UKRAINE: ORANGE COALITION TALKS STALL

C O N F I D E N T I A L SECTION 01 OF 02 KIEV 001169

SIPDIS

E.O. 12958: DECL: 03/27/2016
TAGS: PGOV PREL KDEM ETRD
SUBJECT: UKRAINE: ORANGE COALITION TALKS STALL

Classified By: Ambassador for reasons 1.4(a,b,d).


1. (C) Summary: On the basis of exit polls projecting a
surprisingly strong second-place showing in the March 26
parliamentary elections for her eponymous bloc, Yuliya
Tymoshenko is driving to close a deal that will reunite the
original Orange coalition and return her to the PM slot.
Oleksandr Moroz' Socialist Party reportedly is on board to
reunite. Despite early positive statements by leaders in
President Yushchenko's Our Ukraine bloc, Yushchenko has not
yet spoken publicly about the election results or a possible
majority coalition in the Rada. A Tymoshenko-driven press
conference to sign the coalition agreement was postponed the
morning of March 27 due to an ongoing meeting of the Our
Ukraine political council. Close Yushchenko advisor and
former Secretary of the National Security and Defense Council
Petro Poroshenko told Ambassador March 27 that Tymoshenko was
putting great pressure on Yushchenko to make a deal. Other
Our Ukraine insiders told Ambassador that Yushchenko had
accepted his bloc's unexpected weak third-place showing, but
not a return by Tymoshenko to the premiership. Yushchenko
has instructed current PM Yekhanurov to being consultations
with all parties, on a bilateral basis, to form a majority
coalition, which could be with the opposition Party of
Regions, which received its expected one-third plurality of
the votes, or with Tymoshenko. This move to engage Regions,
as well as other parties, indicates that the principal
opposition to an Orange coalition now is Yushchenko, plus his
entourage. End summary.

Tymoshenko in driver's seat?
--------------

2. (C) Exit poll projections, including an independent exit
poll funded by the USG and European governments, released
shortly after the polls closed at 10 pm March 26 showed a
surprising strong second-place finish for former PM Yuliya
Tymoshenko's BYuT bloc, behind former PM Viktor Yanukovych's
Party of Regions. Initial statements by campaign leaders for
President Yushchenko's Our Ukraine (Roman Bezsmertny and
Roman Zvarych) endorsed a reunification of Team Orange.
Tymoshenko has made clear for weeks her view that the
second-place winner (after Regions) would dictate the PM
selection and that, if her bloc finished second, she would be
the PM candidate.

Warning signs
--------------

3. (C) Indications that negotiations over the reuniting the
Orange coalition were having difficulty became clear later
the morning of March 27. Yushchenko has not made any public
statements on the election results or on a possible coalition
with Tymoshenko and the Socialist Party. Both Our Ukraine's
and BYuT's separate press conferences were been postponed
indefinitely due to an ongoing meeting of the Our Ukraine
party political council. Former NSDC Secretary and
Yushchenko advisor Poroshenko told Ambassador March 27 that
Tymoshenko was putting great pressure on Yushchenko to make a
deal. Poroshenko blamed Our Ukraine's disappointing
electoral showing on the bloc's poor campaign tactics, and
specifically on Yushchenko's push late in the campaign for
the PORA-PRP and Kostenko-Plyushch blocs -- a move that
Poroshenko said cost Our Ukraine 7% of the vote. Poroshenko
also said that Yushchenko had not endorsed the public
statements by his bloc's leadership.

Which road to take?
--------------

4. (C) Later in the morning, Our Ukraine campaign leader
Roman Zvarych told Ambassador that it was very hard to say
now what would happen. Our Ukraine understood that
Tymoshenko had won the election and that Our Ukraine came in
third place. Late on March 26, he and Bezsmertny had sent
the message that Tymoshenko should take the initiative to
form a coalition and that Our Ukraine was prepared to fulfill
its obligations pursuant to the pre-election understanding
worked out with Tymoshenko that gave the party that did
better in the election the lead on naming the new PM.

Boulder in the road
--------------

5. (C) However, Zvarych underscored, things had rapidly
changed from the night before. Others in Our Ukraine had
absorbed the fact that Tymoshenko had won, but they had
started to backtrack on the commitment regarding the PM slot.
Yushchenko had signaled his unhappiness with the prospect of
Tymoshenko as PM. Yushchenko "probably will not allow this
to happen now." Zvarych said that he and Bezsmertny were a
minority right now within Our Ukraine. Yushchenko had
instructed PM Yekhanurov to begin consultations with all
parties, on a bilateral basis, to form a coalition.

Comment
--------------

6. (C) This information confirms that that the principal
opposition to an Orange coalition now is Yushchenko, plus his
entourage. Ambassador is meeting with Presidential chief of
staff Rybachuk in the early afternoon March 27 and may obtain
a fuller readout on Yushchenko's thinking.


7. (U) Visit Embassy Kiev's classified website:
www.state.sgov.gov/p/eur/kiev.
Herbst