Splits in Ukraine's pro-EU camp emerge over Poroshenko plan for East Ukraine

By bne IntelliNews September 16, 2014

Graham Stack in Kyiv -


Ukrainian President Petro Poroshenko has circulated a draft version of a controversial bill seen by bne that gives special status to districts of East Ukraine held by Russian-backed rebels, which some fear could see the region turned into a Transnistria-style frozen conflict.

Giving the rebel-held areas of East Ukraine – which include the major cities of Luhansk and Donetsk and have a total population of around 2m – political and economic special status was one of Kyiv commitments in a peace accord signed in Minsk on September 5 by representatives of Kyiv, Moscow, the OSCE and the rebel structures in Luhansk and Donetsk.

The bill on "temporary order of local self-government in certain districts of Donetsk and Luhansk regions" proposes introducing for a period of three years a "special form of government" in the rebel-held districts, holding early local elections under the new law on November 9, allowing for a local police force and amnestying rebels not accused of serious crimes.

According to the bill as seen in its entirety by bne, "temporarily, for three years..., a special order of local government is introduced in some districts of Donetsk and Luhansk regions, which include the districts, towns and villages located as of the date of entry into force of this law within the area of the anti-terrorist operation."

The components of this special order comprise: a full amnesty for those involved in “the [otherwise unspecified] events that took place in Donetsk and Luhansk region;” freedom to use Russian in public and private life and education; local elections to be held November 9; participation of the thus elected local authorities in appointment of prosecutors and judges; oversight of the elected officials in forming a local “volunteer” police force.

Controversially, given Ukraine's cash-strapped budget and fears of pending default, the draft bill envisages Kyiv providing direct budget support for the rebel-held districts: "State support lies in introducing a special economic regime of economic and investment activities aimed at the restoration of industrial facilities, transport and social infrastructure, housing, reorientation of industrial potential, the creation of new jobs, and the attraction of investment and loans for the reconstruction and development of facilities located in some areas," reads the draft, as quoted by Interfax.

The level of financial support will be fixed in the annual budget at a level that cannot be subsequently reduced. "Ukraine guarantees the definition of such expenditures of the general fund of the state budget with protected expenditures, the volume of which cannot be changed during the reduction of the approved budget allocations," reads the provision of the proposed law, as quoted by Interfax.

The degree of autonomy for the rebel-held regions envisaged by the bill is unclear due to wooly phrasing. The bill allows for the government and other executive bodies to sign agreements with the “relevant local authorities” regarding the “economic, social and cultural development of the individual regions.” The rebel-held regions are also to be free to develop “good neighbourly relations” with Russia regions on the basis of cross-border cooperation.

Legions of critics

Criticism of the proposed law was not slow in coming, and not just from nationalists but from mainstream pro-EU liberals, one of Poroshenko's core constituencies. Prominent pro-EU Donetsk journalist Serhiy Garmash published on Facebook an appeal to the president from the “Committee of patriotic forces in Donbas." It read: “Poroshenko's law on the 'special status' could be called a “law on capitulation” or “law on assistance from the president of Ukraine to the terrorist organisations of Donetsk People's Republic and Luhansk Peope's Republic."

Nashi Groshi, a Soros Foundation-backed project that scrutinises state budget expenditure for signs of corruption, gave the following damning appraisal of the proposed law: “It is being proposed that Ukrainians fund a banquet for the Donbas terrorists from out of the budget for three years. This means the legalisation of armed terrorist groups, surrender of occupied territories under their control, destruction of the border between the 'terrorist reservation' and Russia, and all of this festival to be paid for out of the Ukrainian state budget.”

Poroshenko defended the draft bill in comments to leaders of parliamentary factions and groups September 15, saying that measures in the draft bill are nothing more than "de-facto elements of decentralization” which ensured the “complete and unconditional observance of the state's sovereignty, territorial integrity and independence,” with the “guaranteed maintenance of all of the basic attributes, including the foreign, security and legal policy," as quoted by Interfax. Poroshenko also told parliamentarians that the time limit of three years would "suffice to implement deep decentralization which must be put through a process of corresponding constitutional amendments."

Prime minister Arseny Yatsenyuk - a political ally of Poroshenko's, but a competitor in upcoming parliamentary elections in October - speaking on television on September 16 sounded lukewarm on the plan, calling it a "bad scenario" instead of a "very bad scenario." Arguing that Russian President Vladimir Putin intended to seize the whole of Ukraine "one way or another," Yatsenyuk asked: "is there any hope that with the help of some or other concessions and the passing of a law the Russian president will refrain from his plans?"

According to respected liberal paper Zerkalo Nedeli, quoting a source in the presidential adminstration, populist pro-EU party Batkvyschyna, headed by former prime minister Yulia Tymoshenko, currently the largest single party in parliament, will oppose the law, as will the nationalist party Svoboda.

According to Zerkalo Nedeli, to get the law passed Poroshenko will have to rely on MPs formerly belonging to the Party of Regions and Communist Party of Ukraine parliamentary groups – ie. the former pro-Russian governing coalition ousted by mass protests in February. Mayor of Kyiv Vitaly Klichko's UDAR party is also likely to support the law, as are independent MPs in Poroshenko's own "orbit." Poroshenko currently does not have his own force in parliament. Together these groups would total 230 votes in parliament, sufficient to see the law passed.

The fact that Poroshenko may have to rely on the former pro-Russian parliamentary majority, the bulwark of his ousted predecessor Viktor Yanukovych's power, will only increase the controversy surrounding it. Mustafa Naiem, the journalist who initiated the Euromaidan protests in late November 2013, and who is now running for parliament on the electoral list of Bloc Petro Poroshenko, wrote on Facebook that, "this is a direct path not only to confrontation in parliament, but also to open accusations that Petro Poroshenko is conspiring with the Party of Regions and Communists."

According to Zerkalo Nedeli, prior to debating the bill, the leadership of what Ukraine calls its “anti-terrorist operation” will address parliament in a closed session, in the presence of the president, on the current situation in the areas of East Ukraine held or disputed by rebels.

A separate question is whether the law will be acceptable to the rebels themselves or to the Kremlin. Rebel representatives have in recent days maintained that no law passed in Kyiv will have any relationship to them, and they seem certain to dislike the failure to recognize overarching Donetsk and Luhansk regional structures above the level of local government, say experts. The time limit of three years for the East Ukrainian autonomy as envisaged in the draft bill also appears at odds with Kremlin demands for permanent special status.  "They [the proposals] appear to stop short of the federal solution which Moscow has pushed for and would not give Ukraine's regions a veto power on Ukraine's geopolitical orientation and choices," Standard Bank's Tim Ash writes in a research note. "I doubt hence that they will be... acceptable to Moscow or its rebels in Ukraine.



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