C O N F I D E N T I A L SECTION 01 OF 04 KIEV 003029

SIPDIS

SIPDIS

E.O. 12958: DECL: 08/04/2016
TAGS: PGOV KDEM UP
SUBJECT: UKRAINE: TALE OF TWO VIKTORS: YUSHCHENKO NOMINATES
YANUKOVYCH AS PM, BROAD COALITION IN THE OFFING

REF: A. 04 KIEV 4952


B. KIEV 2888

Classified By: Ambassador, reason 1.4 (b,d)


1. (C) Summary. In another last minute decision crucial to
the political future of Ukraine, President Viktor
Yushchenko initiated the procedures required for
dissolution of the Rada (parliament) August 2, only to
agree in the middle of the night instead to endorse
Regions' leader Viktor Yanukovych's nomination as Prime
Minister. The reversal came after Yushchenko conducted a
final round of multi-hour negotiations with Yanukovych and
Speaker Oleksandr Moroz. By mid-day August 3, both Regions
and OU sources were suggesting that a new coalition had
been formed between Regions and Our Ukraine (OU) although
the details, including participation by the Socialists and
Communists, remained unclear. In the mid-afternoon
roundtable signing of the Declaration of National Unity, or
Universal, sparks flew between Yushchenko and Yuliya
Tymoshenko, who accused Yushchenko of capitulating to
Regions on all important issues and then refused to sign
the document. Yushchenko told Ambassador August 3 that the
developments over the previous 24 hours had been very
important for Ukraine, helping to remove the divisions
between eastern and western Ukraine while reinforcing his
domestic and foreign policy priorities: integration into
NATO and the EU as Ukraine's strategic orientation; the
unity of the Ukrainian state; removal of the artificial
issue of the status of the Russian language; support for
creation of a unified Ukrainian Orthodox church; and
development of a land market. Our Ukraine heavyweight
Poroshenko later confirmed to the Ambassador that a new
coalition agreement, drawing on elements of the Universal,
would be signed in the Rada by OU and Regions on August 4,
but it was unclear whether the Socialists or Communists
would sign too.


2. (C) Comment: This is at least the third time in two
years that Yushchenko has made a critical last-minute
change of heart on a key political decision. On December
8, 2004, he waited until after Rada voting had started to

call on Our Ukraine (OU) to abandon its position and
support constitutional changes weakening the power of the
Presidency as part of a "big package" deal which also
secured a revote of the falsified second round (ref A).
After greenlighting an OU-Regions coalition deal initialed
June 20 in which Yuri Yekhanurov would serve as PM,
Yushchenko reversed course at the last moment the morning
of June 22, authorizing OU to sign the Coalition of
Democratic Forces text with Yuliya Tymoshenko's Bloc (BYuT)
and the Socialists instead. Yushchenko and OU had flirted
with forming a coalition with Regions ever since OU slipped
to a weak third place showing behind BYuT in the March 26
elections. In the aftermath of Moroz' July 6 defection
from the so-called "Orange Coalition," Yushchenko and OU
appear to have made the best deal available for themselves,
one which may also give Ukraine a chance to surmount the
orange-blue divide existing since the 2004 Presidential
election cycle. How the two Viktors will work together in
office after the bitter enmity of the 2004 and 2006
election cycles will remain an open question. End Summary
and Comment.

Surprising End-game, with a two Viktor solution
-------------- --


3. (SBU) When Yushchenko initiated a roundtable political
discussion of a possible Declaration of National Unity
leading to a coalition of National Unity July 27, opinion
was split on whether the exercise would lead to substantive
progress in overcoming the political impasse, merely serve
as cover for OU accommodation with Regions, or expose
unreconcilable rifts between Yushchenko/OU and Regions,
leading to possible Rada dissolution and new elections.
The televised July 27 marathon session showed Yushchenko in
command, acting Presidential. Subsequent late night
sessions lasting up to 10 hours started July 28 and
occurred behind closed doors, involving Yushchenko,
Yanukovych, and Moroz (July 28, August 2), Yushchenko and
Yanukovych (August 1), and a working group involving key
deputy leaders of OU, Regions, the Socialists, occasionally
the Communists, and the Presidential Secretariat haggling
over the text of the Universal and a possible reconfigured
coalition.


4. (SBU) Initial reports during the late night August 1
session indicated tentative agreement had been reached
between Yushchenko and Yanukovych and OU and Regions.
However, Regions took a tougher line in the morning of
August 2, categorically ruling out signing of the Universal

KIEV 00003029 002 OF 004


version that Yushchenko supported. Yushchenko subsequently
initiated mid-afternoon consultations with the Rada
leadership and party faction leaders in line with Article
90 of the Constitution governing dissolution of the Rada,
which in turn triggered Moroz calling a special session of
the Rada to discuss Rada reaction to a possible dissolution
in line with its July 24 resolution (ref b).


5. (SBU) The unfolding drama took multiple turns in rapid
succession August 2 and 3. Regions MPs, led by in-house
lawyer Olena Lukash, rushed to register a draft impeachment
resolution at the Rada's Secretariat at 1730; on the way,
they stopped to show it to Socialist deputy leader
Rudkovsky as he was talking to us in the Rada lobby. OU
staffers and deputies such as MP Mustafa Jemilev told us at
1800 that Yushchenko would dismiss the Rada and was
recording an address to the nation with a supportive
explanation; press reports later claimed that such a taped
address was delivered to State TV channel UT-1 at 1900,
only to be recalled an hour later.


6. (SBU) Moroz at the podium and other Regions MPs in the
lobby, however, expressed confidence that Yushchenko would
"do the right thing" and nominate Yanukovych as PM. Rather
than an early evening address to the nation, Yushchenko
resumed closed-door negotiations with Moroz and Yanukovych
at 2000, concluding close to 0200 with Yushchenko agreeing
to endorse Yanukovych's nomination as PM. The press had
spotted key Regions deputy leader Kluyev arriving
separately after 2000, amidst reports that Kluyev and OU
heavyweight Poroshenko had hammered out a possible list of
cabinet members in the event an accord was reached between
Yushchenko and Yanukovych allowing for Yanukovych to be PM
and OU to join the coalition.

Yushchenko: unifying the country, reiterating policy
priorities
-------------- --------------
-
---


7. (SBU) Speaking before the media at 0200 August 3,
Yushchenko described the chance to unify the country as the
decisive factor in his decision to forward Yanukovych's
nomination. He attributed his change of heart to success
in securing agreement by Yanukovych and Moroz to sign a
version of a Declaration of National Unity, the so-called
"Universal," which endorsed what he called "constitutional
values" on the five issues of critical importance to him
and Ukraine: unity of the Ukrainian state; language;
religion; domestic democratic reforms; and the strategic
direction of foreign policy.


8. (C) Yushchenko reiterated these themes to Ambassador
August 3 while elaborating on foreign policy and NATO in
particular. He said that agreement on the Universal had
removed the divisions between eastern and western Ukraine
while reinforcing his domestic and foreign policy
priorities, including: integration into NATO and the EU as
Ukraine's strategic orientation; the unity of the Ukrainian
state; removal of the artificial issue of the status of the
Russian language; support for creation of a unified
Ukrainian Orthodox church; and development of a land
market. Yushchenko said that Ukraine would make all
possible efforts to secure a Membership Action Plan (MAP)
at the Riga Summit. Yanukovych as PM would send a letter
in 10 days to NATO with this request; Yushchenko had urged
Yanukovych to visit Brussels and Washington early on to
demonstrate the commitment to the principles contained in
the Universal and to specific steps needed to fulfill this
vision.

Next Coalition: Blue-Orange or National Unity?
-------------- -


9. (SBU) As the Rada opened August 3 at 1000, it initially
appeared as if the existing anti-crisis coalition of
Regions, Socialists, and Communists would vote in
Yanukovych as PM; Socialist faction leader Tsushko
predicted to the press that a broad coalition of Regions,
Socialists, OU, and the Communists would subsequently
emerge. "Deep orange" OU deputy leader Mykola Katerynchuk
told us he was prepared to go into "constructive
opposition" rather than join a coalition with Regions.


10. (SBU) The ground appeared to shift again around 1130,
however, when OU deputy leader Roman Zvarych informed
journalists in the Rada lobby that a new coalition
agreement had been signed between OU and Regions, while
still open to others. He added that on August 4, the Rada
would create the conditions for the swearing in of the

KIEV 00003029 003 OF 004


Constitutional Court, and that the new coalition would
support all bills and actions designed to facilitate closer
cooperation with NATO, while leaving the ultimate question
of membership until after a national referendum.
Corroborating Zvarych's claim of an emerging new alignment,
Yanukovych's press secretary Rodion Myroshnyk told us that
the day's schedule had changed: the Universal would be
signed formally at 1400, followed by a joint caucus meeting
of Regions and OU, and then the vote approving Yanukovych
as PM.


11. (SBU) Sparks flew between Yushchenko and Tymoshenko at
the roundtable signing of the Universal. Tymoshenko,
talking as the leader of the parliamentary opposition,
accused Yushchenko of caving into Regions' demands for
textual changes on all the important issues: language,
NATO, Single Economic Space with Russia, a national church;
she called the declaration an "orange political
capitulation." Yushchenko first attempted to cut her off,
belittled her intervention as language fit for the bazaar,
and later termed her comments "demagoguery." (note: our
analysis, septel, of the final version compared to
Yushchenko's initial text from July 27 and Regions'
counterproposals suggests that Tymoshenko's
characterization of the textual changes is largely
accurate.) Tymoshenko refused to sign the Universal;
Communist leader Symonenko "signed" it while announcing his
refusal to endorse five key paragraphs on NATO, language,
religion, land reform, and economic policy.


12. (SBU) A lengthy Our Ukraine caucus meeting to decide on
joining a new coalition forced the Rada's timetable to slip
late August 3; Socialist Tsushko predicted that the
swearing in of both Yanukovych as PM and Constitutional
Court judges would take place August 4. While Tsushko
predicted that a new Coalition of National Unity would
emerge August 4 and a full Cabinet approved in a special
Saturday session August 5, he squirmed uncomfortably when
asked about the fate of the Communists. Later Poroshenko
confirmed to the Ambassador that the OU caucus had agreed
to sign a new coalition agreement with Regions at the
Rada. According to Poroshenko, the new agreement will
include numerous elements from the Universal. When asked
by the Ambassador whether all the OU deputies would agree
to the new coalition, Poroshenko said that majority were in
favor, but one or two would probably refuse to sign and
effectively join the opposition. At this point, Poroshenko
said that Yanukovych was scheduled to be sworn in at the
Rada at 11 am on August 4. (Note: This could change
numerous times in the next few hours. end note). BYuT
deputy leader Tomenko told us that BYuT would stay out of
the Rada chamber August 4-5, returning when the Rada
reconvenes in September.


13. (C) In his conversation with the Ambassador,
Poroshenko said that the Regions-OU coalition had also
paved the way for ending the long-delayed convening of the
constitutional court. According to Poroshenko, the new
coalition would vote on the Rada's candidates for the
constitutional court at 10 am on August 4. Then the full
Rada, in the presence of the newly-elected PM, the acting
Chief Justice of the Supreme Court and probably President
Yushchenko -- would swear in all the new constitutional
court justices -- those newly nominated by the Rada and the
nominees forwarded to the Rada by Yushchenko and the
Council of Judges last November, giving the constitutional
court a quorum for the first time in nine months.
Poroshenko also noted that discussions were ongoing between
Yanukovych, Regions and OU regarding the make-up of the
Cabinet of Ministers, suggesting that lists were being
readied now in order to present to Yushchenko over the next
few days. Poroshenko predicted that a new government would
probably be voted in by the Rada by early next week. It
could not happen this week. He also suggested that as part
of the agreement on the Universal, the Rada would pass
several key pieces of legislation, including the
long-delayed approval to hold military exercises involving
foreign forces in Ukraine, before going out of session for
the rest of August.

What next? questions heading into the August vacation
-------------- --------------


14. (C) Comment: The dizzying pace of developments leaves
many loose ends as Ukraine's political elite heads into its
delayed traditional August vacation, now set to begin
August 7. Regions' preferred coalition partner all along
has been OU, given closer policy affinity on economic
issues than with the Socialists and Communists. Zvarych's
comments about a new but open coalition agreement may have
been targeted at potential BYuT businessmen defectors

KIEV 00003029 004 OF 004


rather than the Socialists; both Tymoshenko and Regions MPs
have told us recently that 50 BYuT MPs are ready to defect
to any governing coalition. Socialists like Tsushko,
however, talked as if OU would merely join a new
configuration of the existing Regions-Socialist-Communist
coalition, to be renamed the "Coalition of National
Unity." Yushchenko told Ambassador that he planned on
signing a Presidential-PM-Speaker declaration with
Yanukovych and Moroz next week that would reiterate the
unchanging nature of Ukraine's domestic and foreign policy
priorities, suggesting that trilateral cooperation will
likely continue.


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

Taylor