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January 17, 2008

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Reference ID Created Released Classification Origin
08KYIV102 2008-01-17 11:22 2011-08-30 01:44 CONFIDENTIAL Embassy Kyiv

DE RUEHKV #0102/01 0171122
P 171122Z JAN 08

C O N F I D E N T I A L SECTION 01 OF 04 KYIV 000102 
E.O. 12958: DECL: 01/17/2017 
REF: KYIV 00034 
Classified By: Ambassador for reasons 1.4(b,d). 
1. (C) Summary.  With an eye toward reelection in early 2010, 
President Yushchenko is asserting himself more confidently 
now with coalition partner Tymoshenko as Prime Minister than 
he did when faced with Yanukovych.  The President has issued 
numerous public statements instructing the government on how 
to act and what to focus on and taking credit for activities 
that Tymoshenko initiated.  He has much more contact with the 
Cabinet and Rada than he did under the Anti-Crisis Coalition. 
 Yushchenko also has submitted a laundry list of legislation 
to the Rada -- he has 17 bills earmarked as "urgent" -- many 
of which are needed, some of which would increase his power. 
In particular, his amended law on the Cabinet of Ministers 
would correct some conflicts with the constitution, but would 
also water down some of the Prime Minister's powers -- to the 
benefit of the President, but also to the benefit of 
individual ministers and regional government.  Yushchenko 
also submitted bills to give him more discretion over 
Constitutional Court judge appointments and to subordinate 
the Interior Minister's troops directly under himself, albeit 
with the new name National Guard.  He has instituted a weekly 
meeting with the PM and Speaker, and also convened a regular 
meeting of ministers and Rada deputies belonging to his bloc 
to ensure loyalty.  For the most part, PM Tymoshenko's 
response to this newly-assertive Yushchenko has been measured 
and cautious, maintaining a publicly supportive attitude for 
all of the President's initiatives.  However, some cracks 
have appeared inside the coalition, particularly within the 
President's Our-Ukraine People's Self Defense, which the 
President will have to watch closely. 
2. (C) Comment.  Yushchenko clearly learned from his losing 
battles with Yanukovych that he has to come off strong from 
the beginning.  He may be hoping to reinvent his image as 
that of a strong leader and take credit for any Tymoshenko 
government achievements, while trying to contain the active 
Prime Minister.  In part, Tymoshenko's caution and dependence 
on Yushchenko to keep Our Ukraine-People's Self Defense in 
the coalition, and Rada Speaker Yatsenyuk's loyalty to the 
President have given Yushchenko more leeway now to assert 
himself.  Not all of his actions are negative -- they also 
have the benefit of increasing coordination and cooperation 
between the President, Cabinet, and parliament.  However, 
they could cause friction if Tymoshenko begins to resent the 
President's intrusions.  Thus far Tymoshenko has refused to 
take the bait, commenting either in a conciliatory manner or 
not at all.  She appears to be committed to making this 
coalition work, but is also buying herself time to accomplish 
some of her campaign promises before the presidential 
election cycle begins later this year to be ready if 
Yushchenko self-destructs or if she decides that the time is 
now to run for President.  End summary and comment. 
Yushchenko Takes Control 
3. (SBU) Since the bruising political deadlock of spring 
2007, President Yushchenko has re-emerged as the dominant 
political figure in the government -- a role that he played 
with confidence during the post-September election process of 
government formation and one that has continued as the 
Tymoshenko government begins its work.  Yushchenko wasted no 
time in initiating weekly meetings with PM Tymoshenko and 
Rada Speaker Yatsenyuk to coordinate activities and discuss 
priorities.  After the meeting on January 10 -- to which he 
brought Presidential Secretariat Head Baloha and NSDC 
Secretary Bohatyreva -- he gave a press conference, where he 
unveiled his vision for the Tymoshenko Cabinet.  He laid out 
the following key objectives for the Cabinet: drafting 
"well-balanced and coordinated" amendments to the 2008 
budget; improving  the combat effectiveness of the armed 
forces and expediting the disposal of surplus munitions; 
preparing for the 2012 European Soccer Cup; developing a new 
concept for the construction of affordable housing; and 
restructuring VAT refund debts.  Yushchenko also said that 
the government program that the PM was drafting should take 
into consideration his state of the union speech to the Rada, 
scheduled for February 5. 
4. (SBU) In addition, Baloha has given two strongly-worded 
press conferences where he laid out presidential instructions 
for the PM.  He gave a speech January 11 criticizing 
Tymoshenko for chaos connected to the Sberbank (Oshchadbank) 
repayments, while saying Yushchenko wanted the first tranche 
completed in 2-3 months.  Baloha also gave the President 
credit for increased pensions and wages and warned the CabMin 
that they had to double the military's budget in 2008. 
Baloha gave another speech January 15 laying out the 
KYIV 00000102  002 OF 004 
President's requested changes to the government program 
drafted by the Tymoshenko Cabinet, which was sent to the 
Secretariat for approval before the CabMin submitted
it to 
the Rada for approval. 
5. (SBU) The Presidential Secretariat also has initiated a 
wave of key legislation, including amended laws on the 
Cabinet of Ministers, the Constitutional Court, the High 
Council of Justice, Local Self-Government and Local 
Government Administration, and new laws on turning the 
internal troops into a National Guard; on the strength of the 
armed forces in 2008; on granting legal status to those who 
fought in the Ukrainian Insurgent Army in the 1940s and other 
independence movements; and ratification of the GUAM charter. 
 The President asked the Rada to give up its winter recess 
and stay in session so that they could consider his laws, 
which he deemed a priority.  After some initial pushback, 
Yatsenyuk proposed a compromise that leaves the Rada in 
session for an extra week of work, mostly in committees to 
review registered bills, and still gives MPs a week of rest. 
The change in session was approved January 15 by 374 MPs, 
including 137 from Regions. 
New CabMin Law 
6. (C) The CabMin law is probably the most significant piece 
of legislation Yushchenko has submitted because the current 
version of the law, which was written by the Yanukovych 
government and came into force in February 2007 after Regions 
and BYuT joined forces to override a presidential veto, 
stripped the presidency of a number of powers.  Yushchenko's 
proposed CabMin law clarifies a number of unclear articles 
from the previous iteration of the law, removes a number of 
perks that ministers historically have received, devolves 
some power from the PM to the ministers and to regional 
administrators, and shifts more power back to the President. 
Under the proposed new law, ministers, not the PM, would 
nominate their deputies for a Cabinet vote, and ministers 
would have more direct control over executive bodies that 
fall under their jurisdiction.  Many of the other changes are 
logical revisions to poorly or unconstitutionally-worded 
articles in the current law.  The draft removes language 
allowing the Rada to put forward nominations for PM, Defense 
Minister, and Foreign Minister if the President does not do 
so within a certain amount of time.  (Embassy Note.  The 
current law's restriction of the President's right to 
nominate seems unconstitutional to us.  End note.)  The new 
draft also clarifies that only the President can remove the 
Defense and Foreign Ministers, which is not spelled out in 
the constitution and which the current iteration of the 
CabMin law gives the Rada majority the right to do.  The 
draft law annuls the need for the PM to countersign 
presidential decrees, which was slowing down work in late 
2006 and early 2007. 
7. (C) However, some of the amendments seem aimed at shifting 
more power to the President.  For example, the President 
would be able to initiate dismissal of the Cabinet with Rada 
approval, although the procedure is not spelled out.  The 
bill would remove limitations on NSDC and Presidential 
Secretariat interference into the Cabinet's work by requiring 
Cabinet members to respond to Secretariat requests, by 
removing the requirement for presidential acts to be 
coordinated with respective ministers, and giving the 
President the right to cancel Cabinet resolutions.  In 
addition, the draft law says the Cabinet "ensures" execution 
of NSDC decisions enacted by Presidential decrees.  The 
Cabinet also would no longer be able to discipline governors, 
who are presidential appointees. 
PM Response Lukewarm, but Muted 
8. (C) Tymoshenko complained on a January 13 television 
interview that Yushchenko's draft of the CabMin law would 
expand the President's power at the expense of the Cabinet. 
She said the Cabinet would review the draft and she reminded 
people that the law must correspond with the constitution. 
However, the following day she came out to say she would not 
fight for power with the President, but chose to work 
harmoniously with him.  To that end, the coalition will 
support all 12 laws listed in the coalition agreement and 
submitted  by Yushchenko, even the Presidential Secretariat's 
draft of a new CabMin law, which the PM said they had studied 
carefully.  Yatsenyuk also made a vague statement from the 
Speaker's chair on January 15 that the CabMin law had to be 
brought in line with the constitution.  Regions and Lytvyn 
Bloc MPs openly criticized the President for trying to 
consolidate power. 
KYIV 00000102  003 OF 004 
9. (C) Undaunted, Yushchenko warned Tymoshenko and Yatsenyuk 
January 15 at their weekly meeting that no changes should be 
made to the draft CabMin law, which has been initialed by 
members of both BYuT and OU-PSD.  He also then called a 
meeting of the OU-PSD Rada faction -- pulling them out of a 
Rada plenary session -- and all ministers and deputy 
ministers from the OU-PSD quota and told them they must 
coordinate their work with the Presidential Secretariat.  He 
proposed weekly meetings between the OU-PSD ministers and the 
Secretariat to be coordinated by DefMin Yekhanurov, and held 
at the Secretariat.  (Embassy Note.  Soon after taking 
office, Yekhanurov told the Ambassador that he had been named 
by Yushchenko as the "dean of the cabinet of ministers" with 
the responsibility of playing a senior role in the cabinet, 
including assisting other ministers in picking their 
deputies, because of his experience and the President's 
trust.  End note.)  Yushchenko also gave his ministers and 
MPs his list of priorities, which included amending the 
budget, improving the macroeconomic situation, and preparing 
for Euro 2012. 
Other Key Draft Laws 
10. (SBU)  Among the other draft laws recently submitted by 
the President are several aimed at clarifying roles and 
procedures that came into conflict during the spring 2007 
political crisis.  The law on the Constitutional Court 
contains some important clarifications.  It proposes to give 
the President the right to name his one third of the CC's 18 
judges without conferring with the PM or Justice Minister. 
In addition, new judges would be sworn in at a ceremony at 
the CC to which the President, PM, and Speaker would be 
invited; presumably this would avoid the situation that 
happened in 2006 when the Court was without 12 judges for ten 
months because the Rada wouldn't swear them in.  The amended 
law also clarifies that the body that nominated a judge 
(either the President, Rada, or Congress of Judges) has the 
right to dismiss that judge -- a contested point during the 
April 2007 controversy over the CC. 
11. (C) Yushchenko's draft law on the High Council of Justice 
bill seeks to limit the power of the HCJ by turning it into a 
permanent functioning body and reclassifying its members as 
civil servants.  The new law would als
o limit members to no 
more than two consecutive four year terms.  (Comment: The HCJ 
is considered a judiciary body with special status; it plays 
an important, if somewhat undefined, role in nominating and 
sanctioning judges.  In the midst of all the court-shopping 
last year during the spring political crisis, the HCJ did not 
fulfill its functions well and probably wields more power 
than it should.  End Comment.)  Yushchenko also is proposing 
to remove the Interior Ministry's internal troops from the 
ministry, rebrand them as a National Guard, and place them 
directly under his control.  This is in response to the fight 
between the President and Yanukovych Cabinet over who the MOI 
troops report to, since they sit in a Cabinet body, the 
Ministry of Interior, but their head is a presidential 
Grumbling At the Margins 
12. (C) For the most part, Tymoshenko has been very measured 
and conciliatory in her responses to Yushchenko's pushiness. 
Other than her public backing of the new CabMin law, she has 
not commented on most of Yushchenko's policy statements.  Her 
reaction to Yushchenko's appointment of Bohatyreva to run the 
NSDC -- a move many cited as part of a presidential effort to 
keep Tymoshenko in check -- was very neutral.  Instead, the 
PM has moved ahead actively with her own agenda (reftel).  In 
addition, according to Presidential foreign adviser Chaliy 
and DPM Nemyria, when the President became very upset after 
Tymoshenko was invited to attend the Davos World Economic 
Forum and he was not -- even though she had already made 
plans to attend -- she agreed that Yushchenko would attend 
instead.  However, at times her ambitions and frustrations 
have appeared through the cracks of her new external calm. 
At a January 15 press conference, Tymoshenko was asked if she 
was planning to run for President in 2009/2010.  She said 
that if they let her work unmolested as PM, then she would be 
content, but if she were constrained, she would reconsider -- 
a warning shot to a presidential team that does not want her 
to run. 
13. (C) Perhaps of greater short-term concern for Yushchenko 
is the continued grumbling of members of the his own OU-PSD 
faction and increasing tensions with the PSD wing.  OU-PSD MP 
Volodymyr Stretovych -- from PSD -- told the press that 
Yushchenko would not remove current Prosecutor General 
Medvedko, despite the fact that the coalition has registered 
KYIV 00000102  004 OF 004 
a resolution of no confidence in him, because the President 
had allegedly cut a deal with Regions to leave Medvedko in 
office.  The leading candidate for PG had been a PSD member, 
but his candidacy was not one of the seven names given to the 
press by the Presidential Secretariat.  In addition, there is 
now a fight within OU-PSD and the Presidential Secretariat 
over the announced nomination of PSD financier David Zhvaniya 
to head the Antimonopoly Committee.  There is media 
speculation that Yushchenko had demanded the withdrawal.  In 
addition, Lilia Hryhorovych -- a loyal member of People's 
Union Our Ukraine (the core party in the OU bloc) -- told us 
that the coalition was all about promoting one person -- 
Tymoshenko -- which did not sit well with her.  More 
importantly, perhaps, key confirmation votes scheduled for 
January 15 -- for Valentyn Nalyvaychenko to head the SBU, 
Vitaliy Haiduk as DPM for energy, Andriy Portnov as Head of 
the State Property Fund, and Zhvaniya -- had to be removed 
from the agenda because the coalition did not have 226 
members present.  (Note. From our spot in the diplomatic 
balcony, it seemed to be OU-PSD that was lacking participants 
with most BYuT deputies in their seats. End note.) 
14. (U) Visit Embassy Kyiv's classified website: 




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