Ukraine's revolution continues apace with interim president named

By bne IntelliNews February 24, 2014

Harriet Salem and Graham Stack in Kyiv -

Ukraine's revolution is moving apace, with parliament naming its speaker Oleksandr Turchynov as acting president, following on key appointments with oversight of the interior ministry and other state security organisations, while the formerly governing Party of Regions is crumbling and in disarray. Worryingly, the US felt moved to warn Russia against sending in its forces as Moscow recalled its ambassador and vented fury at how the Ukrainian opposition was breaking a peace deal in order to seize power.

Ukraine's unicameral parliament, the Verkhovna Rada, voted on February 23 to name its freshly minted speaker Oleksandr Turchynov as interim president, until presidential elections are held May 25. Turchynov himself had only become speaker on February 21 after a parliamentary vote. The parliament then voted February 22 to impeach President Viktor Yanukovych after he fled the capital to an unknown destination.

The 49-year-old Turchynov then addressed the Ukrainian people, recapping for the population the revolution that had taken place over the previous two days: "The Verkhovna Rada has taken on itself the full responsibility for the situation in the country, removed Yanukovych from his position with a constitutional majority and scheduled pre-term presidential elections for May 25, 2014," Turchynov said. "Parliament, with a constitutional majority, has restored the 2004 constitution that was illegally cancelled by Yanukovych in 2010."

Parliament also named a member of former prime minister Yulia Tymoshenko's Batkyvschina party, Arsen Avakov, as acting interior minister, and authorised Serhiy Nalivaichenko from Vitaly Klitchko's UDAR party to supervise the security services of Ukraine, or SBU, and Oleh Makhnytsky, from the nationalist Svoboda party, to supervise the work of the general prosecutor's office. Interim President Turchynov himself is a member of Tymoshenko's Batkvyschina party, and one of her closest associates.

The cross-party appointments indicate the alliance between the liberal parties of UDAR and Batkvyschina and the nationalist Svoboda party is holding up. "What has been incredibly encouraging, is the way that the unity of the three main opposition leaders - Klichko (UDAR), Yatseniuk (Batkyvschina) and Tiahnibok (Svoboda) - held together through the crisis, and particularly in recent days," says Standard Bank analyst Tim Ash in a note. "They appear to have agreed that Turchynov will assume a temporary leadership role in the run up to elections - perhaps a reflection of his own experience heading the SBU under Yulia Tymoshenko."

Nalivaichenko and Avakov in their acceptance speeches pointed to the danger of a power vacuum emerging in Ukraine, justifying the swift action to fill posts. Nalivaichenko said that all regional heads of the SBU in central and east Ukraine had abandoned their posts, leaving strategic objects such as nuclear power stations unguarded.

Economy in ruins

Turchynov named the new administration's first priority to stem the civil conflict, restore control, return troops to their barracks and stamp out any separatist tendencies. The second priority he named was the economy: "What Yanukovych and (former prime minister) Azarov have left behind is difficult to call even a ruin... Ukraine is sliding into the abyss and is in a pre-default state."

"The fear surely is that the regime could have plundered the official accounts, perhaps with the intention of running a parallel administration out of Eastern Ukraine," notes Standard Bank's Tim Ash. "We would perhaps also express some caution herein over the health of the banking sector, for similar reasons - many former regime friendly banks may now be shells, with significant holes in their balance sheets."

As third priority, Turchynov named returning to the course of EU integration as the main foreign policy trajectory. "We should return to the family of European countries," he said, reminding that the Euromaidan protest movement had started with the failure by Yanukovych to sign an association agreement with EU in late November. He also said Ukraine's new leaders wanted relations with Russia on a "new, equal and good-neighbourly footing that recognizes and takes into account Ukraine's European choice."

What Russia intends to do as its Ukraine policy of keeping the pro-Russian Yanukovych in power unravels remains a big unknown. Russia said late on February 23 it had recalled to Moscow its Ukraine ambassador for consultations on the "deteriorating situation" there. One of the first acts of parliament post-Yanukovych was to downgrade the status of the Russian language.

The White House felt moved to warn Russia to keep its troops out of Ukraine, amid fears that Moscow may step in with military force

The coming week's political biggie is the vote on who will become prime minister - a position with beefed-up powers due to the switch on February 21 to a semi-parliamentary government. Former prime minister Yulia Tymoshenko, sensationally released after two and a half years in jail on February 22 and straight back to the political front line with a speech to protestors on the Maidan square, said February 23 that she would not seek the post of prime minister.

This leaves two frontrunners - Petro Poroschenko, an independent MP, and Arseny Yatsenyuk, head of the Batkyvschina parliamentary group. Poroschenko, historically a bitter foe of Yulia Tymoshenko, has seen his popularity soar due to active participation in the Euromaidan protest movement, and might seek to use the post of prime minister to launch a bid for the presidency in May - a prospect unlikely to please Tymoshenko, likewise angling for the presidency. Yatseniuk on the other hand is unlikely to run for president against his party boss, Tymoshenko, and could count on staying prime minister if she is elected.

Geographical tensions

Tensions continue to simmer in the south and east of the country. "Looking forward, we think that focus will change from Kyiv to Eastern Ukraine," says Jens Nærvig Pedersen of Danske Bank. "Uncertainty about the future political situation in Ukraine remains extremely high."

It is, however, unclear how much support Yanukovych still has in Eastern Ukraine. The evidence of the corrupt authorities' extravagant lifestyles has only fuelled the already rampant public anger against the authorities in the country. Yanukovych's residence, the Mezhyhirya compound, is perhaps the most well known example. The grandiose dwelling with a 9-hole golf course, pet peacocks, Turkish baths and a faux galleon, is now open to the general public, who appear appalled at the extravagance.

However, photos of the inside the house of Viktor Pshonka, the former Prosecutor General, shows the overt display of opulence was not limited to the president. A bizarre new age hat tip to the romantic era, the garish décor includes a mantle clock with a leopard pawing across the top, a kitsch gold TV stand, and a outlandish collection of portraits of Pshonka, including one of the former prosecutor general dressed as Caesar. An arrest warrant has now been issued to arrest Pshonka, and the ousted tax minister, Oleksander Klimenko, for "grave crimes against the Ukrainian people," parliament were told on February 23.

Opposition to the new power in Ukraine is strongest in the Crimea. On February 23, a pro-Russia demonstration in Sevastpol attracted crowds of at least 30,000. Protesters burned the Ukrainian flag and denounced the Euromaidan protesters and opposition leaders.

Meanwhile, the hunt for Yanukovych continues. The dispossessed president reportedly fled to Kharkiv on the evening of February 21. On February 22, as Euromaidan protesters secured his residence in Kyiv, he gave a bizarre television interview from an unknown location, calling his overthrow the work of "vandalism, banditry, and a coup d'etat," before dropping of the radar again entirely.

According to a Facebook post late last night from MP Vladimir Kurennoi, Yanukovych had been arrested in the Crimea. Other sources nodded to a private luxury yacht Yanukovych is believed to own, and which he may use to escape in. Rumoured destinations for the fleeing president have included everywhere from London to Moscow and Abu Dhabi. Bizarrely, his wife, who rarely makes public appearances, was snapped strolling the shopping aisles of a Donetsk supermarket just a day ago.

The truth is that nobody really knows and with events moving so swiftly, it's hard to sift fact from fiction.

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