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December 29, 2006

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Reference ID Created Released Classification Origin
06KYIV4681 2006-12-29 13:18 2011-08-30 01:44 CONFIDENTIAL Embassy Kyiv

DE RUEHKV #4681/01 3631318
P 291318Z DEC 06

C O N F I D E N T I A L SECTION 01 OF 04 KYIV 004681 
E.O. 12958: DECL: 12/29/2016 
REF: A. KYIV 4133 
     B. KYIV 4478 
Classified By: Ambassador for reasons 1.4(a,b,d). 
1. (C) Summary.  Two years after the Orange Revolution and 
Yushchenko's election victory and almost five months into the 
prime ministership that has marked Yanukovych's triumphant 
return to the political center stage, the relationship 
between the two Viktors is rocky and full of mistrust. 
Although several long one-on-one meetings resulted in 
settling (albeit sometimes only temporarily) immediate points 
of conflict, the two Viktors have yet to come up with any 
other way to address and resolve issues.  The conflict 
between the two is based on badly worded and imprecise 
constitutional reforms that have created a dual executive and 
fueled by personality differences--Yanukovych pushing 
aggressively to gain the advantage and Yushchenko's 
indecisiveness and preference for compromise repeatedly 
backing him into a corner.  Yanukovych has sought to 
marginalize the President's powers this fall. Yushchenko has 
fallen back on his final levers of power, the veto and 
threats to rework constitutional reform or call new Rada 
elections.  Both sides continue to tell us that they would 
like to ease tensions and begin to work together 
productively.  Events in the past week indicate that they 
have made some compromises, but antagonistic actions by 
members of their teams, a general lack of trust, and a 
personal dislike will make this process slow and arduous at 
best.  End summary and comment. 
Two Years of Handshakes and Backstabbing 
2. (C) In December 2004, after it was clear that there would 
be a new presidential election, Yanukovych offered his hand 
to Yushchenko, the opponent he had just tried to defraud, and 
said that in the future, one Viktor would be President and 
the other Prime Minister.  Given the circumstances, 
Yushchenko rejected reconciliation and moved forward with an 
Orange Government.  However, in September 2005, in the wake 
of scandals and the dismissal of the Tymoshenko Cabinet, 
Yushchenko turned to Yanukovych and his Party of Regions to 
strike a deal.  Regions agreed to support Yuriy Yekhanurov as 
Prime Minister in exchange for presidential amnesty for 
almost everyone who participated in the 2004 election fraud. 
3. (C) In the wake of the March 2006 Rada elections, 
Yushchenko obsessed about whether to cooperate with his 
Orange partners or with Regions in forming the first 
government under the new political system.  At one point he 
observed to us that both Yanukovych and Tymoshenko were 
deeply flawed. Regions was clear that it wanted an 
orange-blue team and on June 20 Our Ukraine and Regions 
initialed a coalition agreement.  Yushchenko immediately 
changed his mind and renewed talks with Tymoshenko, leaving 
Regions to woo Moroz and the Socialists with power and money 
to form the Anti-Crisis Coalition, who took office in early 
August.  Although Regions leaders continue to indicate to us 
that they still prefer a coalition that includes Yushchenko 
and Our Ukraine, they have also demonstrated their intention 
to not be reliant on the indecisive President and to not put 
themselves in a position where they could lose power again. 
One story that a Rada MP from Tymoshenko's bloc related to us 
had Yanukovych in Belarus after the CIS summit in late 
November saying, "We are here to stay.  We will never lose 
power again." 
Personalities Defined the Struggle 
4. The poorly-worded, ambiguous political reforms may have 
opened the door to the current struggle for power, but it has 
been the difference in style of the Yanukovych and Yushchenko 
teams that has really led to the imbalance and hostility. 
Yushchenko is confrontation-averse, postpones a search for 
solutions until the last moment, then looks for compromise. 
He has brought in a new team at the Presidential Secretariat 
this fall that is more conversant in Regions' rough style of 
politics, but his reluctance to take on the Prime Minister's 
team directly has put him in a weakened position.  In 
contrast, Yanukovych and his advisers have aggressively 
looked for ways to redefine power in their favor, 
particularly by proposing provocative legislation that chips 
away at Yushchenko's authority and challenges his role 
(reftel A). 
5. (C) Nowhere has the fight between Viktors been more public 
KYIV 00004681  002 OF 004 
and acrimonious than over foreign policy and Foreign Minister 
Tarasyuk himself.  According to the amended constitution, 
foreign policy remains largely a presidential prerogative and 
the President nominates the Foreign Minister (although the 
nomination is confirmed by the Rada).  Yanukovych first 
stepped gently over the line in September when he flew to 
Brussels and announced a NATO policy without clearing it with 
the President's office that would include cooperation, but 
also a "pause" in Ukraine's search for membership for the 
time being.  There then e
nsued a struggle over whether the 
President had authority to approve the Cabinet's foreign 
travel agenda, talking points, and public statements. 
Regions finally leaped clearly over the line on December 1 
when its Rada majority voted to dismiss Tarasyuk.  Yushchenko 
publicly said that Tarasyuk is his man (reftel B).  The 
Yanukovych side refused to let Tarasyuk attend Cabinet 
meetings on December 6 and 20--the later turning into a 
shoving match between Regions MPs stationed in front of the 
door and OU MPs who came to push their way into the 
meeting--and no longer views any documents he signs as valid. 
 This fight over power and foreign policy was also behind the 
eleventh hour attempt by the Presidential Secretariat to 
cancel Yanukovych's trip to Washington at the beginning of 
December because the Cabinet had not cleared the PM's 
briefing papers with Yushchenko. 
6. (C) The fighting has spanned all areas of competency and 
subject matter.  The Rada majority removed Interior Minister 
Lutsenko, a member of Yushchenko's team, tried to remove 
Defense Minister Hrytsenko, and has tabled a resolution to 
remove Prosecutor General Mevedko--the latter two are 
presidential appointments, according to the constitution. 
Regions has been trying to remove regional appointees that 
Yushchenko has the right to name.  The Cabinet also demanded 
the right to countersign presidential decrees.  Backed into a 
corner, Yushchenko vetoed the Rada's first try at a budget. 
7. (C) Regions has periodically since the summer tabled 
legislation meant to antagonize and threaten Yushchenko.  The 
most recent example are two bills introduced December 15 and 
18 that would restore the Central Election Commission to the 
composition that declared Yanukovych the winner of the 2004 
presidential election.  After Yanukovych made vague 
conciliatory remarks about Tarasyuk, on December 26 First 
Deputy Prime Minister Azarov said publicly that Tarasyuk was 
not Foreign Minister anymore.  The remarks followed the 
decision by Regions Deputy Leonid Kozhara to introduce a 
resolution to officially name First Deputy Foreign Minister 
Oryzkho as Acting FM.  The CabMin also filed four lawsuits 
against Yushchenko in December, claiming that he was issuing 
illegitimate decrees and not making decisions when he should 
8. (C)  Perhaps to reassert his authority, Yushchenko issued 
a decree on December 4 that said he had the right to approve 
all appointments in ministries associated with national 
security; he then used the decree to try to cancel the 
CabMin's approval of new Interior Minister Tsushko's 
nominations for his deputies. The case, like so many others 
this year, is now before the Constitutional Court, which 
eventually will need to weigh in to settle at least the 
institutional disputes between President and Prime Minister. 
Reconciliation Sought? 
9.  (C) In the past two weeks, members of the Yanukovych team 
have reiterated their commitment to seeking accommodation 
with Yushchenko.  On December 15, MP Raisa Bohatyreva, the 
coordinator of the Rada coalition and the Regions faction 
leader, told the Ambassador that the "non-radical" part of 
Regions was concerned that lack of cooperation with President 
Yushchenko and Our Ukraine was destructive for the country. 
She said that while it is true that the entourages around the 
two principals stir up a lot of the conflict, the level of 
antagonism between the two Viktors also had grown 
significantly.  There was a tit for tat scenario at work 
affecting a wide range of unrelated issues: the CabMin made 
appointments that the President didn't like (a reference to 
new Minister of Emergencies Nestor Shufrych), so Yushchenko 
vetoed the budget, so the Rada refused to dismiss 
Drizhchaniy, and so on.  Yanukovych,s Chief of Staff 
Lyovochkin told the Ambassador on December 20 that they were 
trying to find means of communication and cooperation, but 
problems in the relationship should not be solved at the 
Viktor-Viktor level. Instead, he proposed that the main line 
of communication for all problem-solving should be between 
himself and Presidential Secretariat Chief Baloha.  (Note: 
In a December 29 meeting with the Ambassador, Deputy Head of 
the Presidential Administration Yatsenyuk denied that 
Lyovochkin had a special channel to Baloha, arguing that 
KYIV 00004681  003 OF 004 
Baloha's counterpart was the PM himself.  End Note.) 
10. (C) At a press conference on December 28, Presidential 
Secretariat Head Baloha, his deputies Yatsenyuk and Chaliy, 
and NSDC Secretary Haiduk expressed a willingness to work 
with the Cabinet but laid down markers of where the 
President's powers lie.  Baloha said that the new policy is 
"competition, compromise, and consolidation" and said the 
ability to compromise is a sign of strength. However, the 
team also underscored that Yanukovych is head of the 
government, but Yushchenko is the head of state, which gave 
him a broader and higher mandate.  They announced Yushchenko 
will veto the law on the Cabinet of Ministers submitted by 
the CabMin unless they incorporate his changes.  He will also 
issue a decree that will make it clear he, not the CabMin, is 
in charge of the appointments of regional officials. 
Yatsenyuk echoed this theme to the Ambassador December 29. 
The two Viktors will never like each other and there is still 
conflict, but Yushchenko is ready to cooperate, albeit on his 
terms.  The choice between conflict and cooperation lies with 
the Prime Minister.  He added that the Viktor-Viktor meetings 
are only productive when Yushchenko holds a trump card.  If 
Yushchenko seems weak, Regions just ignores him, he 
concluded.  This observation could explain why Yushchenko's 
threat to veto the budget a second time produced results. 
11.  (SBU)  Another concern, which was recently highlighted 
in the respected Dzerkalo Tyzhnya newspaper, may be that both 
the Yanukovych and Yushchenko teams are aware of what the 
squabbling looks like both at home and abroad.  Key players 
on both sides are starting to worry that the squabbling is 
hurting their efforts to promote an image of Ukraine as a 
western-style democracy with a functioning and pragmatic 
government.  Although it is difficult to judge whether polls 
here are valid, both the PM and the President have lost 
public support and in general, public disillusionment with 
Ukrainian politics and politicians is growing.  Particularly 
telling are the low marks that Yushchenko has been getting 
from the public on trust -- a sharp turn-around from public 
perceptions throughout his two years in office. 
Baby Steps of Progress 
12. (C) Thus far only face-to-face meetings between the two 
Viktors seem to have paid off with any kind of results. 
Observers credit the six-hour November 14 meeting between the 
two with postponing a Rada vote to remove bot
h FM Tarasyuk 
and Defense Minister Hrytsenko (although in Tarasyuk's case, 
the agreement was only temporary).  Yushchenko and Yanukovych 
also met, along with the coalition leaders, on December 15; 
Lyovochkin told the Ambassador this was the first time they 
had all met together since August.  Lyovochkin said the 
meeting went well and they were working on finding a solution 
to the Tarasyuk question, but that outstanding problems 
remained.  These included the governor of Sumy, whom 
Yushchenko fired but Regions was trying to protest; the 
Rada's refusal to confirm Yushchenko's dismissal SBU Chief 
Drizhchaniy; and agreement on the budget, which Bohatyreva 
had said was the main reason for the meeting.  However, given 
the complexities of coalition politics here, it is unlikely 
that Yanukovych would have had the political leeway to cut 
deals with Yushchenko on any of these issues in front of his 
socialist and communist allies. 
13. (C) The two Viktors met again on December 21, on the eve 
of the Putin visit to Kyiv.  While we have little direct 
information on what was agreed, there seems to have been some 
progress and resolution of several of the most immediate 
problems between the two.  Yushchenko signed the budget on 
December 22, even though the Rada had re-passed it without 
incorporating all of the President's requested changes.  The 
same day, the Rada approved his request to increase the 
living wage and minimum wage beginning in April 2007, albeit 
as a (presumably less binding) resolution, rather than as a 
part of the budget law.  Deputy Head of the Presidential 
Secretariat Yatsenyuk told the Ambassador on December 29 that 
they viewed the resolution of the budget conflict as a 
victory for Yushchenko. 
14. (C) In Yatsenyuk's view, the Rada's agreement to dismiss 
Drizhchaniy, per Yushchenko's request, was part of the deal. 
Yushchenko also got his way in Sumy--Regions dropped their 
protests about his replacing the former governor.  Most 
journalists and some politicians have linked the budget 
signing and the Drizhchaniy dismissal as a quid pro quo 
agreed on by the two Viktors at the December 21 meeting.  The 
postponement of the Tarasyuk question may also have been 
included in the deal--Deputy Head of the Presidential 
Secretariat Chaliy and the Prime Minister's foreign policy 
advisor Gryshchenko both told the Ambassador after the 
KYIV 00004681  004 OF 004 
meeting that the Tarasyuk issue had been put off for now, due 
to "timing issues," possibly also related to Putin's visit. 
In Chaliy's view, tensions between the two leaders had 
decreased.  Yatsenyuk and Chaliy also told the Ambassador 
that progress had been made on the issue of how to agree on 
the appointments of regional officials. 
15. (C)  Comment: With no meetings between the PM and 
President on the schedule and two weeks of New Year and 
Christmas holidays ahead, we anticipate no surprise 
announcements in the near future.  However, discussions will 
continue behind the scenes as both sides seek to find a way 
to make cohabitation work to their advantage. 
16. (U) Visit Embassy Kyiv's classified website: 




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