Ukraine's Victor Yanukovych has been officially declared President-elect but his rival, Prime Minister Yulia Tymoshenko, says she does not regard him as legitimately-elected -- a stance that spells a period of huge uncertainty for the country.
Tymoshenko has refused to step down voluntarily as Prime Minister and it seems likely she will be still in the job at the end of February when Yanukovych is expected to be inaugurated.
Yanukovych himself will have to feel his way forward very cautiously since his victory over her was only by a narrow margin of 3.5 percentage points. He had overall less than 50 percent of the country’s vote.
WHAT HAPPENS NEXT?
Ukraine’s Verkhovna Rada (parliament) assumes importance.
Tymoshenko’s refusal to step down as prime minister is likely to trigger a vote of no-confidence in parliament which is almost certain to pass.
But though she then has to quit as prime minister, she stays on as acting prime minister until a replacement is found.
In Ukraine, the prime minister is nominated by a parliamentary coalition, not by the president as in some former Soviet republics. The president has to approve the coalition’s choice, but he can not veto it.
HOW EASY IS IT TO FORM A NEW COALITION?
Yanukovych will want a new coalition to be formed based on his Regions Party faction in parliament.
But this will be a lengthy process. The Regions will have to hunt for new coalition partners to secure a majority and this involves serious horse-trading. Parties being wooed by the Regions will want to know what share of government portfolios will be coming their way. The crucial question for them will be: Who will be prime minister?
WOULD TYMOSHENKO’S BLOC JOIN A GRAND COALITION?
Unlikely. Tymoshenko launched personal insults against Yanukovych in what was a very bitter campaign and she now says he is not legitimately-elected. Her bloc alleges electoral fraud by the Yanukovych camp and it is hard to see any compromise between the two sides.
WHO ARE POSSIBLES FOR THE PRIME MINISTER’S JOB ?
The prime minister does not have to be a member of parliament. This is important to bear in mind since businessman Sergey Tigipko, who has been wooed by both the Yanukovych and Tymoshenko camp since he performed strongly in the election first round, is not a deputy.
Also mooted for the job is Mykola Azarov, a former finance minister in a previous Yanukovych government and an ally of the President-elect. But he may be a little too close to Yanukovych to be acceptable to the Regions’ new partners.
Arseniy Yatseniuk, a 35-year-old former foreign minister and central banker, is seen as a possible compromise.
WHAT HAPPENS IF NO COALITION CAN BE FORMED?
Yanukovych may have to dissolve parliament and call a snap parliamentary election. But this is not something he necessarily wants, nor do many deputies in parliament. His Regions Party could lose seats, some parties could disappear and a new — unpredictable — political landscape would emerge. Tymoshenko, who performs very well on the stump, may well be counting on an early parliamentary election to leave her at the head of a very strong opposition.
WHERE DOES THIS LEAVE UKRAINE?
Ukraine could face months in limbo until a new political order takes shape and a new prime minister is found to be steward of the struggling economy. If she is ousted, Tymoshenko could tough things out as acting prime minister for some time. But her status is weakened and her government can not push forward on crucial questions.
WHAT ARE THESE ISSUES?
Firstly, with her as acting prime minister it will be next to impossible for the government to push through a 2010 budget which parliament has already thrown back at her as "populist" and empty of ideas.
Passing a 2010 budget is one of the key demands of the International Monetary Fund which has helped Ukraine through a $16.4 billion bailout programme, though this was suspended late last year when Kiev breached promises on social spending.
Secondly, the IMF might choose not to resume lending until political stability necessary for carrying out economic reform has returned to Ukraine.
In particular, it will not be impressed if the in-fighting between Tymoshenko and current President Viktor Yushchenko, which has paralysed decision-making, is now simply replaced by a shooting-match between Tymoshenko and Yanukovych.
WHAT ARE THE PROSPECTS ONCE MATTERS HAVE STABILISED?
Things are still going to be tricky for Ukraine even if a prime minister who can work with Yanukovych finally emerges.
Yanukovych has said that he backs higher wages for state employees and higher pensions — exactly the issue that caused the IMF to suspend lending. Though he does not directly shape economic policy, his signature is required on key agreements with the Fund.
Neverthless, most Ukraine-watchers expect Yanukovych to reach a deal with the Fund, which would bolster state finance, have a positive impact on Ukrainian bonds and eventually may prompt upgrades from international rating agencies.
He has also said he wants to negotiate parts of the 10-year deal that Tymoshenko worked out with Russia over supplies of natural gas — previous negotiations have turned into rows and led to cuts of Russian gas flowing to Europe through Ukraine.
But he may offset a request for lower prices with a proposal for Russia to join a consortium to run the pipeline network. In general, relations with Russia are set to improve, which would help avoid the rows over gas that have affected supplies to European Union consumers.
