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Analysis & Opinion
07.10.08 A Loose-Loose Situation
By Roland Oliphant

The previous coalition between President Viktor Yushchenko’s Our Ukraine faction and Prime Minister Yulia Tymoshenko’s eponymous bloc broke down at the beginning of September. The Yulia Tymoshenko Bloc joined forces with opposition parties in the Verkhovna Rada, the Ukrainian parliament, to pass measures limiting presidential powers. In response, Our Ukraine quit the government and president Yushchenko gave the Rada thirty days to form a new governing coalition. Monday was the last day.

There seems to be little interest in renewing the awkward alliance that collapsed last month. Both sides claim that they would like to see the alliance revived, but yesterday Yushchenko dismissed the efforts of Tymoshenko’s bloc as “nothing but a political maneuver to maintain its own powers,” the Russia Today television channel reported. He earlier insisted that “existing interparty agreements” should be confirmed, in a clear reference to Yulia Tymoshenko’s Bloc’s collaboration with the rival Party of the Regions. On September 17, they joined forces to pass a new law – in a vote Our Ukraine abstained from - on joint stock companies (JSCs). That sparked speculation that they were about to form a new constitutional majority.

Tymoshenko, however, has stubbornly dismissed the prospect of such an alliance and continues to call for a renewal of the Orange coalition. On Monday, her party issued a memorandum saying that all of its deputies were prepared to return to the coalition in its old format.

Many analysts are skeptical. “The coalition of the two democrats, Tymoshenko and Yushchenko, is hard to sustain because they have a clash of personalities – they dislike each other very much,” said Andriy Gubachov, an analyst for Alfa Bank Ukraine who authored a note on the crisis. Kirill Frolov, an expert on Ukraine at the Moscow-based Institute of the CIS countries, was more laconic. “The coalition in its old format cannot possibly work,” he said.

That animosity is born out by Yushchenko’s intransigence in the face of opinion polls that put his party far behind both the Yulia Tymoshenko Bloc and the Party of the Regions. The president clearly has the least to gain from elections, but he appears to have decided he also has little left to lose. Both he and Tymoshenko have an eye on the presidential elections of 2010. “He wants to be re-elected, but he is in a very weak position. Pre-term parliamentary elections are his only chance to resurrect his popularity,” said Andrew Wilson, a Ukraine expert with the European Council of Foreign Relations. But the risks are high: “His party might not get back into parliament,” Gubachov warned.

With none of the main parties apparently able to come to terms, attention has focused on the minor parties in parliament – the Communist Party, which traditionally aligns itself with the party of the Regions, and the bloc led by Vladimir Litvin, a former chairman of the Rada. Any majority alliance must include either the Party of the Regions or the Yulia Tymoshenko Bloc, who, with 175 and 156 seats respectively, are by far the largest in the 450 seat Rada. But neither of them have enough seats to form a government on their own.

Yesterday, Litvin denied speculation that he would play kingmaker by forming an alliance with Our Ukraine. Apparently, he was unhappy that Yushchenko could not, or would not, promise to reinstate him as the Rada chairman.

Even combined, though, Litvin and the Communists do not have enough seats to make their position decisive. As long as neither of the Orange parties will contemplate a coalition with the Party of the Regions, and will not work with each other, the system is deadlocked. It is possible, though unlikely, that a new force might emerge, perhaps through a split of Our Ukraine. But it is unlikely that any new force could gather the level of support to compete with the “big three.”

Pre-term elections might seem a logical move at this point, but they are only likely to postpone the problem, not solve it. Opinion polls show a minimal shift in levels of support since the last elections on September 29, 2007.

Indeed, while Yushchenko has called new elections a “democratic and constitutional way out of the crisis,” many observers warn that calling the second pre-term elections in little over a year could be worse than useless. It would undermine the idea that the 2007 elections were a one-off, and could discredit the entire system. “In 2007 the constitutional grounds were unclear, to put it generously. But there was a utilitarian argument that the political system could be ‘rebooted,’” said Wilson. “If you keep rebooting a system, it freezes.”

And it would not only cause constitutional problems. “The most disastrous outcome from an economic point of view would be re-elections,” said Gubachov. “The privatization process would be stuck, there would be no sensible fiscal policy, and it would put pressure on inflation and on exchange rates.”

That leads many observers back to what Vladimir Frolov called the “logical” alliance between Yanukovich and Tymoshenko. Gubachov admitted that such a scenario seemed less likely than it had immediately after the law on JSCs was passed in mid September, saying that he would not change his mind about an alliance between the Party of the Regions and the Yulia Tymoshenko Bloc “until Tymoshenko announces restoration of the coalition with Yushchenko.”

An alliance between the two sides would face serious problems over the status of the Russian language and NATO, but would be mercifully free of the personal animosity that has made the Orange coalition unworkable. The hope is that they could find a way to divide powers that would allow the alliance to operate. And it would have the added benefit of improving relations with Russia. Tymoshenko was once considered as anti-Russian as Yushchenko, and just last year published an article in Foreign Policy Magazine called “Containing Russia” that roused the ire of Russian politicians. Recently, though, she has tried to reposition herself, and had a meeting with Russian Prime Minister Vladimir Putin that has widely been seen as productive, if not positively friendly. “She hasn’t become a Russophile overnight, but she is clearly trying to bridge that gap,” said Wilson.

A Tymoshenko-Yanukovich tandem would also put Ukraine in a better position to negotiate natural gas prices and resolve trade disputes with Russia. “At the moment there are bans on Ukrainian exports of cheese, dried milk products and other foods, and talk of Russia ceasing to buy power turbines from Ukrainian firms. Those issues would go away, sooner or later,” Wilson said.

We will not know how the crisis will be resolved until Yulia Tymoshenko announces who she will be allying with, or Viktor Yushchenko calls the third parliamentary election. None of the solutions are ideal: it is largely a matter of choosing the “least bad option,” said Wilson. The danger is that political considerations prevent the parties from doing so.
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