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September 18, 2007

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Reference ID Created Released Classification Origin
07KYIV2401 2007-09-18 13:14 2011-08-30 01:44 CONFIDENTIAL Embassy Kyiv

DE RUEHKV #2401/01 2611314
P 181314Z SEP 07

C O N F I D E N T I A L SECTION 01 OF 04 KYIV 002401 
E.O. 12958: DECL: 09/18/2017 
REF: KYIV 2247 
KYIV 00002401  001.2 OF 004 
Classified By: Ambassador for reasons 1.4(b,d). 
1. (C) Summary and comment.  With reliable polling suggesting 
that no one party will win an outright majority on its own in 
the September 30 elections, a coalition will have to be 
formed either based on an orange variant, a broad coalition 
that in some way joins the Party of Regions and Our 
Ukraine-People's Self-Defense (OU-PSD), or a return to a 
Regions-Communists coalition.  Most likely, the decision will 
fall to either Regions or President Yushchenko and OU-PSD, 
depending on the voting results.  If the two orange blocs, 
OU-PSD and BYuT, win a majority (226 seats), it will be 
OU-PSD's decision whether to form an orange coalition or to 
move to a broad coalition with Regions.  If the orange teams 
are not successful, Regions will have the option to 
collaborate again with the Communists (CPU) or form a broad 
coalition with OU-PSD.  Should a fifth party make it into the 
Rada -- with the Lytvyn bloc being the most likely to do so 
-- that party may hold the "golden share", putting it in a 
position to determine what the coalition looks like, in the 
absence of a Regions-OU-PSD coalition.  A major calculation 
now in the thinking of all three leaders -- Yushchenko, Prime 
Minister Yanukovych, and opposition leader Tymoshenko -- is 
the 2009 presidential elections and how various coalition 
permutations will benefit them or harm their opponents.  To 
some degree, according to many political insiders, this has 
become the most important consideration, with less concern 
given to the functioning of the Rada and the governing of the 
country for the next eighteen months.  End summary and 
Current Polling Shows Neck and Neck Race 
2. (SBU) Polls announced in the last week by two reliable 
firms -- Democratic Initiatives (DIF) and Razumkov Center -- 
and a poll commissioned by IFES for USAID all show the totals 
for Regions and CPU on the one hand and for the orange side 
on the other as very close, with still a significant number 
of undecideds, making the final outcome hard to predict. 
Given the close race, even a small amount of fraud has the 
potential to dramatically alter the results (reftel).  The 
IFES poll indicated that of likely voters, Regions would 
receive 32.4 percent, BYuT 20.9 percent, OU 10.6 percent, CPU 
3.3 percent, and Lytvyn 2.3 percent.  However, there were 
15.9 percent still undecided, but likely to vote, and IFES 
analysts believed that Tymoshenko may benefit from these 
voters and that Lytvyn may slip across the three-percent 
threshold.  DIF reported that Regions was polling at 29.9 
percent, BYuT at 20.3 percent, OU-PSD at 9.4 percent, and 2.1 
percent for CPU, with 9.4 percent still undecided.  Razumkov 
reported support as: Regions 33.9 percent, BYuT 23.5 percent, 
OU-PSD 13.1 percent, CPU 5 percent, Lytvyn 3 percent, and 9.3 
Choice Lies with Regions: Current vs. Broad Coalition 
--------------------------------------------- -------- 
3. (C) If the orange opposition does not win 226 seats and 
just the four main parties make it into the Rada (Regions, 
OU-PSD, BYuT and the Communists), as polls currently suggest, 
then the decision on with whom to unite lies primarily with 
Regions.  This is likely to produce a debate within Regions 
among the Akhmetov wing, Yanukovych/Klyuyev, and the Azarov 
wing over whether a coalition with OU-PSD or the Communists 
would be more preferable.  We believe that Regions' first 
overture would be to OU-PSD, but would include the demand 
that Yanukovych be named Prime Minister again, as the head of 
the party that got the most votes.  Because Yushchenko and 
OU-PSD would have fewer options, this demand would be seen as 
more reasonable.  And on the Regions' side of the house, 
although some whisper that Akhmetov would like to jettison 
Yanukovych as part of the deal to get to a broad coalition, 
most including leading journalist Yuliya Mostova and 
industrialist Viktor Pinchuk have told us that Yanukovych is 
simply too popular with Regions' voters to not get the PM job 
again this time around. 
4. (C) If Regions are smart, they will use the threat of a 
Communist alliance and the argument that Ukraine needs unity 
to persuade Yushchenko to accept a broad coalition.  Regions 
may even offer OU-PSD a number of key ministries and the 
speakership to sweeten the bitter pill of the renomination of 
Yanukovych.  In this scenario, there is likely to be a split 
in OU-PSD, as Lutsenko told the Ambassador on September 10, 
with some of the bloc voting with the opposition.  Yushchenko 
may be able to use his personal sway with Lutsenko and 
Kyrylenko to convince them not to vote against the Yanukovych 
government's confirmation, but he probably will not succeed 
KYIV 00002401  002.2 OF 004 
in getting them to participate in the Cabinet or to vote with 
the coalition, except on a case-by-case basis.  Number 3 on 
the Regions list Inna Bohoslovska told us that "we know 
Yushchenko will agree to coalit
ion talks only if we have an 
undisputed victory," meaning that Regions wanted to win by 
enough of a margin to push the President into negotiations. 
5. (C) If Regions becomes frustrated with Yushchenko's lack 
of commitment or indecisiveness -- as they did in 2006 -- 
Regions could in the end return to the Communists as an 
alternative, although they may be more reluctant to do so 
this time than in 2006. To begin with, the Socialists would 
no longer be in the coalition as a buffer between Regions and 
the Communists, so the latter's hostile anti-Western rhetoric 
and anti-market reform position could taint Regions more in 
the international view, a concern for pro-European 
businessmen in the party.  In addition, Regions would be 
forced to offer more to the Communists this time -- last year 
the Communists received only one ministry.  There is already 
talk that the Communists would like the speakership. 
However, some in Regions argue that this is the only 
realistic alternative.  For example, number 5 on the Regions 
list Nestor Shufrych told the Ambassador September 12 that it 
was very unlikely that there would be a broad coalition given 
the fact that the country was about to launch into the 2009 
presidential election.  In fact, Shufrych said he was put at 
the top of the Regions party list in order to reassure people 
that after everything, there would be no broad coalition. 
Communist leader Symonenko is reportedly telling everyone who 
will listen that a Regions-Communist Alliance is Moscow's 
choice and that Regions will listen to the Kremlin. 
Choice Lies with Yushchenko: Orange, Broad, or Technocratic 
--------------------------------------------- -------------- 
6. (C) If the opposition does win 226 seats and just the four 
main parties make it into the Rada, the decision on coalition 
formation will lie primarily with the President, in 
consultation with his bloc.  Many of the key leaders in 
OU-PSD -- Lutsenko, Kyrylenko, Tarasyuk -- have said publicly 
and privately that they will not be in a coalition with the 
current majority parties.  However, they have been somewhat 
careful in their phrasing to hint that their objection is to 
some current ministers, including Yanukovych, rather than to 
everyone in Regions and their personal loyalty to Yushchenko 
could allow them to be persuaded by the President.  This 
leaves open the possibility of the so-called "technocratic 
variant" that has become the subject of speculation in the 
past two weeks.  If Regions sees the likelihood of a 
coalition between OU-PSD and BYuT, it may be more inclined to 
offer up a neutral technocratic PM, in exchange for a broad 
coalition with OU-PSD.  Even if orange does not have a 
majority, Akhmetov may push for a technocratic PM to lock 
OU-PSD in and avoid the Communists, but this is less likely. 
7. (C) This technocrat variant would be difficult to 
accomplish, given the high level of distrust between the two 
parties and the strong objections from Yanukovych and the 
pro-Russian wing of Regions, but it is not impossible.  One 
compromise could include giving Yanukovych the speakership, 
as the head of the largest party in the Rada, in exchange for 
his agreement to a different PM.  Such a new government would 
probably also see the departure of Azarov.  Lutsenko told the 
Ambassador September 10 that they would want Klyuyev gone as 
well, but the DPM may have enough ties to key leaders in OU 
to keep his position intact.  PM foreign policy adviser 
Gryshchenko told the Ambassador September 11 that the 
technocratic cabinet was the most probable variant, Regions 
just need to overcome Yanukovych,s opposition.  Journalist 
Mostova told the Ambassador September 18 that she believed 
that Yanukovych was afraid to lose power, or worse end up in 
prison, and would agree to be Speaker if necessary to avoid 
that if his non-Akhmetov backers let him. 
8. (C) On the other hand, Yanukovych may have enough backing 
within Regions to fight off a technocratic variant.  Oligarch 
Viktor Pinchuk told the Ambassador September 14 that he 
believed Yanukovych, who was now more popular than even a 
year ago, would not agree to a OU-PSD/Regions deal in which 
he would be replaced by a technocrat PM.  Pinchuk believed 
Yanukovych could convince Regions voters to support NATO, 
suggesting that some in OU would be okay with Yanukovych as 
PM.  Mostava argued that Yanukovych was simply too popular 
with his voters to be denied the PM's chair.  OU financier 
Poroshenko also discounted a possible broad coalition with a 
technocrat PM, saying Regions would not support it because 
Yanukovych was immensely popular among the party's core 
voters and integral for Regions' plans for the 2009 
presidential election.  He argued, however, that he saw no 
alternative to a broad coalition if the country is to address 
much needed constitutional and economic reforms; Ukraine 
KYIV 00002401  003.2 OF 004 
needed a coalition of economically liberal, forward learning 
thinkers that were present in both OU and PR. 
9.(C) Given the likelihood that the negotiations described 
above will take place even if the combined orange forces get 
the needed 226 seats to form a Rada majority, BYuT will have 
to work hard to keep OU-PSD interested in a new orange 
government.  Tymoshenko and her lieutenants have been clear 
that they believe the offer to split the Cabinet slots 50-50 
with OU-PSD is a major concession, since they anticipate that 
they will hold far more seats that OU-PSD in the new Rada. 
However, their insistence that Tymoshenko be PM is a given 
and the level of suspicion and distrust in the Presidential 
Secretariat and OU of Tymoshenko will make it hard for the 
President to accept the deal.  Making it worse could be 
BYuT's decision to go on the attack against OU-PSD during the 
campaign in a bid to get 226 seats on its own.  (Note.  A 
scenario we deem highly unlikely. End note.)  Even Lutsenko 
expressed unhappiness with her use of black PR against them; 
we judge his disappointment with his former orange ally as 
the possible reason that he told us he was now open to the 
technocratic variant. 
Golden Share: Lytvyn's Possible Comeback 
10. (C) There are three other parties that have a chance to 
make it across the three-percent threshold -- the Lytvyn bloc 
is the most likely, but Vitrenko's Progressive Socialists 
(PSPU) and the Socialist Party (SPU) could also make a run 
for the Rada.  Should any fifth party make it into the Rada, 
that party is likely to influence the outcome of the 
coalition, as Moroz did in 2006.  In Lytvyn's case, he will 
have a strong say in whether the coalition is orange, broad, 
or a new Anti-Crisis coalition.  If the Socialists make it 
in, the chances for the current Anti-Crisis Coalition to be 
reformed increases significantly.  On the other hand, a PSPU 
victory would greatly increase the likelihood of a broad 
coalition because Regions is unlikely to want a coalition &#x000
A;that includes Vitrenko's radicals.  At this point, the polls 
suggest that neither the Socialists nor PSPU will make it 
into the new Rada, leaving only Lytvyn's party as a potential 
11. (C) Lytvyn, who has been accused by both sides of 
accepting campaign contributions from the other, has noted 
his preference for entering a coalition with OU-PSD as the 
lesser of two evils.  However, he told us that his main focus 
was on keeping Tymoshenko out of power, repeatedly describing 
her as power hungry and a disaster for the country.  He 
implied that he would join any coalition, including with 
Regions, to block BYuT.  Moreover, Lytvyn has financial and 
political support from proponents of a Regions-OU-PSD 
coalition.  Poroshenko confided that he has acted as an 
informal consultant to Lytvyn's campaign and has supported 
polling on Lytvyn's behalf.  He argued that Lytvyn's presence 
in the Rada would create more stability and more motivation 
for a broad coalition, because he also does not want to see 
Tymoshenko in power.  Moreover, Poroshenko said Lytvyn would 
not fight hard for a specific position, such as the PM job in 
a broad coalition.  (Note. Lytvyn recently commented publicly 
that he would seek a top position, such as the speakership or 
premiership, should he make it into the Rada.  End note.) 
Pinchuk also confirmed that he was "supporting" Lytvyn's 
efforts, adding that they have been friends for many years. 
The Presidency Factor 
12. (C) Politicians and analysts alike tell us that the 2009 
presidential race is now a major factor in calculating 
possible post-electoral coalitions.  Yushchenko, in 
particular, seems focused on how to win reelection.  Some, 
including Mostova and Lutsenko, suggested he could make 
Tymoshenko his PM, because doing so would require her to 
promise not to run in 2009, a deal her foreign policy adviser 
Nemyria told us she was willing to make.  Lutsenko suggested 
that if Tymoshenko was the PM, she would be forced to 
implement potentially unpopular reforms, which could set her 
up for failure and possibly ensure a Yushchenko victory. 
Finally, others argue that if Yushchenko wants a broad 
coalition, then he will need to find a way to bring 
Tymoshenko into the deal.  Otherwise, as leader of the 
opposition to a Yushchenko-Yanukovych alliance, Tymoshenko 
could end up getting half of the president's electorate and 
set her up for an easy victory.  However, the same 
calculation might keep Tymoshenko from objecting strenuously 
to a broad coalition, if she thinks she can gain maximum 
political advantage on remaining on the outside. 
13. (C) Similar presidential calculations have made many 
KYIV 00002401  004.2 OF 004 
skeptical that Regions would agree to a coalition without 
Yanukovych as PM.  Poroshenko believed that Regions would not 
jettison Yanukovych because the party needs a strong 
candidate for the presidency in 2009 if it is to become a 
lasting institution in Ukrainian politics.  Yanukovych is 
Regions' figurehead, the glue that keeps the party together. 
He is immensely popular among the party's core voters.  And 
the party simply does not have an alternative leading figure. 
 Lytvyn said that he believed a broad coalition could be 
formed if Yanukovych and Regions promised to back Yushchenko 
to receive Regions support for 2009 -- since both are focused 
on keeping Tymoshenko out of power. 
14. (C) Presidential Secretariat Head Baloha suggested to the 
Ambassador on September 18 that OU-PSD would promote the idea 
that whichever major party was not in the coalition should 
receive the speakership, in effect tying all three parties 
into the government in some form in order to unite the 
country and stop the bickering.  Such a move would also 
prevent either Tymoshenko or Yanukovych from completely 
distancing themselves from the others in 2009 and would allow 
the presidential team to keep them more in check.  On the 
flip side, this very point will make the scenario a 
potentially hard sell for both Yanukovych and Tymoshenko. 
15. (C) In Mostova,s view, when Yushchenko agreed to push 
for pre-term elections, his main goal was to reshape the 
formation of the coalition and to prevent his rivals -- 
Yanukovych and Tymoshenko -- from getting ahead, presumably 
on the road to the presidency.  She thought that Tymoshenko 
would do everything possible to be PM, but her bottom-line 
goal, either as PM or not, was to be President in 2009.  If 
Tymoshenko was denied the PM's chair, she could still win the 
presidency as head of the opposition, if OU and Regions 
formed a broad coalition, or even if OU and BYuT formed a 
government without her.  In this case, she would have to 
campaign as the people's champion, thwarted by powerful 
political interests.  However, according to Mostova, this 
scenario was unlikely since Tymoshenko would be without the 
necessary administrative resources to conduct a successful 
presidential campaign, making her more likely to at least 
engage in all potential coalition discussions rather than 
taking a stand against any option but orange. 
16. (U) Visit Embassy Kyiv's classified website: 




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