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October 5, 2007

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Reference ID Created Released Classification Origin
07KYIV2533 2007-10-05 13:47 2011-08-30 01:44 CONFIDENTIAL Embassy Kyiv

DE RUEHKV #2533/01 2781347
P 051347Z OCT 07

C O N F I D E N T I A L SECTION 01 OF 04 KYIV 002533 
E.O. 12958: DECL: 10/05/2017 
REF: KYIV 002522 
KYIV 00002533  001.2 OF 004 
Classified By: DCM James Pettit for reasons 1.4(b,d). 
1. (C) Summary.  Key players in the past two days have told 
us that they believe President Yushchenko is leaning towards 
a broad coalition, although BYuT and part of Our 
Ukraine-People's Self Defense are fighting hard for an orange 
government.  An ebullient Presidential Administration head 
Baloha told the Ambassador that everything now depended upon 
Yushchenko, as it should be, and that he would honor his 
promise to orange; however, with only a thin majority and the 
promise of an unstable government, Tymoshenko would fail to 
be elected as PM and the President would have to come forward 
with a plan for a national unity government between OU, 
Regions and Lytyvn.  Baloha noted that Yushchenko was eager 
to hear Washington's views.  A frustrated Tymoshenko told the 
Ambassador October 5 that a wing of the President's team, led 
by Chief of Staff Baloha and NSDC Secretary Plyushch, were 
pushing hard for a broad coalition, a choice she called 
unstable.  If that happened, BYuT would go into the 
opposition, but would also work for early presidential 
elections, which she believed Regions also wanted.  A relaxed 
Lytvyn told the Ambassador October 4 that he supported 
Yushchenko, but would never join an all orange coalition.  He 
thought that the decision rested with the President, and that 
Yushchenko was under tremendous pressure from both sides and 
did not know what to do.  Regions oligarch Akhmetov told the 
Ambassador that he wanted a broad coalition and had even 
offered to back Yushchenko's reelection bid in 2009.  Number 
5 on the OU-PSD list Mykola Katerynchuk said that he hoped 
Yushchenko would honor his electorate's desires and stay with 
Tymoshenko, but thought it could go either way.  Tymoshenko, 
Lytvyn, and Katerynchuk all warned that Regions might boycott 
the new Rada session if it found itself in opposition -- a 
move Tymoshenko said BYuT would not make if left out of the 
government -- but Akhmetov said he did not support such a 
2. (C) Comment.  The Ambassador has continued to reiterate to 
all sides that we have no preferred outcomes, but that we 
would like to see a government formed soon that would get 
down to work and that repeat elections will be destabilizing. 
 Baloha confirmed that a meeting for the Ambassador with 
Yuschenko would be arranged soon so that he could hear 
Washington views directly.  Baloha and Lytvyn seemed relaxed 
and relishing the political game ahead, while our other 
interlocutors seem subdued, frustrated, and even defeated. 
With the exception of Baloha, all sides seemed to have 
expected election results that would have more decisively 
pointed towards one coalition or another.  Instead, Ukraine 
is back in the position it occupied in spring 2006, with 
Yushchenko having to decide between Tymoshenko and 
Yanukovych, neither of whom he trusts or likes.  One reality 
that has become increasingly clear is that no matter which 
choice Yushchenko makes, his chances of reelection are slim 
at best.  Tymoshenko has indicated that her promises to back 
him in 2009 may be easily broken, while cooperation with 
Regions could irretrievably damage his standing with his 
electorate.  Yushchenko's lack of options and his history of 
making self-sacrificing choices for what he sees as the good 
of the country appear to be leading him to believe that a 
broad coalition would be more stable, although neither 
variant is likely to be particularly effective.  A probable 
side effect of the dual coalition negotiations may be to 
bring OU-PSD closer to a split, as the OU-PSD leaders and the 
presidential team, backed by the old school members of OU who 
are out of power within the bloc, advocate different 
positions.  End summary and comment. 
Baloha: Ready for a "Unity Coalition" When Orange Fails 
--------------------------------------------- ---------- 
3.  (C)  Presidential Administration Head Baloha, relaxed and 
confident, told the Ambassador October 5, that the election 
results, and the narrow "majority" held by the orange team 
had put President Yushchenko in the driver's seat, right 
where he should be.  Baloha said that he had hoped for a 
225-225 split, but that this close race was just as favorable 
for Yushchenko and his team as the political parties began 
their "war of nerves."  He criticized both Tymoshenko and 
Yanukovych for acting like the winners, noting that they 
should "not go beyond their competence."  He said that 
Tymoshenko and her "young" allies in OU-PSD were busily 
dividing up positions and dreaming of power, but that 
Yushchenko worried that orange would be an extremely unstable 
coalition, depending upon just a few votes to stay in power. 
At the same time, Yanukovych and his team had made many 
mistakes along the way and had not received the votes needed 
to stay in control of the process.  In fact, Yushchenko and 
KYIV 00002533  002.2 OF 004 
his team were fully in control and he was happy to lay out 
for the Ambassador the presidential team's proposed way ahead 
that would allow Yushchenko to meet his commitm
ents to both 
Tymoshenko and Yanukovych. 
4.  (C)  According to Baloha, the presidential team was 
meeting with Tymoshenko and OU-PSD leaders Lutsenko and 
Kyrylenko, derisively referred to several times as "kids," 
with a list of presidential demands for an orange government, 
including agreement on repealing the CabMin law, passage of 
laws repealing immunity and privileges for Rada deputies, 
passage of a package of anti-corruption legislation and 
agreement to participate in a new process to amend the 
constitution.  Baloha said that Tymoshenko wanted to amend 
the constitution to restore presidential powers, similar to 
those held by Kuchma, but Yushchenko and Regions both 
preferred a constitution that divided executive power between 
the President and PM; all that was needed was fine-tuning and 
clarification as to the powers of each.  According to Baloha, 
discussions would go on for the next 40 days (presumably a 
reference to 10 more days for the CEC to publish official 
results and then 30 days to seat the new Rada), give or take 
a few days.  At that point, the orange team would forward 
Tymoshenko's name to the President as the candidate to be PM. 
 He would then submit her name to the Rada and, given the 
small majority, Baloha was confident that the nomination 
would fail.  In Baloha's view, not even all the members of 
BYuT in the Rada would support her candidacy.  And Lytvyn was 
clear that he would not be in a government that reported to 
5.  (C)  At that point, per Baloha, Yushchenko would turn 
back to the other parties in the Rada and, with the stability 
and future of the country in mind, he would propose a kind of 
national east-west unity government to put forward a 
candidate.  He said that no one wanted to talk about a "broad 
coalition" anymore; that had become a kind of political 
"swear word."  Baloha thought that in this case, an OU-PSD, 
Regions and Lytvyn bloc coalition would have enough votes to 
form a coalition and propose a candidate for PM.  This would 
happen sometime in November.  What was needed was a 
government with 240-260 seats in order to be stable and 
govern the country.  He thought that Lytvyn might make a good 
speaker (although he also suggested that he would be a good 
candidate himself, easily getting more than 400 votes from 
all parties, including BYuT; however, he was not interested 
in the post), but anticipated that Tymoshenko would choose 
pure opposition instead.  The Ambassador repeated what he has 
said at all of his meetings -- that we did not have a 
preferred outcome, but looked forward to the formation of a 
coalition and a government as soon as possible.  Baloha said 
that Yushchenko and the presidential team were eager to hear 
what Washington was thinking about a future Ukrainian 
Tymoshenko: We're Losing the President 
6. (C) A clearly-frustrated Tymoshenko said October 5 that 
BYuT would continue to push for an orange coalition, but 
thought that it was more likely that Yushchenko will pick the 
broad option.  He was being pushed strongly in this direction 
by Baloha, Plyushch, former PM Yekhanurov, and former 
Environment Minister Kostenko.  In addition, Deputy PM Andriy 
Klyuyev had a pot of money designated to buy 10 OU MPs to 
vote against her nomination for PM, should Yushchenko submit 
it to the Rada; this would seal the deal with Regions. 
Yushchenko was making the same mistakes he made in 2005 and 
2006; Regions will dominate the coalition and the President's 
ratings will drop two times.  Moreover, a broad coalition 
would be very unstable and racked with constant fighting, 
just as it was in the fall of 2006 when seven OU ministers 
stayed in the Yanukovych Cabinet. 
7. (C) Tymoshenko said she saw few ways to stop the broad 
coalition other than continuing to negotiate with OU-PSD, but 
she warned that they would go public soon with Klyuyev's 
efforts.  Two thirds of OU-PSD opposed a broad coalition, she 
argued, but one-third will push for it.  However, one-third 
of OU-PSD, plus Regions and Lytvyn would still be less than 
226 seats, so they would need to invite the Communists in. 
She also said that they were expecting the Constitutional 
Court on October 9 to hear the case on imperative mandate, 
which would allow Rada factions to expel from parliament MPs 
who broke ranks.  The Presidential Secretariat was trying to 
stop this, but if the CC ruled in BYuT's favor, this would 
stop part of OU from joining with Regions.  There were three 
conditions that needed to be met to make an orange coalition 
work: 1) the CC would have to confirm the legitimacy of 
imperative mandate; 2) the President would need to control 
KYIV 00002533  003.2 OF 004 
the anti-Tymoshenko wing of his team; and 3) BYuT would have 
to take steps to calm Yanukovych and Akhmetov, primarily 
through the adoption of a generous law on the opposition. 
8. (C) If there was an orange coalition, they would invite 
Lytvyn in, but they would not make him Speaker.  She saw OU 
head Kyrylenko as the best choice for Speaker.  Tymoshenko 
also dismissed giving Regions multiple Cabinet positions. 
They could have the deputy prime minister for liaising with 
the Rada, but that was it -- to hand over other ministerial 
portfolios to the opposition would be destabilizing.  In 
addition, while they would consider giving Regions the 
Speakership, their starting negotiating position would be 
First Deputy Speaker.  Moreover, the candidacy of Raisa 
Bohatyreva would be much more palatable than Yanukovych.  And 
BYuT would never, ever give Regions any governor positions. 
9. (C) Tymoshenko acknowledged that Regions might not take 
its seats in the new Rada in the event of an orange coalition 
and would force new Rada elections.  This would keep the 
Yanukovych government in place two more months and allow 
Regions to prepare much more wide scale and successful 
falsifications in a new vote.  She also said that in the 
reverse situation, if an OU-Regions coalition happens, BYuT 
will take its seats in the Rada and work in the opposition. 
10. (C) The Baloha group was telling Yushchenko that he would 
never win reelection in 2009 if Tymoshenko became PM, but the 
opposite was true.  If Yushchenko chose to work with Regions, 
the latter will move to impeach the President in two to three 
months and BYuT will support their efforts.  Even if 
Yushchenko supported Tymoshenko as PM, she could only promise 
to support him as President in 2009 under certain conditions. 
 She said that if think tanks and analytical centers said 
Yushchenko would definitely beat Yanukovych, then she would 
back Yushchenko, but if they say he won't, she will not let 
Regions take the presidency (implying that she will run.) 
11. (C) She asked for U.S. help in convincing Yushchenko to 
do the right thing and in calming Yanukovych.  She wanted 
Western cou
ntries to acknowledge the freeness and fairness of 
the September 30 elections and say that they oppose repeat 
Rada elections.  The Ambassador confirmed that the U.S. 
position was that the elections had generally met 
international standards and that the U.S. did not want new 
elections, but hoped a new government would be formed 
quickly.  He also reminded her that the U.S. did not support 
specific coalition options -- that was a choice only 
Ukrainians could make. 
Lytvyn: Broad Coalition Is Best Option 
12. (C) Former Rada Speaker Lytvyn, looking relaxed and 
amused, told the Ambassador October 4 that he thought a broad 
coalition was the only stable path.  He was not interested in 
a coalition with just BYuT and OU-PSD; he supported 
Yushchenko, but not many other leaders in OU.  The future of 
the Rada and the government was in Yushchenko's hands now, 
Lytvyn argued.  The President's statement on October 3 that 
all parties in the Rada should enter into negotiations was 
proper and civilized. 
13. (C) Lytvyn warned that Tymoshenko was exerting powerful 
influence on OU leaders and taking advantage of their 
competing ambitions to benefit herself; Yushchenko was under 
tremendous pressure.  A solely orange government, he argued, 
would last six months at best, then Tymoshenko and Yushchenko 
will have a falling out, and Ukraine will wind up with early 
presidential elections.  (Note.  Presumably as a result of a 
deal between Tymoshenko and Regions.  End note.)  A 
228-member coalition was inherently unstable.  Moreover, 
Regions was already working on finding 10-20 MPs from 
BYuT/OU-PSD to make sure they won't participate in the new 
14. (C) A four party coalition would be difficult because 
there can only be one PM.  Yushchenko had to control the 
ambitions of the OU leaders.  BYuT would only support a broad 
coalition if Tymoshenko was PM, which she knows is 
unacceptable to Regions.  She cannot be in a government with 
Regions because it will hurt her presidential ratings.  The 
technical coalition would be ideal, but was unrealistic.  The 
next PM will either be Tymoshenko or Yanukovych. 
15. (C) Lytvyn said he met with Yanukovych on October 3. The 
PM had expressed a clear message -- he was ready to cooperate 
with OU-PSD to unite the country and he was willing to back 
Yushchenko's reelection bid.  Yanukovych and Lytvyn had both 
told this to Yushchenko, but it was clear the President was 
KYIV 00002533  004.2 OF 004 
getting other information.  Yanukovych also said that they 
will block the Rada's work if the coalition is BYuT-OU. 
Regions will defend themselves by going on the offensive; 
they become more united when threatened. 
16. (C) Lytvyn thought one possible scenario was for 
Yushchenko to agree to the orange coalition and nominate 
Tymoshenko as PM, but with the understanding that some in 
OU-PSD will vote against her and her bid will fail.  Then 
OU-PSD will be clear to form a coalition with Regions. 
Akhmetov: Pushing for Broad Coalition 
17. (C) The Ambassador met with Regions oligarch Rinat 
Akhmetov late on October 4 to hear his version of Regions' 
position.  Akhmetov said that his ideal scenario would be 
Yanukovych as PM, Tymoshenko as Speaker, and the Communists 
in the opposition, but this was not a realistic possibility 
since Yuliya will not agree.  A coalition of OU-PSD and BYuT 
with just 228 seats would not be a long-lasting coalition. 
In his view, Yushchenko had two options -- orange coalition 
or Regions-OU with possibly Lytvyn.  If Yushchenko picks 
broad, Akhmetov will back his reelection campaign in 2009. 
Akhmetov met with Yushchenko earlier that day, where 
Yushchenko reiterated his public statement that he wanted all 
parties to engage in negotiations.   However, Akhmetov 
believed Yushchenko was leaning towards broad.  The 
Ambassador emphasized the key points that we have been 
delivering to all sides -- the elections were pretty free and 
fair and we will work with any government that the Ukrainian 
parties form.  However, we would like to see a new government 
formed soon and get to work, so would be very disappointed to 
see Regions boycott the new Rada and force new elections, 
which would lead to turmoil and instability.  Akhmetov said 
he did not personally support boycotting the elections. 
Katerynchuk: Down, But Holding Out Hope for Orange 
--------------------------------------------- ----- 
18. (C) A glum Katerynchuk -- number 5 on the OU-PSD list, 
but now estranged from Lutsenko -- said October 4 he had not 
given up hope of an orange coalition.  He said that the 
OU-PSD presidium had confirmed October 1 that orange was the 
only coalition they would back.  A broad coalition would be a 
betrayal of their electorate.  In terms of reconciling 
Regions to a BYuT-led government, he said they would offer 
the opposition key Rada positions, like the Budget Committee 
and the Accounting Chamber, but they would not bring them 
into the Cabinet.  The agreement OU-PSD signed with BYuT gave 
BYuT the PM, OU-PSD the Speaker, then the parties would take 
turns filling ministerial portfolios.  He added that Foreign 
and Defense Ministers were outside negotiations.  He added 
that he believed post allocations within the OU-PSD quota 
would be non-transparent and undemocratic, with decisions 
made by a handful of individuals. 
19. (C) Katerynchuk thought that Regions would be radical 
opposition and would continue to push for more influence.  He 
thought they would also ask the Russians to raise the gas 
prices to increase pressure on Tymoshenko.  He also said he 
could not rule out the possibility that Regions would refuse 
to take their seats in the new Rada, which would keep the 
Yanukovych government in office.  Moreover, changes in the 
law gave the current Cabinet greater control over the budget 
than previous ones, so they could stay afloat longer without 
a parliament. 
20. (C) Katerynchuk also admitted that Yushchenko was worried 
about Tymoshenko running for president in 2009. He added that 
there would be other candidates too, including possibly 
Lytvyn, Lutsenko, and maybe himself. 
21. (U) Visit Embassy Kyiv's classified website: 




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