The compromise finalized last week between Ukraine’s embattled president, Viktor Yushchenko, and the emboldened pro-Russian majority in the country’s parliament, has clinched the political resurgence of the ‘villain’ of the 2004 Orange Revolution, Viktor Yanukovych, who now heads the nation’s government with more powers than ever

ever. 

Deputies from the pro-presidential Our Ukraine bloc joined the so-called Anti-Crisis Coalition, led by Yanukovych’s Regions faction, and including the Socialist and Communist parties, to vote Yanukovych in on Aug. 4.

As a result, Regions has emerged squarely in control over some of the country’s most powerful Cabinet positions, while Yushchenko’s authority could further diminish.

The compromise between Yushchenko and Regions, which brought an end to speculation as to whether the president would dissolve parliament for not being able to form a government within the 60 days stipulated by the country’s Constitution, was reportedly contingent on promises made by Regions to promote key elements of Yushchenko’s economic and foreign policy agendas – aimed at future Euro-Atlantic integration.

Nonetheless, pronouncements by key Regions appointees this past week, in combination with the weakening of the nation’s presidency following last January’s changes to the constitution, call into doubt whether the good-faith agreement signed Yushchenko and Yanukovych – known as the Declaration of National Unity – will hold together in the long term.

Moreover, continuing discord within the ranks of the president’s Our Ukraine bloc, and vows by the Yulia Tymoshenko Bloc (BYuT) to return to parliament in active opposition to the  the new government, suggest that instability and a parliamentary gridlock are a distinct possibility for the future.

Government formed

After four months of protracted negotiations, last week was a busy one for the majority coalition formed recently in parliament. The president’s endorsement of Yanukovych as prime minister on Aug. 2 spurred 30 deputies from the pro-presidential Our Ukraine bloc to join the so-called Anti-Crisis coalition, including Regions (180 deputies), the Socialists (30), and the Communist Party (21). Six deputies from BYuT also supported the candidacy of Yanukovych, who had served as prime minister under former Ukrainian President Leonid Kuchma before challenging Yushchenko for the presidency in 2004.

A total of 51 Our Ukraine deputies, many of whom are from the bloc’s younger generation, abstained from voting with several voting against Yanukovych.

And as expected, the Party of Regions emerged squarely in control of the  new government, receiving all the deputy prime minister posts.

Old faces in the upper echelons of the second government of Viktor Yanukovych include Mykola Azarov as First Deputy Prime Minister and also the Minister of Finance; Andriy Kliuyev as Deputy Prime Minister for Energy, and Dmytro Tabachnyk as the Deputy Prime Minister for Humanitarian and Social Issues. Tabachnyk will oversee Our Ukraine’s appointments in the youth and culture ministries.

All three men formed the backbone of Yanukovych’s government under President Leonid Kuchma, who had endorsed Yanukovych for the presidency in 2004.

President Yushchenko used his prerogative to reappoint Borys Tarasiuk and Anatoliy Hrytsenko as foreign and defense ministers, respectively, figures who could help to maintain Ukraine’s trajectory towards Euro-Atlantic integration, the hallmarks of which are NATO and WTO accession and the reaching of free-trade agreements with EU countries.

The majority coalition appointed Our Ukraine’s Roman Zvarych as Justice Minister, a post he had held in the Yulia Tymoshenko government in 2005. All of the president’s decrees must be registered through the Ministry of Justice. Zvarych, a member of Yushchenko’s inner circle, left the Tymoshenko cabinet during last fall’s split of the Orange camp, which ended in her dismissal.

Also, regarded as loyal to the president, former Socialist party member Yuriy Lutsenko retains his post as the Minister of Internal Affairs, even though he publicly voiced his fierce opposition to a Yanukovych-led government on many occasions, claiming that his police investigators had found evidence of a cover-up of Yanukovych’s criminal record as a youth.

With the appointment of Yanukovych and the formation of a new Cabinet of Ministers, the controversial constitutional amendments adopted on Dec. 8, 2004, during the post-presidential election protests known as the Orange Revolution, after widescale rigging of the presidential election, gave the prime minister more powers.

The amendments effectively changed the rules of engagement between the president and parliament.

The president can, for example, no longer dismiss the Cabinet, as he did in Sept. 2005, when he fired the government led by former Prime Minister Yulia Tymoshenko amid accusations of mismanagement.

The power to dismiss ministers is now squarely in the hands of a simple parliamentary majority of 226 people’s deputies, and it is unclear whether Cabinet appointees favorable to President Yushchenko, especially Lutsenko and Zvarych, are insulated from dismissal.

BYuT in opposition

With the exception of six deputies who voted for Yanukovych, BYuT has been notably absent from parliament and had publicly distanced itself from the negotiations that brokered the end to the parliamentary crisis.

According to Hryhoriy Nemyria, deputy head of the BYuT faction, BYuT did not attend last week’s parliamentary sessions or sign the Declaration of National Unity on Aug. 3 because “it saw no reason to sign a document where Our Ukraine’s participation is window dressing for the Party of Regions to run the government or be present at the birth of a Molotov cocktail coalition that could explode in the hands of the people trying to build it.”

He points to serious divergences in terms of the coalition members’ economic and foreign policies, which could break up the coalition.

Moreover, he said, the good-faith agreement would undergo three major tests over market reforms, Euro-Atlantic integration and energy security.

With market reform,” said Nemyria, “the test is WTO entrance by the end of this year. If you carefully read the budget resolution authored by Mr. Azarov, the current first deputy Prime Minister and Minister of Finance, point 7 of the second part of the resolution calls for the revision of the liberal trade regimes established by the previous government and the previous parliament. These are basically the WTO bills that were fiercely opposed by the Party of Regions…”

According to Nemyria, the budget resolution is a more powerful document than the Declaration of National Unity, as it outlines the program of the Cabinet of Ministers. Moreover, budget resolutions over the next few years could in theory chronically underfund programs, such as, for example, those geared towards streamlining Ukraine’s military-industrial complex, which is a vital component to the country’s Euro-Atlantic integration.

This week, Mykola Azarov called for the return of free economic zones, corporate tax cuts and the raising of import tariffs. These are policies that could bolster economic growth and attract investment, especially for heavy industry in Eastern Ukraine, the heartland of the Party of Regions and its business interests.

However, according to Oleksandr Ryabchenko, director of the International Institute of Privatization, Asset Management and Investment, “free economic zones are an incredibly powerful weapon, which can be beneficial, but also harmful, depending on how they are used. It’s absolutely necessary to maintain order, and if the government yields to lobbying interests that would like to quietly make their own money, this could be dangerous for the economy.” 

The president’s strongest card in terms of maintaining a liberal market-oriented course of reform is his power of veto, which insiders say he must, nonetheless, deploy strategically, especially given Andriy Kluiyev’s recent public statements that by the beginning of parliament’s session in early September a majority of 322 deputies will be formed.

According to Kliuyev this will mean stability and efficient cooperation between parliament and the Cabinet of Ministers. For President Yushchenko, this would be a constitutional majority that could override his presidential veto, and seriously undermine his ability to influence the government’s policy agenda.

Dmytro Potekhin, director of the European Strategy Group, noted that although the adoption of constitutional reforms on Dec. 8, 2004 was flawed, procedurally and in terms of content, “they have, nonetheless, introduced a balance of powers with better prospects than a strong presidential system.”

He added, that “given the fact that there is now not one single center of influence, the majority of the time the president and parliament are going to have to find an agreement. And an independent Constitutional Court will be incredibly influential in this context,” adding that parliament’s Aug. 4 amendments to the law on the Constitutional Court, designed to prevent a review of constitutional reforms, “is a sign that parliament and the president do not want to start a war of appeals to the Constitutional Court.”

This legislation was widely criticized by legal experts as an unconstitutional violation of the separation of powers. According to them, only the Constitutional Court can decide what is and what is not subject to constitutional review. Forming government policy based on cooperative agreements between the president and parliament could not only put the president’s policy agenda at risk, but might lead to confrontations where the Constitutional Court will, nonetheless, be called upon to intervene. Although there may be more balance in the government, questions remain about how effectively checks will be employed.