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February 7, 2006

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Reference ID Created Released Classification Origin
06KIEV520 2006-02-07 15:36 2011-08-30 01:44 CONFIDENTIAL Embassy Kyiv
This record is a partial extract of the original cable. The full text of the original cable is not available.


C O N F I D E N T I A L SECTION 01 OF 03 KIEV 000520 


E.O. 12958: DECL: 02/07/2016 

Classified By: Ambassador for reasons 1.4(a,b,d). 

1. (C) Summary:  A majority in the new Rada elected by the 
March 26 parliamentary elections will select a new Prime 
Minister, who will take the lead on forming a new Cabinet 
(with the exception of Defense and Foreign Ministers).  Poll 
results have for months consistently suggested that at least 
three parties or political blocs that make it past the 
three-percent threshold will need to coalesce to form the 
constitutionally-required Rada majority.  Various 
permutations are among the quite possible, but the leading 
likelihood is for a pro-reform re-alliance of the Orange 
Yushchenko-Tymoshenko-Socialist team to form.  Such an 
outcome would bode best for Ukraine's pace of Euro-Atlantic 
integration, though it would potentially revisit clashing 
economic philosophies on display in 2005.  That likelihood 
does not lead by much, however, and is far from guaranteed 
given the still bad blood between the erstwhile Orange 
Revolutionary comrades Yushchenko and Tymoshenko.  Yushchenko 
could find it easier, even if distasteful, to join 
parliamentary forces with ex-PM and Party of Regions leader 
Viktor Yanukovych, the candidate of the archenemy camp in the 
2004 presidential elections.  A deal with Regions would bring 
in a government with which we could work, but which might 
slow-track some Euro-Atlantic vectors. 

2. (C) A less likely Tymoshenko-Yanukovych accommodation 
would likely derail NATO aspirations, at least temporarily, 
while an even less likely Yanukovych-led majority with no 
Orange tint whatsoever would be a train wreck for Ukraine's 
Euro-Atlantic goals.  A final possible result to contemplate 
would be stalemated negotiations and new elections, but that 
would depend on a significant number of forces in the new 
Rada seeing benefit from going through another election 
process within two months.  For our part, the U.S. should 
continue to support democratic elections, to promote 
reconciliation and cooperation among pro-reform elements, and 
to push Euro-Atlantic integration of this pivotal country. 
We shall have to await the election results and post-election 
bargaining, however, before we will be able to judge 
near-to-medium-term prospects for progress.  End summary. 

Constitutional reform requires Rada majority 

3. (C) Under constitutional reforms that came into effect 
January 1, the Rada (parliament) elected March 26 will be 
empowered to form a majority that will in turn take the lead 
on selecting a Prime Minister (who will take the lead on 
naming his/her Cabinet, with the exception of Defense and 
Foreign Ministers, who will continue to be nominated by the 
President).  If most reputable current polling numbers remain 
stable, it is highly likely that two of the top three parties 
in the race will need to work together to form the new Rada 
majority.  The opposition Party of Regions led by Orange 
Revolution loser and last Kuchma-era PM Viktor Yanukovych has 
in the last several months been polling on average in the 
range of 25-30 percent.  President Yushchenko's People's 
Union Our Ukraine (PUOU) lately has risen to around 20 
percent.  Support for ex-Orange PM Yuliya Tymoshenko's bloc 
(BYuT) has been struggling in recent weeks to stay at 15 
percent.  Of the other parties likely to make it over the 
3-percent threshold into parliament (Socialists, Communists, 
Speaker Lytvyn), none appears likely to attract anywhere 
close to 10 percent.  A few other parties have a slim chance 
to break 3 percent (ex-President Leonid Kravchuk's Ne Tak 
bloc, radical Socialist Natalya Vitrenko's People's 
Opposition bloc, and pro-democracy Pora-Reforms and Order 
bloc), while a couple dozen others are even worse-positioned 
to enter the 450-seat Rada. 

Yushchenko in driver's seat... 

4. (C) Given the personal and political dynamics involved, as 
well as the still considerable power of the Presidency, 
Yushchenko's PUOU is most likely one of the parties that 
would be involved in a majority coalition-making deal.  Of 
the three party leaders, Yushchenko is less of an anathema 
than Yanukovych and Tymoshenko in this three-way dynamic. 
The mutual distrust between Tymoshenko and Yanukovych is 
probably more of an obstacle than the negative feelings 
either of them harbors toward Yushchenko.  The relative 
attractiveness of the parties in any coalition will depend on 
how they do at the polls.  Nonetheless, whether any of the 
three will be able to come to an understanding with one or 
the other will depend on their ability to put practical 
politics over personal sentiments. 

...but not by himself 

5. (C) It is important to note that, unless the numbers of 
these three groups improve at the polls in March, any two 
would still need to join with a third or fourth bloc to 
achieve a majority.  Moroz's Socialists and or Speaker 
Lytvyn's bloc are the most likely to be brought into a 
majority coalition, both because of their relative strength 
at the polls and because of their relatively acceptable 
ideologies.  These parties' potential king-making role could 
give them considerable influence in coalition talks. 

Have we got a deal for you! 

6. (C) A Yushchenko-Tymoshenko deal, despite the still &#x
000A;strongly felt falling-out, remains a real possibility.  Such 
a force would likely result in the greatest continuity in GOU 
policies, both domestic and foreign.  A Western-leaning, 
Euro-Atlantic integrationist approach would continue. 
Economic policies would also likely remain pro-reform, but an 
important question would be the extent to which Tymoshenko 
learned from the mistakes of her less-than-market-based 
approaches she adopted during her stint as PM.  Perhaps a 
positive indication is that in her last weeks as PM she had 
begun talking the talk of a more market-based approach to 
resolving problems. 

7. (C) The question of which party gets the Premiership and 
the predominant influence over policies will to a great 
extent be determined by the March vote results.  The better 
the showing of PUOU vis-a-vis BYuT, the more favorable an 
environment for policy decisions we would like to see.  For 
instance, if PUOU were to take the Prime Ministry, the next 
GOU would be less likely to pursue questionable policies such 
as reprivatization. 

Stranger things have happened... 

8. (C) Perhaps the second most likely Rada coalition would 
involve PUOU and Regions.  If Yushchenko and Tymoshenko prove 
unable to overcome their differences (perhaps because of a 
Tymoshenko insistence on becoming PM), the strange bedfellows 
combination of 2004's archenemies could be the result.  There 
is a precedent:  the two signed a September 22, 2005 MOU that 
led to the approval of PM Yekhanurov and lent renewed 
legitimacy to Yanukovych and Regions after the elections 
travesty of 2004.  The March 2006 vote results, once again, 
would be key in determining the two forces' relative 
strengths.  Were Regions to lead PUOU in the polls by 8% or 
more, it may feel little reason to compromise on a candidate 
for the PMship.  Despite the pro-Russia stance of Yanukovych, 
however, we would likely see a continued, albeit slower, 
movement toward the West.  Just as then-President Kuchma 
found it in Ukraine's interest to have a "multi-vectored" 
foreign policy, a GOU led by a strong Party of Regions 
element would likely find it useful to maintain as much 
leverage as possible against the influence of its 
northeastern neighbor.  Macroeconomic policies would likely 
remain acceptable.  The danger of a return to power of forces 
keen on robbing the state on behalf of their and their 
cronies' personal interests would have to be closely watched. 

...but not stranger than this 

9. (C) The least likely pairing among this threesome would be 
Tymoshenko and Yanukovych.  Overcoming mutual distrust and 
personal distaste would be very difficult.  However, were 
both unable to reach a deal with Yushchenko and company, they 
would be left to consider their mutual interests in regaining 
influence over the government (whatever their conflicting 
motivations).  Such an outcome would be worst for U.S. 
interests, as the Yushchenko team's pro-reform, pro-West 
policies would be seriously derailed.  Even if macroeconomic 
policies did not suffer too much, the prospects of 
market-oriented reform could be dimmer.  Moreover, 
significantly increased corruption would seriously affect 
their impact.  NATO membership would lose even lip service 
support, while EU membership might remain a stated goal, but 
would be less vigorously pursued. 

The anti-Orange possibility 

10. (C) Two other possibilities are worth mentioning.  If 
some opinion polls are to be believed, there is a potential 
majority coalition that would involve Regions, but neither 
Yushchenko nor Tymoshenko's blocs.  While unlikely, the March 
vote could result in a majority of Rada seats going to 
Regions, Speaker Lytvyn's bloc, ex-President Kravchuk's Ne 
Tak coalition, and radical Socialist Vitrenko's group.  While 
such a coalition would require bringing together a diverse 
group, all but the last of these forces are driven more by a 
hunger for power (and spoils) rather than ideology.  The 
attraction of an unspoiled anti-Orange coalition might drive 
the groups together.  And if Vitrenko and company do not make 
it into the Rada, the more ideological Communists could 
conceivably be convinced to join forces.  Foreign policy 
directions would turn even more toward Moscow.  Even the 
specter of a reversal of some civil society gains would 
threaten, although most observers think that the civic 
freedoms cat cannot be rebagged. 

Doing it all over again? 

11. (C) Finally, it is conceivable that the forces that make 
it into the Rada in the March elections will not be able to 
make the compromises necessary to form a majority. 
Constitutionally, they have 30 days after taking their seats 
to form a majority and 60 days after the divestiture of 
powers of the Cabinet to appoint a new Cabinet.  If they fail 
to do so, the President, after consultations with the Rada 
and Rada faction leadership, may dismiss the Rada, and new 
elections are held within 60 days.  Presumably, for this to 
happen, significant forces would have to calculate that they 
could do better in new elections. 

U.S. approach should remain as is; we can calibrate later 
--------------------------------------------- ------------ 

12. (C) Our approach should be to continue to support 
democratic elections in March.  With the unlikely exception 
of a majority coalition that excluded both Yushchenko's and 
Tymoshenko's forces, the USG should be able to work with the 
government put together by the majority that eventually 
emerges.  A Yushchenko-Tymoshenko alliance still would bode 
best for reform prospects, and so we should continue to 
encourage these pro-reform elements to work together. 
Whatever government results, we will be seeking to promote 
Euro-Atlantic integration of Ukraine.  The March elections 
will determine in the near-to-medium term the overall pace of 
Ukraine's own progress, but, as we have seen over the past 
year with a purely Orange government in place, progress is 
unlikely to be simple, swift, smooth and steady no matter 
what the results. 

123. (U) Visit Kiev's classified website: 





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