You're reading: Shaky new coalition faces deepening economy crisis

Ukraine’s parliament elected Volodymyr Lytvyn its speaker in a surprise vote on Dec. 9, paving the way to adopting crucial legislation to combat the deepening economic crisis and pass the 2009 state budget.

A new governing coalition comprised of three parliament factions was also announced, but analysts are skeptical about its staying power. Analysts also doubt that the latest developments signal an end to the bitter standoff between President Victor Yushchenko and his former Orange Revolution ally, Prime Minister Yulia Tymoshenko. Their relations have severely soured as both prepare to square off for the presidency in the 2010 election.

Lytvyn’s elevation and the coalition deal boost Tymoshenko’s chances of hanging on as premier amid attempts by Yushchenko to hold pre-term elections. While Lytvyn’s candidacy mustered 244 votes in the 450-seat legislature, less than a majority of lawmakers within the three coalition members actually voted for his candidacy. Thus, the new speaker and his role as a co-leader of a coalition comprised of Tymoshenko’s bloc, the presidential Our Ukraine group and Lytvyn’s own bloc, are clouded.

“A simple calculation reveals the effective number of votes in the new coalition is just 216 votes, which is below the 226 votes that are necessary to adopt any measures… the new balance will again be quite vague. Thus there is a high risk that the new coalition will collapse quite soon. In addition, the parties have not disclosed any coalition agreements,” according to a Dec. 10 report by the Kyiv office of ING bank.

Only 40 of 72 legislators from the Our Ukraine bloc supported Lytvyn, signaling a clear split in the pro-presidential parliamentary faction. Yushchenko is said to have opposed his party’s revival of a coalition with Tymoshenko, favoring either new elections or an alliance with the Party of Regions, led by his Orange Revolution arch-rival, the Moscow-leaning Victor Yanukovych.

The necessary votes to ensure Lytvyn’s victory were provided by the communists. The communists, however, indicated that they will not join the coalition and only supported Lytvyn in order to get parliament working again. The coalition agreement has yet to be signed by the three political blocs. If they proceed, a new government would have to be formed within one month, otherwise Yushchenko would once again gain the right to dissolve parliament.

Analysts touted the speaker’s election and coalition announcement as brilliant tactical victories for Tymoshenko in her feud with Yushchenko, who was visiting Lithuania during the vote.

Oles Doniy, one of 40 legislators from the presidential faction who voted in support of Lytvyn, told the UNIAN news agency that, at a Dec. 8 meeting with Our Ukraine, Yushchenko completely rejected the idea of the newly-formed coalition and “proposed we create a coalition – only not with” Tymoshenko’s bloc.

But the day after Lytvyn was elected, Yushchenko congratulated him and described him as “an experienced and balanced politician.”

Lytvyn, 52, headed parliament from 2002 to 2006 after having earlier headed ex-President Leonid Kuchma’s administration. Lytvyn has positioned himself as the only person who can make peace between the country’s feuding leaders, campaigning on the slogan “Ukraine needs Lytvyn!”

After being voted in as speaker, Lytvyn on Dec. 9 said his task will be to ensure parliament works effectively, and “most importantly, achieves results.” Yushchenko called on legislators to waste no time in adopting anti-crisis law and a 2009 state budget.

“If Yushchenko supports the new coalition, [it won’t] need communists to secure a majority and will at least be able to approve further anti-crisis laws as they all agree stopping Ukraine’s economic decline is a top priority now,” commented Dmytro Tarabakin of Dragon Capital.

Supporting the coalition will “enable Yushchenko to avoid the risk of [his political bloc] being dismissed from the government in early elections…Tymoshenko will retain her platform from which to orchestrate her bid for the presidency, while Yushchenko has bought some time to buoy his flagging popularity,” according to Ali Al-Eyd from Citigroup.

On Dec. 10, Tymoshenko hinted that changes to the make up of her cabinet are in the works.