Blue &Yellow: Politics and Economics in Ukraine

According to a Ukrainian diplomatic source, Solovyev continues, Moscow has prepared “a whole list of concrete steps which the new powers that be in Kyiv could undertake as a sign of the renewal of the former friendship between the fraternal peoples.” Moscow “would like,” the source continued, to see Ukraine’s security services drop its relations with the American CIA.

In addition, Moscow would like to “renew the work of the Russian FSB office in the Black Sea Fleet, the officers of which [Yushchenko] had required to quit Crimea at the end of last year.” And it has indicated that Moscow “expects” Yanukovich to “end any military cooperation with Georgia, a link that had flourished under his predecessor.

Paul Globe post about the new demands from Moscow. Apparently this includes repairing the relationship between the FSB and SBU, avoiding another incident like the one in 2009.  This is probably one reason why Yanukovych choose Brussels as his first destination, signalling to Moscow that he would attempt a multi-vector foreign policy like Kuchma. 

Ukraine is more likely to balance between east and west than rush back to Moscow. There are even some in Ukraine who think that Yanukovych could be a ‘Ukrainian Nixon'. Like Nixon in China, because he is more reassuring to Russia and to Ukraine's Russian-speaking population, he could actually take Ukraine further towards Europe in the long run than Yushchenko ever managed.

Unfortunately, Yanukovych, like Kwasniewski, is surrounded by too many representatives of the old guard, men who held power under president Leonid Kuchma (1994-2004) or were prominent during Yanukovych's brief return as prime minister in 2006-07.

Yanukovych is still focused on power consolidation, not in policy shifts that benefit Ukraine. I suppose a gas deal revision would be one indicator on the kind of government to expect from him, serious about change or just more rent-seeking. 

"We allotted some time - three months maximum. These three months do not mean that we will dismiss......If the situation does not improve, will take stricter measures" - he said.

• Its spelled K-Y-I-V. [Ukrainiana]
• Ukraine wants to revise the gas deal, but I wonder if its just a ploy for rent seeking by the oligarchs. [Ria Novosti]
• Factors that could have influenced Yanukovych's win over Tymoshenko. [Taras Kuzio]
• Financial Time's Lex thinks that the current political consolidation is good for investors. [FT]

So how did the Stability and Reform coalition (will this soon be another oxymoron like the Anti-crisis coalition?) get created and why?  Yanukovych was unwilling to call snap election ostensibly  because there was no money for new elections.  He also may have feared that Regions would face stiff competition from BYuT in parliamentary elections.  While the Communists and Bloc Lytvyn would support Regions in a coalition these three factions only added up to 219 deputies .Regions didn't have sufficient faction support to build a coalition, but it did have a majority of support among deputies.  Thus, Regions solved this problem by changing how coalitions are formed. Now it could snatch select BYuT and NSNU deputies willing to join the Stability and Reform coalition.  And the coalition was formed.

The Stability and Reform coalition has been formed with  Mykola Azarov as prime minister in the new government. President Yanukovych used lofty (cheap Soviet-speak) language to describe the purpose of the new coalition. 

 Regions latest move to consolidate power involved changing  how coalitions are formed in the Rada. A coalition would be formed by deputies not factions. In this way Regions can work with just the deputies willing to join a Regions-led coalition. Even Viktor Balahoa sees this change in forming new coalitions as a significant political maneuver. And now we have a new coalition loyal to Yanukovych, something former President Yushchenko never had when he was president. 

Yulia Tymoshenko's government was formally dismisses after yesterday's announcement by the speaker that the coalition was no longer active. 7 BYuT deputies, 15 NUNS deputies, and 19 Bloc Lytvyn deputies (41 deputies from the coalition) voted for the dismissal, in total 243 voted to dismiss the government. As I mentioned in an earlier post,  an alternative coalition led by Regions has been ready  for some time. And so Yanukovych's political consolidation continues on, he will soon have a coalition under his control. Video via Pravda.

If Yushchenko gets a post in the government, like premiership, over someone else I'd still be surprised. Though it would make sense considering his deeply unpopular, he would be completely dependent on Yanukovych. 

And so its done, Lytvyn terminates the coalition. Well technically, the lack of a coalition document ended the coalition. I now see why Tymoshenko preferred a vote of dismissal over Lytvyn's demand for a document supporting coalition. 

 

Really, Tymoshenko wants to put a vote of no confidence to the test? Now that the week has begun, the new president must face his recalcitrant prime minister. The speaker of the Rada claimed that the coalition would cease to be if no signatures are presented 2nd March. Now Regions can show it has the political power to oust BYuT and take control of the Rada. According to one deputy from  NUNS, the faction hasn't provided the minimum signatures needed to preserve the present coalition.  Nevertheless, the prime minister may believe that there will not be enough votes to dismiss her government. 

 This from a blog post by  Paul Krugman commenting on The Economist article calling Latvia a success story. 

And the other little things — the 17.5 percent fall in real GDP, the 23 percent unemployment rate? Minor details.
Actually, as Hugh points out, Latvia is still a long way from having brought prices and wages down to a competitive level. So it’s still faced with the prospect of years of grinding deflation and sky-high unemployment. But it’s a success!

Ukraine (15% GDP contraction) only did a a bit better than Latvia (17.5% contraction). So would Ukraine be considered a success story by The Economist?