"A CIVILIZED DIVORCE"--BAGHDASARIAN LEAVES

C O N F I D E N T I A L SECTION 01 OF 02 YEREVAN 000662

SIPDIS

SIPDIS

DEPT FOR DAS BRYZA AND EUR/CARC, NSC FOR MERKEL

E.O. 12958: DECL: 05/12/2016
TAGS: PGOV PREL AM
SUBJECT: "A CIVILIZED DIVORCE"--BAGHDASARIAN LEAVES
GOVERNING COALITION, SET TO GIVE UP SPEAKERSHIP

REF: YEREVAN 647

Classified By: DCM A.F. Godfrey for reasons 1.4 (b, d).

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SUMMARY
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1. (C) National Assembly Speaker Artur Baghdasarian formally
announced his party's withdrawal from the governing coalition
and his intention to step down as Speaker during a press
conference May 12. His formal announcement ended intense
speculation about his falling out with President Kocharian
and his party's (Orinats Yerkir, OY) hemorrhage of nearly
half of its members in the National Assembly (NA) over the
course of the past week. Baghdasarian announced that he
would officially step down as Speaker at the opening of the
next regularly-scheduled session of the NA on May 22, with
the resignation becoming final five days later (per NA
rules). Orinats Yerkir's departure from the governing
coalition will not seriously hinder the government's ability
to push through its programs, although we expect that routine
legislative business will be slowed significantly with the
change in NA management. The likely front-runner for Speaker
is current Deputy Speaker Tigran Torosyan, a member of the
Republican Party, which would lead a minority government. We
do not expect the presidential administration's control of
key issues will be in any way hindered by these events. The
likelihood that this resignation will lead to early elections
is close to nil. End Summary.

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PULLING OUT OF THE COALITION AND STEPPING DOWN
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2. (C) In a late meeting on May 11, Orinats Yerkir's
governing board decided to leave the governing coalition in
the wake of mass defections of key party members in the
National Assembly. Referring to the decision to leave the
coalition as a "civilized divorce," Baghdasarian was at some
pains to present OY's withdrawal from the coalition as
amicable, although he also cited policy differences ranging
from foreign policy direction to economic policy to
anti-corruption efforts. Although technically Baghdasarian
would not need to step down as National Assembly Speaker, he
decided to submit his resignation on May 22. With Orinats
Yerkir's withdrawal from the governing coalition, the three
OY ministers will also need to leave their posts -- Minister
of Education Sergo Yeritsian, Minister of Culture and Youth
Affairs Gevorg Gevorgyan, and Minister of Urban Development
Aram Harutyunyan (along with top staff in each of these
ministries) will be out of jobs immediately. Minister of
Urban Development Harutyunyan attempted to save his position,
however, by leaving Orinats Yerkir in the twelve hours
between the party's decision to leave the coalition and
Baghdasarian's press conference -- whether he will be
successful at keeping his post remains to be seen.

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NEW FACES IN THE GOVERNING COALITION?
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3. (C) The two other members in the coalition, the Republican
Party (with 39 seats) and the Armenian Revolutionary Faction
(ARF) Dashnaks (with 11 seats) would no longer control an
absolute majority in the National Assembly. Together with
the People's Deputy Group (16 seats),technically not part of
the coalition, but uniformly voting with the government on
all issues, as well as with the United Labor Party (ULP, 6
seats) and other independent members of parliament (mostly
businessmen),the remaining two parties of the coalition will
still easily control the parliament. During his press
conference May 12 Baghdasarian was confident that the
governing coalition would continue to function without
Orinats Yerkir.

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NEXT SPEAKER TOROSYAN?
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4. (C) We expect that the next speaker will be the current
Deputy Speaker from the Republican Party, Tigran Torosyan.
Other potential candidates include Karen Karapetyan, leader
of the People's Deputy faction and Deputy Speaker Vahan
Hovhanissian (Dashnak). Extremely reserved with none of
Baghdasarian's charisma, Torosyan is nonetheless a
well-respected legislator, hard-working and, as the NA's

YEREVAN 00000662 002 OF 002


pointman for interaction with the Council of Europe, well
practiced in working with the West. Responding to a question
during the press conference, Baghdasarian endorsed Torosyan's
candidacy and said he would make an excellent speaker.
Torosyan strikes us as someone of integrity (he was deeply,
personally pained, for example, that "his" constitution would
be forever tainted by the problems with fraud during the
November 2005 referendum),more a technocrat than someone
with serious personal political ambitions. (Note: Although
Torosyan speaks good English, in official meetings he uses
only Armenian or Russian. End Note.)

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PRESIDENT'S OFFICE: BAGHDASARIAN ASKED TO LEAVE
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5. (C) Presidential National Security Advisor Garnik
Isaghulyan told us that President Kocharian had pushed
Baghdasarian to leave the coalition and his post as NA
Speaker during a long discussion May 11. The timing for the
Speaker's departure had also been agreed on, Isaghulyan
noted. "We expect the next speaker to be from the Republican
Party," Isaghulyan told us, claiming that the People's Deputy
Faction would "not get in the way." Baghdasarian described
the final coalition meeting, held the morning of May 12 with
the President, as a "civilized" acknowledgement that it was
time to part ways.

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COMMENT: PLUS CA CHANGE...
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6. (C) Despite the "upheaval" in the political scene, we
expect remarkably little genuine change in business as usual
in Armenia. The governing coalition retains its hold on
power, real decisions continue to be made within the walls of
the presidential administration, and the opposition still has
no traction within the general population. While
Baghdasarian has a certain degree of personal popularity, we
do not anticipate that that will be enough to make him a
serious player either before or after the next parliamentary
elections.
EVANS