"If my mission is ineffective here, let someone else carry it out".
Prime Minister Viktor Yushchenko hinted that his days leading the government might be numbered after President Leonid Kuchma made it clear he supported Yushchenko’s enemies in the ongoing war for control of Ukraine’s energy sector.
“The issue of honor is at stake, and I am ready to take such steps as my official position and by my sense of dignity dictate,” Yushchenko told a press conference in parliament on Nov. 2.
A day earlier an ad hoc commission led by national security chief Yevhen Marchuk issued a report accusing Yushchenko of lying about the effectiveness of government-led energy reforms.
The report was the second blow in as many days to the Yushchenko government. On Nov. 1, the Kuchma administration had published a presidential decree removing the influential National Electricity Regulation Commission (NERC) from government control and placing it under the direct control of the president.
Marchuk’s report accused the Yushchenko government of using “artificial means” to inflate the reported level of cash payments being made in the energy sector.
Yushchenko and his controversial deputy prime minister in charge of the energy sector, Yulia Tymoshenko, have touted those increased cash payments as proof that the government’s efforts to eliminate shady barter transactions in the sector are working.
Marchuk, who heads the powerful National Security and Defense Council, lambasted Yushchenko on national television the day he released his commissions’ findings, hinting that changes in the government were necessary.
Yushchenko reacted angrily the next day: “I will not allow my government to be raped,” the prime minister said.
“If my mission is ineffective here, let someone else carry it out. There is a limit to my biological capabilities,” he added.
Yushchenko received another blow Nov. 3 when Kuchma publicly endorsed the findings of Marchuk’s commission.
But asked on Nov. 7 whether Yushchenko would step down, a spokeswoman for the prime minister said, “He is still coming to work.”
Tymoshenko, meanwhile, defended her reforms in an interview with TV station STB on Nov. 3.
“[Marchuk’s] report was created to discredit the government, to destroy people’s positive attitude toward the government,” Tymoshenko said.
She later invited Marchuk to debate energy issues live on national television, but Marchuk declined, citing prior engagements.
Marchuk, an ex-KGB general, is one of a group of powerful pro-presidential parliament deputies who have consistently attacked the Yushchenko government reforms.
The group, which in addition to Marchuk includes well-heeled deputy-businessman Hryhory Surkis, former President Leonid Kravchuk and first deputy Rada Speaker Viktor Medvedchuk, controls much of Ukraine’s electronic and print media. The group’s members are thought to have business interests in the energy sector.
Government supporters allege that this group has orchestrated attacks on Yushchenko and Tymoshenko to protect those interests in the power sector against Tymoshenko’s reforms.
Kuchma ordered Marchuk to investigate the reforms last month after the State Tax Administration had complained that Tymoshenko was overstating the level of cash payments in the energy sector. The STA specifically claimed that energy companies were using a payment method known as offsets to create the false impression that barter transactions were down and transparency up in the sector.
The Cabinet in July passed five resolutions allowing certain state companies to increase the use of offsets, or debt-swaps. Shortly after, Tymoshenko instructed regional energy distributors (oblenergos) to accelerate offsets to erase their large debts to energy-generating companies.
Tymoshenko has boasted that the level of cash payments from regional energy distributors (oblenergos) to power generators has increased from about 10 percent last year to about 70 percent currently.
But ever since Tymoshenko first announced that figure in September, her critics have been seeking ways to undermine her.
Last week, Ihor Pluzhnykov, the former chairman of state savings bank Oshchad Bank and a political ally of Marchuk and Kuchma, publicly accused Yushchenko of using Oshchad Bank to finance questionable programs in the energy sector.
Critics had previously accused Yushchenko of transferring the energy companies’ debt over to the Oschad Bank, which is controlled by the Cabinet, in order to create the false impression that energy sector debts were on the decline.
Oshchad Bank is the bank through which the NERC, which regulates money transfers between the various players in the energy market, clears payments.
Kuchma’s move to wrest control of the NERC away from the Cabinet was seen by analysts as a move to check the considerable autonomy enjoyed by the Yushchenko government in enacting energy reforms.
But most analysts predict Kuchma won’t take the next step and sack his prime minister because it would likely shatter the Rada’s fragile pro-presidential majority.
Sacking Yushchenko would also unsettle Ukraine’s Euro-Atlantic financial benefactors, from whom Ukraine hopes to draw loans later this year.
Nonetheless, the prime minister’s status is increasingly shaky, according to Mykola Pohrebinsky of the Kyiv-based Institute for Conflict Studies.
“Yushchenko’s position sounds like this: ‘I, in principle, am ready to resign because they do not trust me.'”
