Yuliaphobia: Why does president want to push nation off cliff?

 Another pre-term election would be bad for Ukraine’s economy, bad for Ukraine’s entry into NATO (an election would be held at the same time as the December NATO review meeting),  even worse for Yushchenko’s popularity and could be disastrous for his Our Ukraine-People’s Self Defense bloc (which might not make it into parliament).

Western banks and financial institutions, such as Royal Bank of Scotland, Fitch, Standard and Poor’s, and HSBC see a pre-term election as a disaster for Ukraine. Here’s a collection of comments:

“Obviously early elections are the worst-case scenario, as given the challenges, Ukraine needs a strong government to take difficult decisions and Ukraine’s ratings suffer from political volatility. The ratings would benefit from the formation of a government committed to sustainable economic policies with the authority to pursue them, while deteriorating policy discipline would be negative. Signs that Ukraine’s fundamental political stability was coming into question would be severely negative.

“As long as the atmosphere remains politicized, there will be little room for consensus policy-making on key issues including any passage of further anti-inflation measures, privatization, or adjustment of debt issuance plans’ and ‘However, internal problems, namely political instability and worsening macroeconomic fundamentals, aggravated by global financial turmoil, create substantial difficulties in attraction of international capital.

 The president is increasingly acting irrationally. Going into elections when both he and Our Ukraine-Peoples Self-Defense have only 5 percent support is acting like a kamikaze pilot.

So what is Bankova’s game plan?

Yushchenko wants to remove Tymoshenko at all costs. Lets be frank – he intensely dislikes her. In a Channel 5 interview this week Tymoshenko admitted that she had not had a face to face meeting with Yushchenko in years.

Yushchenko  wants to install a new technocratic Prime Minister (possibly Yekhanurov or Arseniuk) through a grand coalition. After the 2006 elections Yekhanurov negotiated a grand coalition with Regions where they agreed he would remain prime minister.

The grand coalition would also back Yushcheko’s candidacy in the presidential elections. The Akhmetov wing of Regions would financially support such a coalition and Yushchenko’s candidacy.
Tymoshenko has been undertaking negotiations with Our Ukraine-Peoples Self Defense and Lytvyn for a new enlarged coalition. Half of Our Ukraine-Peoples Self Defense wants to join while the other half is being ordered by Bankova not to.

In publicly conducting negotiations on an Orange coalition and publicly being seen to accept Our Ukraine-People’s Self Defense ultimatums Tymoshenko will not be blamed if the coalition negotiations fail and Yushchenko calls elections. Then she can say: “We tried everything we could to preserve the Orange coalition but Yushchenko didn’t want it. This preserves her support in western Ukraine.

Yushchenko’s irrationality in lurching Ukraine towards elections is irresponsible and he will ultimately pay the price. Meanwhile, Ukraine for a second time loses the opportunity to move towards NATO membership (as in 2006 when an Orange coalition was undermined by the president’s unwillingness to see Tymoshenko return as prime minister), the economy and foreign investment are damaged and Yushchenko undermines his chances of ever being re-elected (they were even slim before the crisis).