Ukraine’s parliament has always been all about showing off one’s riches. Female lawmakers traditionally compete who has the best Louis Vuitton and Chanel bags, while for men, watches serve as a way to indicate their place in the hierarchy. The halls of the Verkhovna Rada are no strangers to the most exclusive watches of the Swiss luxury brands Breguet and Vacheron Constantin.
But the coronavirus pandemic changed it all. Now Ukrainian lawmakers have a new attribute to indicate their status – the type of the medical mask they’re wearing: the FFP3, a mask with a higher level of protection, is the lawmakers’ new Swiss watch. The less fortunate ones wear regular surgical masks.
On March 31, parliament overcame its fear of the invisible threat of the virus and saved Ukraine from default. The Verkhovna Rada passed in the first reading a bill that makes it impossible for billionaire oligarch Ihor Kolomoisky to regain ownership of PrivatBank, which he emptied out until the state took it over, costing taxpayers $5.5 billion amid lawsuits and charges of bank fraud and insider lending. Parliament also voted to expedite the bill’s preparation for the vote — it has to be ready for it within one week, instead of two.
Besides, the Verkhovna Rada adopted the land market bill which, albeit passed in a conservative version, allows Ukraine to break with its past.
These two bills were necessary to unblock the International Monetary Fund loan of more than $8 billion.
The parliament also appointed two members of the government that are critically important today: the minister of finance, now Serhiy Marchenko, and the minister of health, Maksym Stepanov.
The effective work of the Verkhovna Rada ended the talks of a political crisis and loss of control. However, just like our society will not be the same after the coronavirus pandemic, Ukrainian politics will not be the same after this hearing. This week taught the Ukrainian political system a few lessons.
The first and most important takeaway is this: Ukraine managed to stop a scenario leading to a default. A group of lawmakers who are seen as associated with Kolomoisky actively lobbied this path. Interior Minister Arsen Avakov backed it by saying that Ukraine should “immediately restructure” its foreign debt, which equals a default.
The financial markets reacted immediately to the Kolomoisky-Avakov loss: the hryvnia gained 2% of value in one day, while the National Bank of Ukraine, for the first time since the pandemic started, was buying dollars and not selling them. Apart from the IMF money, Ukraine expects aid from the World Bank and the European Union, and separately, assistance from Azerbaijan.
The second lesson: President Volodymyr Zelensky proved his independence from Kolomoisky. Ukraine’s foreign partners have been demanding proof that he is free of any liabilities to Kolomoisky, who supported him during the campaign. The banking bill was proof.
And even though at some point the Presidential Office thought that they could do without the IMF loan, the global financial crisis and the coronavirus pandemic stripped them of these illusions.
The banking bill that makes it impossible to return the PrivatBank to Kolomoisky is only one of the instances where the interests of the oligarch clash with the interests of the state. It is also important to replace the head of the state-owned energy company Centrenergo, a person loyal to Kolomoisky. Former Prime Minister Oleksiy Honcharuk tried to do it but was replaced before he could finish. Also, there have been rumors that Kolomoisky is gaining influence at another strategically important state company, the Odesa Port Plant.
The third lesson is this: All decisions need to be made in a timely manner. Losing time is losing an opportunity. The parliament could have passed the banking bill in November when it was in the “turbo mode” and the president’s party, Servant of the People, was a unified mono-coalition. There would have been no rush, and the IMF money would have been in the central bank’s reserves already.
Instead, there had been an attempt to develop a version of the banking bill that would have been a compromise with Kolomoisky. This bill was sent to the IMF for approval. But when they checked the text file’s data, they saw that the file was created on a computer used by Oleksandr Dubinsky, Kolomoisky’s minion in parliament. This undermined the IMF’s trust in the bill. The matter was postponed for several months.
The fourth lesson is this: The Servant of the People faction is capable of rebelling against the appointments they don’t approve. Moreover, trying to pressure them into voting for such appointments is counterproductive. This week brought a precedent: For the first time, the “mono-coalition” refused to vote to appoint a minister who was vetted by the President’s Office. The candidate was Olga Buslavets, whom Zelensky’s office wanted to appoint as the energy minister. Her loyalty to billionaire Rinat Akhmetov wasn’t met warmly inside the faction, and Zelensky had to withdraw her candidacy.
The fifth lesson is the further fragmentation within the Servant of the People and the president’s willingness to seek votes even among ideological opponents. One-fifth of the 248-member faction of the Servant of the People didn’t support the bills on the land market and banks. The deficit was covered by ex-President Petro Poroshenko’s 27-member European Solidarity faction and the 20-member Voice faction. The pro-Russian faction of the Opposition Platform For Life (44 seats) voted to appoint Stepanov as a health minister.
The only faction that did not vote this week for any of these key decisions was the party of Yulia Tymoshenko (24 seats). Just recently she said that this crisis was no time to be in the opposition, but then five of her lawmakers registered five claims to repeal the law on the land market, blocking its signing. At the same time, Tymoshenko publicly opposed the banking bill that would secure PrivatBank from returning to Kolomoisky. She claimed that Ukraine was turning into a “banana republic” and at the same time promised that “there will be no default in Ukraine because creditors will not allow it.”
This way, Tymoshenko exposed her open support of Kolomoisky — similarly to how she once publicly supported ex-lawmaker Oleksandr Onyshchenko who is a suspect in a large-scale corruption case.
The sixth takeaway: The fragmentation of the Servant of the People into separate influence groups is no longer secret, but is now taking place in plain view.
For a long time, the lawmakers loyal to the alliance of Kolomoisky and Avakov have been the most visible group inside the faction, dominating TV air and online platforms. Now there is a group opposing them: a Democratic Platform, a group of some 60 lawmakers within the Servant of the People faction. First, they criticized the attempts to turn the Russian war in eastern Ukraine into an “internal conflict.” Now they are opposing the scenario of a default that would benefit Kolomoisky.
The paradox is that some of the “servants of the people” from the group loyal to Kolomoisky and Avakov are much closer to Medvedchuk than to the rest of the faction. And those who formed the Democratic Platform group are closer to the “Voice” in their ideology than to the other “servants of the people.” And the only thing that keeps these people together is Zelensky. Obviously, after the end of his presidential term, the Servant of the People will fall apart into several parties. But already this fragmentation has led to the fact that the presidential party needs help from other factions’ to pass bills.
There are several important conclusions from this situation in the Ukrainian parliament.
It signifies the end of the era of political romanticism of Zelensky and the entry into the phase of pragmatism or opportunism — whatever one may prefer to call it. The “turbo mode” is over, the executive branch is almost reset, having cleared itself of the first convocation of the government. The big shake-up of the Ukrainian authorities that occurred in the last month after the departure of Andriy Bohdan as Zelensky’s chief of staff and Honcharuk as prime minister is completed.
From now on, an official’s previous work has no impact on their chances to be appointed to a high-level position. Past work for Poroshenko or support received from the pro-Russian member of parliament Viktor Medvedchuk doesn’t bear any negative connotation anymore. The President’s Office has decided to abandon the form for the sake of the content.
Time flies. One year has passed since Zelensky’s victory in the first round of the presidential election. It means that one-fifth of his presidential term is over. When he leaves the office, the assessments of his work will have little to do with the ministers or lawmakers who worked for him. Most of their names won’t be remembered at all. What will matter in the long run is the result of the work, the result that will be associated with one name only: Zelensky.
Sergii Leshchenko is a Kyiv Post columnist, investigative journalist and former member of the Verkhovna Rada.
