To recap, earlier in February, and after the resignation of a number of reform ministers, the incumbent prime minister, Arseniy Yatsenyuk, survived a no-confidence motion, but then subsequently suffered the departure of key coalition partners (Self-Reliance), which in effect meant that his administration no longer had a working majority in parliament, the Rada.
Under existing rules, having survived one no-confidence motion his administration cannot have a further no confidence motion tabled until September. In effect, Yatsenyuk remains as prime minister, until some other candidate can secure majority backing in the Rada – but it’s a bit more complicated than that, as even if another candidate secures a majority, Yatsenyuk has then to be persuaded to step down.
Also the fact that Yatsenyuk still controls 81 deputies in the Verkhovna Rada through his People’s Front faction, and any new coalition will likely require his party’s backing, suggests that the incumbent has significant leverage still – if he is going to be persuaded to step down, then presumably some significant role has to be found for Yatsenyuk.
At the moment Yatsenyuk seems to be biding his time – keeping his powder dry and waiting to see what political concessions are made to him.
Reformers have called for a technocratic cabinet to be formed – with Natalie Jaresko the incumbent minister of finance even offering herself up as a potential leader of such a cabinet.
However, it seems that entrenched vested interests amongst oligarchic and political groups blocked such a move – presumably fearful of where such reforms would lead, i.e. they might actually be successful, to the detriment of these same vested interests. It seems that Jaresko lacked sufficient backing in the Rada to secure a majority, and hence she seems to have stepped aside.
So up popped Volodymyr Groysman, the speaker of the Rada, and a member of President Petro Poroshenko’s Solidarity party (138 seats in the Rada), nominated as prime minister to replace Yatsenyuk.
Initially it had appeared as though Groysman could win majority backing in the Rada, as now opposition parties (they had been in the pro-European Union reform coalition after the 2014 parliamentary elections, before subsequently withdrawing) with a score or so deputies each, including Yulia Tymoshenko’s Batkivshchyna (Fatherland) Party and Oleh Lyashko’s Popular Party, both indicated that they might be inclined to support Groysman.
Indications also came that members of the Opposition Party (former members of ex-President Viktor Yanukovych’s Party of Regions) might also support Hroisman. But then Tymoshenko began to extend conditions for her support – including rowing back from energy sector reforms which have been central to the International Monetary Fund program.
Given the IMF program still remains key to ensuring macro-stability, it seems difficult to see how Groysman could accept the latter condition for ensuring Tymoshenko’s support.
Tymoshenko is currently performing well in opinion polls and has an eye on the next presidential elections due in 2019 (albeit there is now talk of bringing these forward) and would likely favor early elections which could well see her return to power – the price for Tymoshenko agreeing a delay and backing a new Groysman government would surely be to extract such concessions from Poroshenko and Groysman to ensure their inevitable failure.
Oleh Lyashko’s Radical Party is expected to demand concessions over the Minsk peace process – in support of the nationalist cause – which would make Minsk II implementation that much more difficult, and potentially also straining relations with Western governments.
Groysman is close to Poroshenko, having picked up the baton from Poroshenko as mayor of Vinnytsia, a hub for the president’s chocolate empire.
Poroshenko had originally wanted Groysman as prime minister, after the parliamentary elections in October 2014, but after the surprisingly strong showing of Yatsenyuk’s Peoples’ Party at those elections, Poroshenko was forced to go into coalition with Yatsenyuk, heading a broad pro-EU reform coalition also with Tymoshenko, Lyashko and Adriy Sadoviy’s Self-Help.
At that time with Groysman as prime minister, Poroshenko would have had stronger control over the state administration – albeit the buck would then have squarely fallen on Poroshenko and his team (Groysman).
In the end, Yatsentuk’s tenure as prime minister was seen as useful to Poroshenko, as it allowed him to deflect some of the blame for unpopular reform policies, and/or ineffective implementation of these same policies on the prime minister he did not chose.
Both sides have tended to blame the other for policy inaction and failed/poor implementation. But the result has been that both Poroshenko and Yatsenyuk have politically failed as reflected in the collapse of their poll ratings – Yatsenyuk’s party might now fail to secure parliamentary representation in early elections, while Solidarity could see its seat tally collapse.
Poroshenko’s newfound willingness to challenge Yatsenyuk, by nominating Groysman to replace him, might reflect a range of factors.
Either it might reflect frustration with the course of policy under Yatsenyuk – and realisation given Poroshenko’s own lowly poll ratings now that he needs to assume greater control over the executive to ensure policy outcomes which still leaves him with a hope of securing re-election in 2019.
The worrying precedent therein for Poroshenko would be the example of President Viktor Yushchenko, who “ruled” over bitter infighting within his government after the Orange Revolution in 2004, including, Tymoshenko, Poroshenko and even Yanukovych, but ended with Yushchenko’s poll ratings dropping to low single digits at the 2010 presidential elections (subsequently won by Yanukovych in a run-off vote against Tymoshenko).
The move now to replace Yatsenyuk might also just be a half-hearted sop to criticism from Western creditors and others (including those resigning reform ministers) that the Yatsenyuk government is not doing enough to drive through radical reform – particularly in the area of rule of law.
Poroshenko might thus just be going through the motions in trying to replace Yatsenyuk – secretly quite happy in maintaining the status quo, and in any event eager to avoid early elections and inevitable defeat therein.
Another variant is that faced by serious pressure now for reforms which address rule of law-related issues, Poroshenko might be looking for a broader reformulation of the ruling coalition, perhaps including members of the former Yanukovych regime – members of the Opposition Party – which can perhaps being opportunities for compromises over Donbas, with Russia, and over Minsk II implementation, which the West might just buy into if it helps “normalise” relations with Russia, but the price of which would be a step back in rule of law-related issues, which pose near and present dangers to established elites and oligarchic vested interests in Ukraine.
It might be argued that these same elites would rather like a return to the status quo – pre-Euromaidan Revolution, minus perhaps the personality of Viktor Yanukovych.
Latest indications now are that Groysman is trying to lure a number of independents, and members of other parties to join Solidarity and to secure a majority of 226-seats in the Rada, with the support of Yatseniuk’s Peoples’ Party.
This might just work in getting him over the threshold of a majority, as party discipline in Ukraine is traditionally very weak in Ukraine for Rada deputies – with a long track record of cash for votes. But by the same logic, it might be then difficult for Groysman to rule with only a slim majority – Solidarity and the Peoples’ Front might also suffer defections, and a Hroisman cabinet might only be able to sustain a situational majority, bill by bill, albeit that is currently the case with Yatseniuk in effect.
Likely outcomes?
I still think early elections (this year at least) are a low probability at this stage (10-20% probability outcome) – as neither Poroshenko, nor Yatsenyuk or their parties want them at this stage, while international creditors are also likely to be set against. That said, it is a tough call at this stage whether Groysman manages to secure the 226-Rada deputies to demonstrate a majority, sufficient to move Yatseniuk aside. If Hroisman fails then this would leave either a weak Yatseniuk “acting” administration, subject to drift, and weak policy implementation, until perhaps the next no confidence motion can be tabled for September, or some new attempt to forge a majority administration from another political figure.
It is difficult to see the IMF program being brought back on track, with disbursements, until Ukraine actually has a new majority ruling coalition re-affirmed. Not sure if Yatseniuk can rule in a minority capacity, passing legislation, in compliance with the IMF program on a case-by-case basis – I doubt it.
I think foreign creditors will then likely use the carrot of Western financing (or the lack of it) to try and knocks heads together amongst Ukrainian political elites to encourage them to work together. That said, the experience, post the Orange Revolution, and now post-EuroMaidan Revolution is not very encouraging. Obviously, drift over forming a new coalition government, and the policy paralysis that this risks, leaves Ukraine open to more populist forces, and perhaps continued foreign manipulation.
Net-net, confusing – but remember, we have been there many times before in Ukrainian post-independence history – remember the war of laws from the mid-1990s under former President Leonid Kuchma, then with the aftermath of the Orange Revolution in 2004. Ukraine hence has “form”, and the Euromaydan failed to clear out Ukraine’s political and business elites.
Note that if Groysman does win majority backing in the Rada, it seems he will line his cabinet with a few foreign names – Ivan Miklos, the former Slovak tax reforming prime minister has been named as a possible finance minister to replace Jaresko (who unless Yatsenyuk stays as prime minister, or she ends up as prime minister, seems likely to bow out).
Whether this will be just paying lip service to reform is open to question – and events around the PGO’s office this week, with Shokin finally being removed, but only after taking down the most prominent reformers with him, is hardly encouraging.
Whether the West will be willing to put rule of law related reforms on the back burner, in exchange for compromises with Russia and over Donbas, is open to question. The West at the moment seems to be fighting so many fires, including Brexit, the rise of Trump, risks to Merkel, refugees, Turkey/Syria policy, et al, that it might just want short term fixes in terms of an easing of tensions with Russia, at almost any cost at this stage.
All very sad, given the real optimism of significant and meaningful change which followed the EuromMidan. My sense is that the Orange and EuroMaidan revolutions in Ukraine may not be the last.
