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June 15, 2006

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Reference ID Created Released Classification Origin
06KIEV2331 2006-06-15 15:55 2011-08-30 01:44 CONFIDENTIAL Embassy Kyiv
DE RUEHKV #2331/01 1661555
P 151555Z JUN 06


C O N F I D E N T I A L SECTION 01 OF 03 KIEV 002331 



E.O. 12958: DECL: 06/05/2016 

REF: A. KIEV 2316 
     B. KIEV 2281 
     C. KIEV 2279 
     D. KIEV 2190 
     E. KIEV 2296 

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

1. (C) SUMMARY:  Our Ukraine (OU) negotiator Roman Zvarych 
updated DCM June 14 regarding ongoing OU-Party of Regions 
talks on forming a Rada (parliament) majority coalition, 
trying to put a positive spin on OU's possible about-face. 
An Orange-Blue coalition could be in place by June 20, since 
differences were relatively narrow and Regions wanted to move 
quickly.  Zvarych blamed Yuliya Tymoshenko's difficult 
personality for the breakdown in "Orange" coalition talks and 
generally characterized Socialist Party leader Oleksandr 
Moroz' offer as too little, too late.  In discussion with 
Regions, OU was insisting on filling the PM position and 
Regions in turn would get the Rada speakership.  Zvarych 
argued a coalition with Regions would allow Ukraine to both 
strengthen its relations with Russia and move toward NATO. 
Regions had agreed to a NATO Membership Action Plan (MAP) by 
September and would sign a private protocol confirming its 
agreement.  OU also made clear to Regions that it would 
"close its doors" to Regions, if the party pursued a special 
investigation into the U.S.-Ukraine "Sea Breeze" exercise in 
Crimea.  (Note:  The Communist Party tabled a motion to add 
the item to the Rada agenda with Regions support during the 
June 15 session, but it failed to pass.  See septel.)  If an 
Orange-Blue coalition were formed, OU would minimize the 
negative political fall-out by quickly delivering on economic 
issues that impacted voters day-to-day lives.  Regions would 
also support OU legislation on administrative reform, 
anti-corruption efforts, the end to a moratorium on 
agricultural land sales, and WTO accession, with one 
reservation.  Perhaps illustrative of OU's uncertainty over 
which direction to go in coalition negotiations, OU lead 
negotiator Roman Bezsmertniy sent the Embassy a message in 
the late afternoon of June 15 that OU was "equidistant" from 
Tymoshenko and Regions and asked for the USG's input.  End 

Orange-Blue by June 20? 

2. (C) DCM discussed ongoing talks on forming a Rada 
(parliament) majority coalition between Our Ukraine (OU) and 
Party of Regions with Our-Ukraine negotiator Roman Zvarych 
June 14.  Zvarych was careful to characterize the talks as 
"consultations" and not negotiations, though he thought 
differences could be worked out quickly, possibly leading to 
the announcement of an "Orange-Blue" coalition by June 20. 
OU would not make a final decision on a coalition with 
Regions without President Viktor Yushchenko's final approval 
("a clear position"), but noted that today's consultations 
were started only after Yushchenko gave a "clear signal" that 
he wanted OU to move toward Regions.  In the consultations, 
Regions side was represented by MP Mykola Azarov, and wanted 
to move forward quickly.  Zvarych noted OU was "taken aback" 
by Regions desire to move quickly, and was unable to respond 
as quickly in coalition talks. 

Whither Tymoshenko? 

3. (C) Zvarych said OU could not see any reason to join an 
Orange Coalition if Tymoshenko were PM.  Tymoshenko had 
"fascist tendencies," which became clear to him when she 
tried to gain his support for a bill she drafted enforcing 
the "imperative mandate," allowing parties to exclude members 
who did not follow the party line.  Later in the 
conversation, Zvarych noted that Tymoshenko was not the woman 
she had been a year ago when she was PM, and expressed 
concern for Ukraine's democratic foundations if she became 
PM.  He warned that people did not realize how dangerous 
Tymoshenko was, and averred that OU's primary reason for not 
forming an Orange Coalition with Yuliya Tymoshenko's Bloc 
(BYuT) and the Socialists was to keep Tymoshenko from 
becoming PM.  OU's opposition to Tymoshenko as PM began to 
harden two weeks ago when she began demanding numerous 
changes to the coalition agreement.  Zvarych, noting that he 
was no psychologist, said he thought Tymoshenko had mental 
problems because she would scream at people during the 
coalition negotiations. 

Moroz's offer falls flat 

4. (C) Zvarych said Socialist chief Oleksandr Moroz's offer 

KIEV 00002331  002 OF 003 

to drop his bid for the Rada speakership if government 
positions were filled according to election results was "more 
unacceptable than having Moroz as speaker."  Sounding like 
his old feisty self, Zvarych said he asked Tymoshenko if she 
would give up the PM job if Yushchenko joined BYuT.   (Note: 
Since Tymoshenko was insisting that the Presidency, PM, and 
Speaker positions b
e divided evenly between OU, BYuT and the 
Socialists, if Yushchenko were a BYuT member, OU would have a 
claim on the Prime Minister position and presumably the 
Socialist could have the Rada speakership.)  It would be 
perfectly logical, per Zvarych, for her to give up the 
PM-ship in this situation.  According to Zvarych, Tymoshenko 
refused to do so. 

Distribution of jobs in Orange-Blue 

5. (C) Zvarych reported that only a "preliminary discussion" 
had been held June 14 with Regions on job distribution in a 
potential coalition.  OU would not vote for a coalition with 
Regions unless OU got the PM job; Regions would get the 
position of Rada speaker.  Zvarych thought either Regions 
head Viktor Yanukovych or Regions MP Raisa Bohatyrova would 
get the speakership.  PM Yuriy Yekhanurov would "possibly" be 
PM, though when pressed Zvarych said he had not been privy to 
the discussion and did not have details on who were 
candidates for what jobs.  (Comment:  Perhaps he did not have 
the details, but Zvarych also could have been sidestepping 
because OU-insider Petro Poroshenko was in the running for 
the PM job.  Tymoshenko claimed to us many times previously 
that Zvarych was in Poroshenko's corner.) 

Political fallout for OU? 

6. (C) According to Zvarych, at the June 13 faction meeting 
of OU, an "overwhelming majority" spoke in favor of a 
coalition with Regions.  Zvarych was surprised by this 
development, and pointed to it as proof that the tide within 
OU had begun to turn against Tymoshenko about two weeks 
previously.  Zvarych reiterated that Yushchenko would have to 
give a green light or signal before there would be an 
agreement with Regions, although Yushchenko would not have to 
"bless" the deal.  He acknowledged there would be "major 
ramifications" in terms of political fallout if OU created a 
coalition with Regions.  OU's strategy would be to move 
quickly on economic and other "bread and butter" issues that 
directly affected people's lives in order to shore up 
political support.  Zvarych opined that Tymoshenko would be 
"very active" against OU in the next few months and that OU 
would "have to learn how to take a punch -- there's no other 
way out."  OU's preliminary analysis was the party needed to 
ensure the coalition with Regions would last, because, if 
Regions were to pull out in a year, OU would "be sunk." 
Nevertheless, OU would be "irresponsible" not to set up a 
coalition, since it would be a major loser if Yushchenko 
dismissed the parliament.  Zvarych averred that a coalition 
with Regions would "strengthen Ukraine's sovereignty" and 
lead to both better relations with Russia and movement toward 
NATO.  He provided a read-out on specific policy issues 
discussed between OU and Regions (see below) and noted that 
Regions had "only" 30 proposals for the coalition agreement. 

Military Relations 

7. (C) From the coalition talks, Zvarych said Regions was 
fine with a September date to move ahead with a NATO 
Membership Action Plan (MAP).  Regions had "no problem" with 
seeking full NATO membership, only a "request" that OU not 
make public its agreement on NATO.  It would sign a private 
protocol affirming that Ukraine could move in the direction 
of NATO membership. 

8. (C) DCM noted we heard Regions planned to introduce and 
try to enact legislation June 15 authorizing an investigation 
into the events in Feodosiya and the presence of our Marine 
reservists in Crimea.  Zvarych said OU made it clear to 
Regions that, if they took such a step, OU would "close its 
doors" to Regions.  The party knew it had to take some steps 
to back away from last week's activities in Feodosiya and, if 
it wanted to move quickly to a coalition agreement, Regions 
needed to send a signal and take a public step on this issue. 
 It was hedging right now, and needed to work out its 
position.  Zvarych predicted that, once there was a Rada 
speaker, the legislation authorizing the exercise would be 
enacted.  Regions would not do an "about face" on the issue, 
but it would take incremental steps to change its position. 


KIEV 00002331  003 OF 003 

9. (C) Zvarych said Regions was "comfortable" with OU's 
position on safeguarding the territorial integrity of Ukraine 
and would support OU's legislation on territorial and 
administrative reform.  Such legislation would aim to 
decentralize power and push budgetary responsibility down to 
the Oblast and Rayon level. 

10. (C) Zvarych said Regions fully agreed with draft language 
in OU's coalition agreement.  Regions would subscribe to the 
ethical code laid out in the agreement, support the creation 
of a National Bureau for Investigation, and support reform of 
the Prosecutor General's Office to prosecute cases, not 
investigate them. 

Economic Issues 

11. (C) When queried on the RosUkrEnergo gas deal, Zvarych 
responded that it was "an interesting question," noting that 
a PM other than Tymoshenko could reach an accommodation with 
Moscow more easily.  That said, Zvarych noted Russia was 
acutely aware that Ukraine was moving toward the EU and NATO. 

12. (C) Zvarych said Regions was ready to end the moratorium 
on sale of agricultural land as scheduled on December 31, and 
observed that, on January 1, it should be possible to "move 
toward market relations" in the agricultural sector. 
However, first the GOU would need to set up the legal 
infrastructure to handle this as the land certificate system 
needed to be put in order. 

13. (C) Zvarych said WTO accession was "no problem" for 
Regions, with the caveat that Regions wanted to protect the 
metallurgical industry "within the WTO framework," an issue 
that still needed to be worked out. 

Late news from Bezsmertniy 

14. (C) In the late afternoon of June 15, OU lead negotiator 
Roman Bezsmertniy sent us a message noting that OU was 
"equidistant" from a coalition with Tymoshenko or Regions. 
He asked for input from us or Washington on the risks of 
coalition with either partner. 

15. (U) Visit Kiev's Classified Website: 




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