UKRAINE: OUR UKRAINE INSIDER ZVARYCH ON

C O N F I D E N T I A L SECTION 01 OF 03 KIEV 002331

SIPDIS

SIPDIS

E.O. 12958: DECL: 06/05/2016
TAGS: PGOV PREL PINR KDEM SOCI MARR ETRD UP
SUBJECT: UKRAINE: OUR UKRAINE INSIDER ZVARYCH ON
ORANGE-BLUE CONSULTATIONS

REF: A. KIEV 2316

B. KIEV 2281

C. KIEV 2279

D. KIEV 2190

E. KIEV 2296

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


1. (C) SUMMARY: Our Ukraine (OU) negotiator Roman Zvarych
updated DCM June 14 regarding ongoing OU-Party of Regions
talks on forming a Rada (parliament) majority coalition,
trying to put a positive spin on OU's possible about-face.
An Orange-Blue coalition could be in place by June 20, since
differences were relatively narrow and Regions wanted to move
quickly. Zvarych blamed Yuliya Tymoshenko's difficult
personality for the breakdown in "Orange" coalition talks and
generally characterized Socialist Party leader Oleksandr
Moroz' offer as too little, too late. In discussion with
Regions, OU was insisting on filling the PM position and
Regions in turn would get the Rada speakership. Zvarych
argued a coalition with Regions would allow Ukraine to both
strengthen its relations with Russia and move toward NATO.
Regions had agreed to a NATO Membership Action Plan (MAP) by
September and would sign a private protocol confirming its
agreement. OU also made clear to Regions that it would
"close its doors" to Regions, if the party pursued a special
investigation into the U.S.-Ukraine "Sea Breeze" exercise in
Crimea. (Note: The Communist Party tabled a motion to add
the item to the Rada agenda with Regions support during the
June 15 session, but it failed to pass. See septel.) If an
Orange-Blue coalition were formed, OU would minimize the
negative political fall-out by quickly delivering on economic
issues that impacted voters day-to-day lives. Regions would
also support OU legislation on administrative reform,
anti-corruption efforts, the end to a moratorium on
agricultural land sales, and WTO accession, with one
reservation. Perhaps illustrative of OU's uncertainty over
which direction to go in coalition negotiations, OU lead
negotiator Roman Bezsmertniy sent the Embassy a message in
the late afternoon of June 15 that OU was "equidistant" from
Tymoshenko and Regions and asked for the USG's input. End
summary.

Orange-Blue by June 20?
--------------


2. (C) DCM discussed ongoing talks on forming a Rada
(parliament) majority coalition between Our Ukraine (OU) and
Party of Regions with Our-Ukraine negotiator Roman Zvarych
June 14. Zvarych was careful to characterize the talks as
"consultations" and not negotiations, though he thought
differences could be worked out quickly, possibly leading to
the announcement of an "Orange-Blue" coalition by June 20.
OU would not make a final decision on a coalition with
Regions without President Viktor Yushchenko's final approval
("a clear position"),but noted that today's consultations
were started only after Yushchenko gave a "clear signal" that
he wanted OU to move toward Regions. In the consultations,
Regions side was represented by MP Mykola Azarov, and wanted
to move forward quickly. Zvarych noted OU was "taken aback"
by Regions desire to move quickly, and was unable to respond
as quickly in coalition talks.


Whither Tymoshenko?
--------------


3. (C) Zvarych said OU could not see any reason to join an
Orange Coalition if Tymoshenko were PM. Tymoshenko had
"fascist tendencies," which became clear to him when she
tried to gain his support for a bill she drafted enforcing
the "imperative mandate," allowing parties to exclude members
who did not follow the party line. Later in the
conversation, Zvarych noted that Tymoshenko was not the woman
she had been a year ago when she was PM, and expressed
concern for Ukraine's democratic foundations if she became
PM. He warned that people did not realize how dangerous
Tymoshenko was, and averred that OU's primary reason for not
forming an Orange Coalition with Yuliya Tymoshenko's Bloc
(BYuT) and the Socialists was to keep Tymoshenko from
becoming PM. OU's opposition to Tymoshenko as PM began to
harden two weeks ago when she began demanding numerous
changes to the coalition agreement. Zvarych, noting that he
was no psychologist, said he thought Tymoshenko had mental
problems because she would scream at people during the
coalition negotiations.

Moroz's offer falls flat
--------------


4. (C) Zvarych said Socialist chief Oleksandr Moroz's offer

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to drop his bid for the Rada speakership if government
positions were filled according to election results was "more
unacceptable than having Moroz as speaker." Sounding like
his old feisty self, Zvarych said he asked Tymoshenko if she
would give up the PM job if Yushchenko joined BYuT. (Note:
Since Tymoshenko was insisting that the Presidency, PM, and
Speaker positions be divided evenly between OU, BYuT and the
Socialists, if Yushchenko were a BYuT member, OU would have a
claim on the Prime Minister position and presumably the
Socialist could have the Rada speakership.) It would be
perfectly logical, per Zvarych, for her to give up the
PM-ship in this situation. According to Zvarych, Tymoshenko
refused to do so.

Distribution of jobs in Orange-Blue
--------------


5. (C) Zvarych reported that only a "preliminary discussion"
had been held June 14 with Regions on job distribution in a
potential coalition. OU would not vote for a coalition with
Regions unless OU got the PM job; Regions would get the
position of Rada speaker. Zvarych thought either Regions
head Viktor Yanukovych or Regions MP Raisa Bohatyrova would
get the speakership. PM Yuriy Yekhanurov would "possibly" be
PM, though when pressed Zvarych said he had not been privy to
the discussion and did not have details on who were
candidates for what jobs. (Comment: Perhaps he did not have
the details, but Zvarych also could have been sidestepping
because OU-insider Petro Poroshenko was in the running for
the PM job. Tymoshenko claimed to us many times previously
that Zvarych was in Poroshenko's corner.)

Political fallout for OU?
--------------


6. (C) According to Zvarych, at the June 13 faction meeting
of OU, an "overwhelming majority" spoke in favor of a
coalition with Regions. Zvarych was surprised by this
development, and pointed to it as proof that the tide within
OU had begun to turn against Tymoshenko about two weeks
previously. Zvarych reiterated that Yushchenko would have to
give a green light or signal before there would be an
agreement with Regions, although Yushchenko would not have to
"bless" the deal. He acknowledged there would be "major
ramifications" in terms of political fallout if OU created a
coalition with Regions. OU's strategy would be to move
quickly on economic and other "bread and butter" issues that
directly affected people's lives in order to shore up
political support. Zvarych opined that Tymoshenko would be
"very active" against OU in the next few months and that OU
would "have to learn how to take a punch -- there's no other
way out." OU's preliminary analysis was the party needed to
ensure the coalition with Regions would last, because, if
Regions were to pull out in a year, OU would "be sunk."
Nevertheless, OU would be "irresponsible" not to set up a
coalition, since it would be a major loser if Yushchenko
dismissed the parliament. Zvarych averred that a coalition
with Regions would "strengthen Ukraine's sovereignty" and
lead to both better relations with Russia and movement toward
NATO. He provided a read-out on specific policy issues
discussed between OU and Regions (see below) and noted that
Regions had "only" 30 proposals for the coalition agreement.

Military Relations
--------------


7. (C) From the coalition talks, Zvarych said Regions was
fine with a September date to move ahead with a NATO
Membership Action Plan (MAP). Regions had "no problem" with
seeking full NATO membership, only a "request" that OU not
make public its agreement on NATO. It would sign a private
protocol affirming that Ukraine could move in the direction
of NATO membership.


8. (C) DCM noted we heard Regions planned to introduce and
try to enact legislation June 15 authorizing an investigation
into the events in Feodosiya and the presence of our Marine
reservists in Crimea. Zvarych said OU made it clear to
Regions that, if they took such a step, OU would "close its
doors" to Regions. The party knew it had to take some steps
to back away from last week's activities in Feodosiya and, if
it wanted to move quickly to a coalition agreement, Regions
needed to send a signal and take a public step on this issue.
It was hedging right now, and needed to work out its
position. Zvarych predicted that, once there was a Rada
speaker, the legislation authorizing the exercise would be
enacted. Regions would not do an "about face" on the issue,
but it would take incremental steps to change its position.

Governance
--------------

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9. (C) Zvarych said Regions was "comfortable" with OU's
position on safeguarding the territorial integrity of Ukraine
and would support OU's legislation on territorial and
administrative reform. Such legislation would aim to
decentralize power and push budgetary responsibility down to
the Oblast and Rayon level.


10. (C) Zvarych said Regions fully agreed with draft language
in OU's coalition agreement. Regions would subscribe to the
ethical code laid out in the agreement, support the creation
of a National Bureau for Investigation, and support reform of
the Prosecutor General's Office to prosecute cases, not
investigate them.

Economic Issues
--------------


11. (C) When queried on the RosUkrEnergo gas deal, Zvarych
responded that it was "an interesting question," noting that
a PM other than Tymoshenko could reach an accommodation with
Moscow more easily. That said, Zvarych noted Russia was
acutely aware that Ukraine was moving toward the EU and NATO.


12. (C) Zvarych said Regions was ready to end the moratorium
on sale of agricultural land as scheduled on December 31, and
observed that, on January 1, it should be possible to "move
toward market relations" in the agricultural sector.
However, first the GOU would need to set up the legal
infrastructure to handle this as the land certificate system
needed to be put in order.


13. (C) Zvarych said WTO accession was "no problem" for
Regions, with the caveat that Regions wanted to protect the
metallurgical industry "within the WTO framework," an issue
that still needed to be worked out.

Late news from Bezsmertniy
--------------


14. (C) In the late afternoon of June 15, OU lead negotiator
Roman Bezsmertniy sent us a message noting that OU was
"equidistant" from a coalition with Tymoshenko or Regions.
He asked for input from us or Washington on the risks of
coalition with either partner.


15. (U) Visit Kiev's Classified Website:
www.state.sgov.gov/p/eur/kiev.
Taylor