Blue &Yellow: Politics and Economics in Ukraine

1. Foreign Policy article by David J. Kramer and Damon Wilson on the crisis in Ukraine.
2. VOA article on how the political dispute between the prime minister and president has affected economic policy.
3. President Yushchenko talks about the plummeting GDP in Ukraine. [RFE]
4. New warning about Eastern Europe's event risk. [via FT Alphaville]

A recent poll shows that Tymoshenko, Yanukovich, and Yatsenyuk are the top three choices to be the next president. Only 2.4% of Ukrainians think that Yushchenko can win a second term. No surprise from this poll, Yanukovich does well against Tymoshenko and Yatsenyuk. His benefited from the economic woes that Tymoshenko must deal with.

Meanwhile, Taras Kuzio comments on Yatsenyuk again for Radio Free Europe. The article is less critical about the ex-speaker and focuses on his possible paths to the presidency. 

The idea of a PR and BYuT coalition has been kicking around since at least last September. It’s also dismissed/denied/downplayed by the two parties. But the idea/rumor of forming a large coalition hasn't faded. Is it likely? The elections would arguably discourage the two from cooperating. The president's side is still worried about such a move.

1. The Economist on a bit of lighthearted gas crisis humor.
2. FT Alphaville post on another gas crisis in the near future between Russia and Ukraine.
3. Fears of annexing Ukraine (hat tip RA).
4. Alleged corruption at the Defense Ministry.
5. Fans meet the new and last UEFA Cup Winner.
6. Ukrainska Pravda article on Yatsenyuk.
7. Old: Kyiv Post lists the 50 richest Ukrainians, 2008 numbers.

Shakhtar becomes the first Ukrainian club to win the cup and the last club to win it. Perhaps this win can cheer up Ukrainians unahppy with the economy. 

Viktor Baloha replaced by Vera Ulyanchenko as head of the presidential secretariat. Ulyanchenko leaves her position as governor of the Kyiv Oblast, where she as been for three years. She is seen as a close ally of the president and is now also head of Our Ukraine. Baloha was a major behind the scenes player in the secretariat, but was seen as a practitioner of black PR.   One deputy from OU-PSD  has already criticized the former head's political style. Baloha said after his dismissal that the president "lacks the moral right" to be a presidential candidate. 

• If the break with the president is genuine, than perhaps he will work with Arsen Yatsenyuk?. The ex-speaker needs a good political manager; however Baloha will not be able to bring the administrative resources now that his dismissed (if the break is genuine).  

• Will Ulyanchenko's bring stability and a more civil tone to the secretariat?
  

Commenting on the Yatsenyuk post, another Taras agrees that Yatsenyuk is a political project run by Pinchuk and Firtash. I look forward to seeing where they take his career. 

The interior minister is waiting the results of a Rada investigation that will probably end with his dismissal as Interior Minister. Deputy Foreign Minister has already announced that the Germans have passed on three documents pertaining to the events. Lutsenko is on leave as the Rada investigates his actions in Frankfurt, BBC Ukraine. According to the same report the minister apologized and understands the political damaged caused by his actions. Regions and Our Ukraine both want the minister dismissed; Lutsenko has already offered his resignation. A vote on his dismissal will probably come after the investigation.  Unsurprisingly, a Lufthansa representative won't comment on the incident. 

 

Assuming he is dismissed, the Interior Ministry may find itself in a leaderless void like the Foreign and Finance Ministry. Another problem for a Government busy with the economic crisis. However, the IMF's dispute with Ukraine seems to have ended. Now the prime minister can put more attention on other issues that have yet to be resolved (Before the election season picks up).

No he doesn't. He claims that Firtash (of RusUkrEnergo fame) and Pinchuk are the financial backers of Yatsenyuk, adding that the ex-speaker doesn't appear to have a view on anything. He 

Ukraine and the IMF managed to work out their differences.Ukraine received its second installment from the IMF. Good news for Tymoshenko's government, which had spent several months trying to convince the IMF to release the money. It comes at a bad time for the prime minister as she currently faces an uproar in the Rada over the interior minister's arrest in Frankfurt. This won't get Lutsenko off the hook, but does give the prime minister something positive to talk about. 

Regions blocks the podium, insisting that Lutsenko's dismissal be dealt with. Meanwhile, the incident report has been handed to the Ukrainian side. The interior minister has already offered his resignation, but the Rada has yet to vote to accept it. 

It appears that the president's influence has won out in the court and the next election will not be held in October.  Only 8 justices (out of 17) voted for the early date, January 17 2010 is the expected new date for the presidential election. 

The four venues  for Euro 2012 have been selected. Only one of the four proposed Ukrainian venues has UEFA's approval. Kyiv is able to host games for the Euro 2012, but L'viv, Donetsk, and Kharkov have until November 30 to prove they can host the games. Odessa and Dnipropetrovsk were rejected as sites by UEFA. 

The president held a press conference where he made several comments concerning the next Rada election. Below are the most interesting remarks by him (from Den).

Update 1: Minister offers resignation,

Update 2: Rada sits and waits while the leadership decides how to deal with the current situation. 

Yuri Lutsenko, Interior Minister, has caused uproar after being held in a Frankfurt police station. The minister was drunk and kept at the station (located at Frankfurt airport) for half a day.  The president thinks that Lutsenko will resign, because of the fall out from this incident. Yuri Karmazin, MP from OU-PSD, commented that the Regions party will use the incident to its advantage. Not a surprise, though how will they benefit from this? It’s doubtful they can force early elections based solely on this incident. Perhaps they hope to have a say in Lutsenko's replacement if his resignation is accepted. 

This is not the first scandal to hit the minister; he got into a scuffle with Kyiv's mayor, Leonid Chernovetskiy. 

As the days begin ticking away toward the next presidential election (set for October), President Yushchenko states that there is no need to change the present election system (Ukrainska Pravda).  The president reminds readers that Ukraine followed a democratic path, while also reminding voters about the political changes since the Orange revolution. While Yushhenko reminds voters who probably won't be voting for him regardless of his role in 2004, others are reminding Europe about promises made to Eastern Europe. In a piece in the Wall Street Journal Former Polish President Aleksander Kwasniewski writes on Europe's duty to support the former Soviet bloc (via RA). 

The country may recieve $5 billion from Russia, on the condition $3 billion be used to spend gas while the rest can be spent as the country sees fit (DT). Russia doesn't give money away out of kindness, so the question: What does Tymoshenko give Russia? Perhaps GTS?  Or perhaps it will be used to help finance the elections this fall. 

The money has to be buying something, because Russia's economic situation may mean that the country will need to borrow from the World Bank (Bloomberg). If the Russians are going interested in borrowing it would suggest that the country is cash strapped. Granted the loan to Ukraine may not go through as Russia re-considers its needs, but its telling that its willing to spend money to curry favor with the Ukrainians. 

Foreign Policy recent piece on 10 possible crises includes Ukraine at the number 2 spot in the list. Not especially convincing argument doesn't include the upcoming elections and the election politics that will come from these two major events. 

Eurasia Daily Monitor is already reporting about the rise of radicalism in Ukraine, linking it to the election. This  increase in nationalism as a tool for mobilizing voters may lead to violent situations among the competing party factions. How much will the Rada and presidential election stabilize or destabilize Ukraine?

On April 17 in Odessa a youth from a radical leftist group calling themselves Antifa (from anti-fascists) stabbed to death Maksym Chayka, a 20-year-old Ukrainian nationalist. While the incident is now the subject of a police investigation, Antifa claims this was done in self-defense. But nationalists and their opponents have already delivered their own verdicts, judging by the far from neutral newspaper headlines reporting on "a patriot stabbed" or "a neo-Nazi stabbed" depending on the ideological sympathies of individual journalists.

The Russian media hurried to portray Ukrainian nationalists as "blood-thirsty neo-Nazis," similar to their handling of the story of Hitler dolls found on sale in a small Kyiv shop last year, which made the headlines across the world after it had whipped up interest. Reports about the alleged links between Antifa and the pro-Russian Motherland group -denied by Antifa- prompted Yushchenko to take sides (www.samozahist.org.ua, April 20). He instructed the law-enforcement agencies to find links between the Antifa "extremists" and pro-Russian groups (www.president.gov.ua, April 22). Human rights activist Volodymyr Chemerys, expressed his doubts over the investigation's impartiality because of presidential interference. He openly accused Yushchenko of sympathizing with neo-Nazis (www.samozahist.org.ua, April 24).

People's deputy Oleksandr Feldman, who chairs the Association of Ukrainian Ethno-Cultural Associations and the Kharkiv Jewish community, warned Yushchenko in an open letter on April 27 about the "fascistization" of Ukrainian society. He mentioned the tragic incident in Odessa and reports about anti-Semitic leaflets distributed in the central Ukrainian city of Cherkasy, and recalled that the "neo-Nazis" from the Freedom party won a recent election in Ternopil (EDM, March 24). Feldman drew analogies with Germany in the 1920's and 1930's, where a crisis that he compared in scale to the current Ukrainian situation, had brought Hitler to power (Delo, April 27).

Feldman's exaggeration was probably due to the fact that he is a leading member of Prime Minister Yulia Tymoshenko's party, which was unexpectedly defeated in the Ternopil election by both Freedom and Yushchenko's United Center. Tymoshenko views both Yushchenko and Freedom leader Oleg Tyahnybok as her rivals in the upcoming presidential election. All three regard as their stronghold, the nationally minded western Ukraine including Lviv where advertising on matchboxes praise the SS Galichina World War II division -noted by the Russian media and pro-Russian news outlets in Ukraine in early April.

--Ukraine Witnessing Rise of Radicalism V.6, 84

A remider that not all suffer during this crisis in Ukraine.