Publication: Monitor Volume: 7 Issue: 19

Coalition government has recently become a buzzword in Ukraine’s corridors of power. Pro-presidential oligarchic factions from the center-right majority in the Verkhovna Rada (parliament) have asked Premier Viktor Yushchenko to include representatives from majority factions in the cabinet of ministers. They argue that if this is not done, the majority, which backs Yushchenko’s cabinet, may break up, and that Yushchenko would not survive what would subsequently almost certainly prove a constitutional crisis. In reality, the majority is already dissolving. The dismissal of Yulia Tymoshenko as deputy premier for energy and the ongoing audio tape scandal–which implicates a number of top officials (President Leonid Kuchma among them) in illegal activities–have shaken the fragile political concord worked out among the various non-Red factions in parliament (see the Monitor, December 13, 2000, January 23).

What these factions really want is to bring their people into the cabinet and impose their rules of the game on Yushchenko. During the course of the market reforms Yushchenko implemented this past year, the oligarchs lost some of their influence in the lucrative heavy industry. Neither did they benefit from privatization as much as they had expected. As businessmen-politicians, they want to regain their clout and take advantage of the current political uncertainties. And they have their eyes on more than the energy post Tymoshenko just vacated. It is rumored that Yushchenko would like to get rid of Fuel and Energy Minister Serhy Yermilov, who opposes coal industry reforms, and that he is not altogether satisfied with Finance Minister Ihor Mityukov.

On January 17 the majority leaders met with Yushchenko in a closed-door session to discuss the prospects of a broad government coalition. The talks apparently went nowhere. Rada Speaker Ivan Plyushch said only, and vaguely, that Yushchenko “never refused to have such consultations” and that he was “ready to hear proposals from faction leaders.” Then, on January 25, and to the apparent disappointment of the oligarchic factions, Yushchenko appointed Oleg Dubyna as deputy premier. Dubyna was a generally apolitical steel industry manager and the former director of Ukraine’s largest steel mill, Kryvorizhstal.

Yushchenko’s calmness provoked a demarche of the second-largest Rada faction, Labor Ukraine (LU). This group represents the interests of various well-connected businessmen–among them, Andry Derkach, the son of the security service chief; Viktor Pinchuk, a steel magnate close to President Leonid Kuchma’s family; and Ihor Sharov, a former gas trader. LU leader Serhy Tyhypko threatened to initiate no-confidence vote against Yushchenko if Yushchenko does not agree to a coalition government. Tyhypko, formerly the economics minister, resigned from Yushchenko’s cabinet last summer over differences in personnel policy. If it comes to a no-confidence vote, LU could well find support from the United Social Democrats and Regional Revival–two strong oligarchic factions, whose interests Yushchenko ignored when he formed his cabinet a year ago.

During a January 26 interview, Yushchenko said that he was not, in principle, against the idea of a coalition. But, he argued, “a political coalition should be formed not in the government, but in parliament.” He said further that he would not resign as long as the parliament and the president have trust in him.

Ukraine’s constitution gives the president the last word in the formulation of the government. But Kuchma has as yet said nothing regarding the debate between the oligarchic factions and Yushchenko. The fate of the cabinet may come into question. If Kuchma sides with the oligarchs, it may be hard for Yushchenko to continue his reforms. If Kuchma refuses to pick sides, Yushchenko will probably continue ignoring the calls for a coalition government. If he does this, however, his relations with the pro-presidential factions will deteriorate even further. The Rada could decide to block important economic legislation and provoke a new information war against Yushchenko by the numerous media under the oligarchs’ control (STB TV, January 17, 26; Ukrainska pravda, January 25; New Channel TV, January 26).