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December 19, 2008

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Reference ID Created Released Classification Origin
08KYIV2486 2008-12-19 12:52 2011-08-30 01:44 CONFIDENTIAL Embassy Kyiv


DE RUEHKV #2486/01 3541252
P 191252Z DEC 08

C O N F I D E N T I A L KYIV 002486 
E.O. 12958: DECL: 12/19/2018 
Classified By: Ambassador William Taylor for reasons 1.4 (b,d). 
1. (C) The new Rada coalition is a small step in the right 
direction toward greater political stability in Ukraine. 
Based on discussions with coalition members, it appears the 
grouping is likely to continue Prime Minister Tymoshenko's 
broadly pro-Western policies and would be more amenable to US 
interests than would have been expected from a coalition that 
included the more Russia-leaning Party of Regions.  In the 
short-term the coalition will focus on Ukraine's rapidly 
deteriorating economy and the 2009 budget.  President 
Yushchenko and other coalition opponents retain some options 
to try to force new elections, or a change of government, but 
the coalition expresses confidence in its stability.  End 
2. (C) Hailed by Prime Minister Tymoshenko as "the end of the 
political crisis", the new coalition formed by Tymoshenko's 
BYuT, Our Ukraine-People's Self Defense (OU-PSD), and Rada 
speaker Volodomyr Lytvyn's bloc will likely continue to 
follow her broadly pro-Western policies and pragmatic 
approach to foreign policy.  The coalition was formed less on 
a common policy platform than on political expediency and 
self-preservation instincts of BYuT and OU-PSD MPs, who 
believe Yushchenko's time has passed.  OU-PSD MP, and early 
supporter of the coalition, Mykola Katerynchuk told us that 
he supports many of Yushchenko's positions, but believes that 
the President has lost his way.  Katerynchuk said that the 
future of his European Party would be in jeopardy if he 
continued to ally with Yushchenko. 
3. (C) Tymoshenko's positions supporting Ukraine's continued 
Western integration, with an emphasis on the European Union, 
and eventual NATO membership - after a national referendum - 
are broadly acceptable to OU-PSD members. Furthermore, the 
coalition is strongly united by its shared opposition to any 
changes to the constitution before the December 27, 2009 
presidential election and to early parliamentary elections. 
4. (C) The coalition appears strong enough to weather the 
political challenges being leveled by Yushchenko supporters 
and Party of Regions, however it has yet to articulate a 
vision for solving Ukraine's big picture challenges.  The 
actual agreement to form a "Coalition of National 
Development, Stability, and Order" appears to be a collection 
of campaign slogans about overcoming the economic crisis and 
making social guarantees, rather than a description of shared 
political vision or purpose, and it lacks any specifics on 
how any of its slogans will be accomplished.  Ironically, 
anecdotal discussions with average Ukrainians seem to 
indicate that Yushchenko's continued opposition bolsters 
support for the coalition, rather than weakening it. 
5.  (C) For the immediate moment, the coalition must focus 
urgently on legislative efforts to combat the current crisis. 
 Not surprisingly, Speaker Lytvyn announced that the 
near-term Rada agenda would focus on shoring up Ukraine's 
economy and passing a 2009 budget.  The coalition is likely 
to try to limit unpopular cuts in social expenditures, 
particularly given Tymoshenko's aspirations in next year's 
presidential elections and promises she has already made to 
address the effects of the economic crisis. 
6. (C) Analysts expect changes in the current composition of 
the Cabinet, but with little effect on overall government 
policy.  Coalition contacts told us that Yushchenko loyalists 
in the Cabinet are likely to be replaced.  There is also 
widespread speculation that the Finance Minister and Economic 
Minister, BYuT members both, will be replaced over their 
handling of the economic crisis, but perhaps not before the 
crisis deepens and one or the other could be used as a 
scapegoat.  Pro-coalition OU-PSD MP Volodymyr Ariev told us 
that his People's Self-Defense group was pushing hard for the 
Justice Minister's position, and was eyeing the Ministry of 
Culture. Political prognosticators say that the Transport 
Minister, as well as the heads of the State Property Fund, 
State Tax Administration, and State Customs Committee are 
also likely to go to make room for Lytvyn loyalists and other 
new faces.  Foreign Minister Ohryzko's and Defense Minister 
Yekhanurov's jobs are considered safe because their positions 
are nominated by the president. 
7. (C) PM Tymoshenko said that the creation of the new 
coalition marked the end of Ukraine's political crisis, and 
Speaker Lytvyn has said that he will "not allow" the Rada to 
be destabilized.  Coalition opponents, however, could 
consider a number of challenges to the coalition and 
Tymoshenko's government, including: 
- A coalition needs 226 MPs:  Coalition opponents argue that, 
in order to be legitimate, a coalition agreement must bear 
the signatures of the 226 MPs that support it.  The new 
coalition currently has a minority 212 MPs signed
including 155 BYuT, 20 Lytvyn bloc, and 37 OU-PSD.  However, 
a Constitutional Court ruling in September 2008 clarified 
Article 83.6 of the Constitution, governing coalition 
formation, stating that coalitions are made up of factions, 
not individuals.  Therefore, coalition supporters counter 
that this ruling allows for a faction majority (in this case 
37 of 72 OU-PSD MPs) to commit the entire faction to a 
coalition.  Therefore, the coalition would represent the 
entirety of the three coalition factions, for a total of 248 
MPs.  Based on its interpretation of the Court ruling, BYuT 
is confident that the coalition can prevail in any court 
- Presidential dissolution decree:  Based on the same 
argument that the coalition is not legitimate because it 
lacks 226 signatories, Yushchenko could reissue his October 
2008 decree dissolving the Rada and calling snap elections. 
BYuT's confidence in its ability to win any court challenge 
extends to fighting a possible new Yushchenko decree. 
- No confidence vote:  226 votes would be needed to win a 
no-confidence measure, forcing Tymoshenko's resignation and 
the resignation of the Cabinet of Ministers. While a threat 
to Tymoshenko's government, a similar no-confidence effort 
failed in July 2008 when the Communists did not support it. 
Even if 175 Regions MPs and 35 non-coalition OU-PSD MPs 
supported such a move, an unlikely prospect, they would need 
to attract 16 Communists to their side.  With the Communists 
voting with the coalition on most issues since Speaker 
Lytvyn's December 9 election and their failure to support a 
similar move last summer, such a scenario appears unlikely. 
- Mass MP resignation:  The Rada must have at least 300 MPs 
to maintain its authority.  Presidential Chief of Staff 
Viktor Baloha is rumored to be lobbying Yushchenko allies and 
Regions MPs to resign their Rada mandate to force new 
elections.  BYuT and pro-Yushchenko allies did the same in 
2007 to help force the September 2007 Rada elections. 
Political analyst Taras Kuzio told us that Baloha is on a 
"fool's errand" as MPs are unlikely to give up their seats 
voluntarily.  Pro-Yushchenko OU-PSD MPs fear they won't 
overcome the 3% parliamentary threshold in snap elections and 
a sizable number of Regions MPs fear they will be left off 
their next party list. An amendment to the rules on party 
list annulment after the 2007 mass resignation stipulates 
that any vacant seat may be filled by the next member on the 
party list. It would take some party discipline to keep 
interested party members waiting on the list from filling 
seats vacated by resigning MPs.  BYuT MP Ostap Semarak 
dismissed any effort at mass resignations as "a joke." 
8. (C)  The new coalition may provide a measure of stability 
in Ukrainian politics during the ongoing economic crisis and 
in the lead up to the December 2009 presidential election. 
Politics remains personal in Ukraine, however, driven by 
personal relationships, public slights, and intersecting 
economic interests.  There is no ideological map to guide 
political predictions.  One thing seems relatively clear: 
Tymoshenko has gotten the political better of Yushchenko, for 
now; even his erstwhile allies have begun to write his 
political obituary.  The challenges facing the new coalition 
are daunting, however, and the mettle of the new coalition 
will be tested by the deepening economic crisis. 




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