned hard against Yanukovych's coalition, which they have accused of being corrupt, stalling reforms and pandering to Russia. Relations with Moscow that turned sour after the Orange Revolution have recovered somewhat under the premiership of Yanukovich, but could be ruined again under Tymoshenko, who has pledged to clean up what she has described as the "shadowy" natural gas trade between both countries and Turkmenistan.

The initial market reaction to Tymoshenko's likely return was mixed. "In the short term, markets might be concerned by this outcome as they may fear a return to the trade wars with Russia which marked Tymoshenko's last stint as prime minister in 2005," says Tim Ash, an emerging market debt analyst at the London offices of Bear Stearns. "However, we would expect both Tymoshenko and Russia to be much more pragmatic second time around.

"We still would not rule of the possibility of Tymoshenko being kept out of office by a back-room deal" between Yushchenko and Yanukovych, Ash adds.

Yushchenko dissolved parliament this spring to end what he described as political corruption and attempts to usurp power by the coalition of Yanukovych. The president and his nemesis from the Orange Revolution of 2004 have since been involved in a year-long wrestling match for authority. The president hopes that these snap elections could help end the longstanding political paralysis, but analysts predict the country's politics will in coming years remain complicated and dominated by the same ambitious politicians.

Fears have spread in recent days that the massive vote rigging seen in the presidential contest in 2004 could resurface in this vote, but preliminary findings by more than 3,000 observers ruled out widespread violations. Political analysts also warned that election results could be challenged by lawsuits, but massive street side protests as seen during the Orange Revolution are not expected.

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Yushchenko-Tymoshenko parties declare victory in Ukraine vote

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