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September 17, 2008

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Reference ID Created Released Classification Origin
08KYIV1860 2008-09-17 15:10 2011-08-30 01:44 CONFIDENTIAL Embassy Kyiv


DE RUEHKV #1860/01 2611510
P 171510Z SEP 08

C O N F I D E N T I A L KYIV 001860 
E.O. 12958: DECL: 09/15/2018 
REF: KYIV 1804 
Classified By: Ambassador William Taylor for reasons 1.4(b,d). 
1. (C) As expected, on September 16 Rada Speaker Yatsenyuk 
announced the termination of the Orange Coalition, starting 
the 30-day clock on formation of a new coalition and, failing 
that, providing the option for President Yushchenko to call 
new elections.  With parties continuing to jockey for 
advantage, a Tymoshenko Bloc (BYuT)/Regions alliance has 
emerged as a leading coalition contender, while a return of 
the terminated BYuT/OU-PSD coalition (possibly with inclusion 
of the Lytvyn Bloc) appears less likely.  Interior Minister 
Lutsenko told Ambassador that a BYuT/Regions coalition was 
the best available option because it would provide stability 
and avoid another destabilizing round of parliamentary 
elections which would only "help Russia."  Lutsenko confessed 
he could not fathom Yushchenko's motives; Yushchenko's 
uncompromising stand was pushing the country toward new 
elections which were likely to be disastrous -- for stability 
in the country and for Yushchenko's OU.  End Summary. 
The End of the Coalition: The Rada Moves On 
2. (U) Rada Speaker Arseniy Yatsenyuk opened the Rada plenary 
session September 16 by announcing the end of the BYuT/OU-PSD 
coalition.  The announcement, widely anticipated, elicited no 
visible reaction in the chamber.  On September 17, Yatsenyuk 
announced his resignation from the Speaker's chair, saying 
that he would continue in his position until the Rules 
Committee confirmed his resignation.  Bills considered on the 
first two days of the session were non-controversial, 
including an amendment to environmental laws, and an 
amendment to the law on private notaries. 
3. (U)  MP Roman Zvarych, Our Ukraine (OU) deputy faction 
leader, issued a statement noting that if PM Tymoshenko did 
not submit her resignation, OU cabinet members were likely to 
submit their resignations independently.  Regions MP Hanna 
Herman called on Tymoshenko to follow Yatsenyuk's example and 
resign, as called for in the coalition agreement.  After the 
collapse of the coalition, Tymoshenko on September 16 
expressed hope that the current crisis would pass and her 
cabinet would continue to work "for a long time."  BYuT MP 
Kozhemyakin, speaking for the party, said that BYuT would not 
recommend Tymoshenko resign. 
Interior Minister: BYuT/Regions Offers Stability 
--------------------------------------------- --- 
4. (C) In a meeting September 16, Interior Minister and PSD 
faction leader Lutsenko told the Ambassador that, although he 
"didn't like it," he had come to the conviction that a 
BYuT-Regions Coalition was the best way, perhaps the only 
way, to achieve political stability in Ukraine at the present 
time.  Repeated elections are undermining respect for 
democracy, disrupting economic and political reforms, and 
accentuating divisions in Ukrainian society.  Lutsenko 
asserted that if there were early parliamentary elections 
this year -- on top of parliamentary elections in each of the 
last two years, and followed by presidential elections in 
late 2009/early 2010 and local elections in 2011 -- the only 
winner would be Russia.  He underlined that an expression of 
USG support for a Regions/BYuT coalition would be a helpful 
5. (C) Lutsenko lamented that Yushchenko's OU would not 
engage in discussions with BYuT to resurrect the Coalition. 
He confessed he could not understand the motivations of 
Yushchenko and Presidential Chief of Staff Baloha.  They were 
pushing Ukraine toward early elections which would not only 
be destabilizing for the country, but also likely disastrous 
for OU and Baloha's United Center party.  Lutsenko reiterated 
that constant elections were tearing Ukrainians apart. 
6. (C) A BYuT/Regions coalition may not be palatable for all 
their faction members, however.  Lutsenko speculated that up 
to 30 members of the Akhmetov grouping of Regions and up to 
30 BYuT members might balk at the pairing.  This would leave 
a BYuT/Regions coalition with a comfortable majority, but 
without the super-majority necessary to enact constitutional 
changes.  Lutsenko speculated that in a BYuT/Regions 
coalition, Tymoshenko would remain Prime Minister with Viktor 
Yanukovych as Speaker.  He remarked that Tymoshenko seeks 
power: if power rested at the Ministry of Culture, "she would 
be Culture Minister." 
7. (C) Lutsenko posited that a two-party system would be 
dangerous for Ukrainian unity, leading to a possible 
East/West split of the country.  He said Ukraine needs to 
maintain a third, center force to bind Ukraine together.  He 
said that his PSD had served as a force to bring Tymoshenko 
and Yushchenko together.  With the Orange split, PSD was 
largely a spent force.  "We will need a new force for the 
center," he observed. 
Jockeying for a Coalition -- or Early Elections 
--------------------------------------------- -- 
8. (C)  MP Ksenia Lyapina (OU) told us that to reform the 
coalition and add Lytvyn, BYuT would need to adopt OU's 
position on Georgia and Russian aggression, including a 
denunciation of the Black Sea Fleet's role, and repudiate 
their September 2 votes with Regions on laws to weaken the 
presidency.  Taking a swipe at BYuT's position, MP Zvarych 
told emboff that "Georgia is not just about Georgia - it is 
about Russian aggression," and Ukraine cannot ignore that 
fact.  Zvarych said that if no coalition forms in 30 days, he 
did not foresee Yushchenko calling new elections "on day 31," 
saying Yushchenko would wait to do so "when it is to his 
9. (C) PSD MP Kyrylo Kulikov told us that PSD is pushing for 
an OU-PSD/BYuT/Lytvyn coalition, but OU members appeared 
interested only in new elections.  He said that OU "won't 
face the reality" that they have little support and would 
suffer in new elections, and that OU and PSD had "crossed the 
Rubicon" and would not be together in future elections.  He 
speculated that PSD could try to form a new platform with 
Chairman of the Rada's Security and Defense Committee, 
Anatoliy Hrytsenko, and the Klitchko Bloc, or could move to 
join BYuT, adding that "PSD cannot make it on its own." 
10. (C) Kulikov predicted that BYuT and Regions would form a 
coalition within 30 days, avoiding early elections.  MP 
Vitaliy Homutinik (Regions) was not so confident, telling us 
that BYuT and Regions supporters are "too different."  MP 
Serhiy Sobolev (BYuT) told us not to expect a new coalition 
for at least two weeks, noting that Regions would likely 
procrastinate on any final coalition negotiations. Regions MP 
Levochkin said that should BYuT and Regions form a coalition, 
Regions would be entitled to the PM position in a new 
government based on their greater Rada numbers. 
11. (SBU) Factions are preparing for early elections even as 
coalition talks continue.  BYuT representatives say 
Tymoshenko is mobilizing MPs to get ready to campaign. 
Observers note recent opinion polls have encouraged 
Tymoshenko to take a more positive view on her election 
12. (C) Since his party had allied with Yushchenko's OU, 
Minister Lutsenko's call for a BYuT/Regions pairing is 
significant.  A BYuT-Regions pairing remains the leading 
contender at present, although there are many snags that 
could impede a deal.  Lytvyn and BYuT appeared willing to 
join with OU/PSD in a revived version of the Orange 
Coalition, but OU's adherence to preconditions have made that 
scenario less likely.  Early elections or the continuation of 
the present government without a coalition are two other 
scenarios which will emerge should coalition formulation 
fail.  The first two days of the 30-day coalition formulation 
period passed quietly, with little evident urgency to bring 
the matter to a conclusion. 




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