The eleven-party parliamentary coalition assembled by newly re-elected President Leonid Kuchma survived its first test. With the left-wing representatives boycotting the votes, the parliament ousted its left-wing speaker, Oleksandr Tkachenko, and installed in his place Ivan Plyushch, a center-right figure who had served as speaker in 1991-1994. The left-wing minority refuses to accept the results and may boycott the parliament indefinitely. A national referendum scheduled for April 16 is set to consider whether to dissolve the parliament and hold new elections, but if the coalition holds and can function, President Kuchma may pull that question from the ballot.

Besides the challenge from the left, the new government must deal with attacks from former Prime Minister Pavlo Lazarenko. Lazarenko, arrested in Switzerland on charges of money laundering, returned to Ukraine on bail, then fled when the parliament revoked his immunity. He ended up in the United States, where the Immigration and Naturalization Service is investigating his claim that he is a political refugee who deserves asylum.

Lazarenko reportedly told investigators that in December 1997 the National Bank of Ukraine, the country’s central bank, illegally invested a $613 million loan from the IMF in speculative bonds, turned a $200 million profit and put part of that money into President Kuchma’s 1999 election campaign. The man who was president of the National Bank at that time is Viktor Yushchenko, whom Kuchma has just named prime minister.

The story is extremely convenient for Lazarenko, but that does not make it false. President Kuchma has asked PricewaterhouseCoopers, the accounting firm that reviewed the handling of IMF loans by the Russian Central Bank, to conduct an audit of the NBU.

So far, Lazarenko’s charges have not affected IMF-brokered negotiations on the restructuring of Ukraine’s external debt to commercial lenders. Those negotiations are close to a deal that would swap $2 billion in debt due in 2000 and 2001 for new government securities that would have a seven-year maturity, a 10-percent coupon, and a two-year grace period on repayment of principal. If the deal goes through, the new securities are expected to trade at a 40 percent discount. If the deal does not go through, Ukraine faces foreign-debt service this year alone of $3.1 billion, more than double the country’s hard currency reserves.