Ukraine heads for crucial presidential election

By bne IntelliNews May 23, 2014

bne -


Ukraine goes to the polls on May 25 in a crucial presidential vote that is planned to end the political vacuum and help reduce the instability that has plagued the country since former president Viktor Yanukovych fled the country in February.

There is little doubt about who will be the next president in Kyiv: oligarch Petro Poroshenko holds an enormous lead. The only unknown in terms of results is whether Poroshenko will win in the first round by taking more than 50% of the vote. Should he fail, a second round will take place on June 15.

However, the real question is whether the elections will win widespread recognition. With no pro-Russian candidate standing a chance, Moscow has been destabilizing the eastern and southern regions of the country specifically to undermine the legitimacy of the vote. 

Kyiv has been pushing to quell the pro-Russian militias that have taken control of several cities in the Donetsk and Lugansk regions. Moscow gave cautious backing to referenda held on May 11 that called for independence in the eastern regions, but has held back on requests for it to annex them, as it did Crimea in March.

However, with reports of numerous murky private forces emerging on both sides, the conflict has stepped up as the vote draws closer. May 22 saw the biggest loss of life for the Ukrainian army as an ambush in Donetsk left at least 14 of its soldiers dead. Anti-Kyiv forces have reportedly occupied up to 13 of the 34 electoral commissions in the eastern Donbas region, but the elections will nonetheless be valid according to Ukrainian law, even should some regions fail to take part.

The Kremlin's goal is to prevent Ukraine moving closer to the EU, and possibly Nato. If Russia ties Ukraine into a "frozen conflict", then that could effectively stymie accession ambitions in Kyiv and Western Ukraine to eventually join the European bloc. 

Poroshenko was a strong supporter of the Euromaidan revolution that deposed Yanukovych, and has built up his credentials to move Ukraine to the West on the campaign trail. At the same time, the chocolate magnate is a political butterfly - he served in the pro-Western government of Viktor Yushchenko as well as Yanukovych's more eastern-oriented administration. He has stressed that mending ties with Russia quickly is vital. 

Need for speed

A swift and conclusive election is needed first however, so Kyiv can attempt to diffuse the trouble in the east. Poroshenko has called on outlying candidates among the 22 entering to pull out of the race so that a new president can restore order as soon as possible.

"The logic of those who increasingly support Poroshenko is that he will win in any case... so why should we wait three more weeks to vote in the second round and put Ukraine under new risk?" suggests Alexander Paraschiy at Concorde Capital. "A three-week delay... is considered as an additional risk for the country by many, including the risk of more aggression from the Russian side."

Washington and Brussels have been pushing the presidential vote hard as the only route to solving the crisis. For its part, Moscow is keeping Kyiv and the West guessing. 

Russian President Vladimir Putin has recently performed an about-face, and cautiously endorsed the vote, describing it as a "step in the right direction". The Russian forces that had amassed so ominously on the border since the start of the year have also begun a partial withdrawal. Putin claimed the order was designed to help the vote go off smoothly.

Yet conflicting signals are emerging from Moscow. While Putin hinted this week that Russia "may" recognise the results as valid, Prime Minister Dmitry Medvedev said it might not.

"Although Russia doesn't seem keen about the elections, it is appearing to 'accept' them and clearly much will depend on the new president's skill to find a longer-lasting solution that keeps the country functioning as a state with the support of the EU/US and Russia," write analysts at Commerzbank. "Poroshenko seems to be the candidate with the path of least resistance."

The first item on the agenda for the new president is likely to be natural gas. Moscow is threatening to cut off Ukraine unless it is paid the $3bn or so it is owed. That risks an interruption of supplies to the EU. However, with the West providing a large rescue package to Kyiv, the only thing missing it seems is a Ukrainian figure with whom Moscow will agree to talk.

Related Articles

Austria's Erste rides CEE recovery to swing to profit in Jan-Sep

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

EU, US partly suspend Belarus sanctions for four months

bne IntelliNews - The Council of the European Union (EU) has suspended for four months the asset ... more

bne:Chart - CEE/CIS countries perform particularly well in World Bank's "Doing Business 2016" survey

Henry Kirby in London - Central and Eastern Europe and the Commonwealth of Independent States’ (CEE/CIS) countries performed particularly well in the World ... more