UKRAINE: ELECTION DATE HOLDING UP COMPROMISE

C O N F I D E N T I A L SECTION 01 OF 04 KYIV 001088 SIPDIS SIPDIS E.O. 12958: DECL: 05/08/2017 TAGS: PGOV PREL UP SUBJECT: UKRAINE: ELECTION DATE HOLDING UP COMPROMISE KYIV 00001088 001.2 OF 004 Classified By: Ambassador for reasons 1.4(a,b,d). ¶1. (C) Summary. Negotiations may be almost complete on the "small package" of laws considered necessary to resolve Ukraine's six-week political crisis, but continued wrangling over whether the elections should be held in the summer or fall have slowed the pace of compromise. The working group named May 4 by President Yushchenko and Prime Minister Yanukovych to finalize the details of the political compromise was originally scheduled to complete its task by May 7, according to the President at his May 4 press conference, in order to present the agreement to the Rada for a vote on May 8. After the two sides held separate working group meetings and coalition leaders grandstanded at public hearings on new elections on the morning of May 7, the working group reconvened that evening, but was unable to reach a final agreement. National Security and Defense Secretary Haiduk confirmed to the Ambassador May 8 that he SIPDIS had been meeting quietly with Regions financier Akhmetov, his former business partner, and it was agreed that big business wanted the situation resolved quickly. Negotiators for the President have reported that the group had finished almost all its work, but both sides signaled that there remained a key disagreement over when the elections should take place. ¶2. (C) Comment. The key question on everyone's mind is why Yanukovych finally agreed to new elections, with several explanations most likely factoring into the equation. The first is that Yushchenko and Presidential Chief of Staff Baloha may have offered Yanukovych, assuming Regions wins a plurality again as expected, the first opportunity to form a new government, possibly even offering him support to be PM again. Haiduk's comments would suggest that Akhmetov and the business wing of Regions may also have been pressuring the PM to resolve the political standoff before it led to economic complications. Finally, Haiduk and political observers from several political camps expressed the view that Yushchenko's decision to fire two Constitutional Court Judges on April 30 and May 1 was enough to throw the outcome of the Court case on dismissing the Rada into doubt and convince Yanukovych he was better off cutting a deal. The PM's unexpected decision to leave the country on May 8--he flew to Spain for knee surgery and has not announced a return date--suggested that he is trying to drag out negotiations in hopes of gaining a better deal in terms of an election date. Suggestions by coalition MPs that constitutional and legal activity pertinent to the election will take several months also seems to be a negotiation tactic to strengthen their hand. End summary and comment. Negotiations Nearing Completion, but Stalled -------------- ¶3. (SBU) First Deputy Head of the Presidential Secretariat Vasyunyk told the press that Yushchenko's plan was to suspend the part of his April 26 decree that terminated the Rada's powers immediately upon conclusion of an agreement on a date for early elections. This would allow the Rada to return to work and pass a "small packet" of legislation being put together by the working group. Vasyunyk said Yushchenko would do this to ensure that all Rada decisions going forward are seen as "legitimate". Vasyunyk also said that they were 80-85 percent done with the legislative packet and he thought they could be finished by May 10, the deadline that Yushchenko has given for the working group to finish. If they do not meet the deadline, according to Vasyunyk, the President will "make appropriate decisions." ¶4. (SBU) Despite Yushchenko's announcement on May 4 that the working group would be finished with the legislative package by Monday May 7, disputes have centered around when the election would happen. In addition, public posturing by all participants to gain negotiation leverage had slowed the pace of progress. Tymoshenko's second-in-command Turchynov told the press that Communist representative at the talks, First Deputy Rada Speaker Martynyuk, was being especially obstructionist and Regions was trying to use this to its advantage. He also called for the Communists and Socialists to be expelled from negotiations. Turchynov speculated in the press that Regions was okay with their coalition partners' intransigence because it bought time for them to push their agenda, namely pushing the date of the election to the fall. Haiduk: Compromise Will Be Soon, Big Business Wants a Deal -------------- -------------- ¶5. (C) During a May 8 meeting with the Ambassador, NSDC Secretary Haiduk was upbeat that a final agreement between SIPDIS the President and PM would be achieved "within a day or two," referring to Communist and Socialist party objections and public statements as pre-election campaign posturing. He KYIV 00001088 002.2 OF 004 said that this agreement would include both a date for early elections and a package of the legislative actions that would be taken by the current Rada. With regard to a date, Haiduk acknowledged that the two sides were still talking about different time frames--the opposition was pushing for July and the government for the fall. On legislative actions, Haiduk noted that that Yushchenko wanted a number of laws to be adopted. However, the President was willing to put some aside (e.g. amendments to the CabMin law and adoption of legislation containing the key provisions of the Universal) and concentrate on a "small package" that would include only legislation needed to hold pre-term elections. Specifically this package would include amendments to the Law on Elections (to configure the law with the declared timeframe for the elections),the Law on Rada Deputies (to deal with imperative mandate),and the Law on the State Budget (to ensure financing for pre-term elections). Haiduk acknowledged that adoption of the "small package" would not fix the fundamental contradictions/gaps in the constitution, but expressed hope that the next government would take action to correct these. Yushchenko reiterated the same position on "large" vs. "small" packages in a May 8 speech in Vinnitsya--he would rather have the former, but could live with the latter. ¶6. (C) Although downplaying his role in ongoing negotiations, Haiduk confirmed to the Ambassador that he has been meeting quietly with Regions financier Rinat Akhmetov to bridge the gap between the President and PM teams. (Note: Akhmetov and Haiduk were business partners in Donetsk until 2002-2003, when they split their interests into two companies. It appears that a Haiduk-Akhmetov meeting may have set the stage for the May 4 Yushchenko-Yanukovych announcement of a deal in principle on early elections. End Note.) Haiduk acknowledged that Ukrainian big business was eager to get this crisis behind them and that all they wanted were clear established rules so that they could use their brains to make money; they did not want to have to wonder each day whether the President and the Prime Minister were "in a good mood." Haiduk denied rumors that there were ongoing discussions about a possible presidential decision to impose a state of emergency, acknowledging that there were radicals within the opposition who wanted "everything all at once" but flatly stating that this was not under consideration. He said that he and DPM Radchenko (in charge of the law enforcement and security portfolios at CabMin) continued to work together to ensure continued coordination in responding to street demonstrations and protests. Election Date is Sticking Point -------------- ¶7. (SBU) Yanukovych and Regions faction leader Bohatyreva stated publicly May 7 and 8 that the fall was a better time to hold the new election. Bohatyreva argued that constitutional changes were necessary and that late October/early November would be the optimal time for new elections. She also said that the coalition favored finishing the new voter registry, which would not be done until October. (Note. The Cabinet allocated UAH 127 million for the new voter registry on May 3. End note.) Regions MP German suggested October 14 in the press and another Regions MP, Yuriy Miroshnychenko told us that the fall was best. BYuT MP Vydrin told us that also he thought fall was the most likely, but no later than October 14, he explained, because Regions needed to get the election done before heating season begins in Ukraine (October 15),in case there are problems with it. ¶8. (SBU) Opposition negotiators insisted that mid-July was the latest elections could take place. OU leader Kyrylenko and Turchynov said the opposition will accept a new vote no later than July 8 and would hold the election without coalition participation if need be. Without issuing a similar ultimatum, Yushchenko said in his May 8 Vinnitsya speech that there was no need to prolong the political crisis for another seven or eight months, when the elections could easily be held in July. Stalling for Time? -------------- ¶9. (C) In a surprising move, immediately after meeting with Yushchenko, Yanukovych flew to Spain on May 8 for surgery on his knee. This trip removes him from direct participation in negotiations and could be an effort to drag out negotiations and part of an effort to push the elections to the fall. Press reports said he might return on May 9 or 10, but the CabMin said it could not confirm a return date. What Did Yanukovych Get? -------------- KYIV 00001088 003.2 OF 004 ¶10. (C) One of the key points of speculation has been what Yanukovych personally and Regions in general got for agreeing to new parliamentary elections. One of the most commonly-voiced guesses is that the PM was given an assurance from Yushchenko that Regions would get the first chance to form the new government after the elections -- or perhaps even a promise that Yanukovych would be named Prime Minister again. Chaliy told Ambassador that part of the May 4 agreement was that first political force past the post would have first opportunity to form government and that a broad coalition was very possible, although he did not specify who would be in the coalition. Segodnya, a newspaper owned by Regions financier Akhmetov, on May 5 quoted a Regions source as saying that Yushchenko "promised too much" to the PM, and may have agreed to form a Regions-OU coalition after the election with Yanukovych as PM. ¶12. (C) Haiduk and Ukrainska Pravda journalist Serhiy Leshchenko told us privately, and Mykhayklo Pohrebinskiy a political analysts associated with Viktor Medvedchuk and SDPU(O),echoed publicly, that they believed that Yanukovych capitulated because Yushchenko fired Constitutional Court Judges Stanik and Pshenychniy. In their view, once Yanukovych began to doubt that the Court would have enough votes to rule against the President's decree, he decided to cut a political deal. Rada Still Operating at Half Capacity -------------- ¶13. (SBU) Just as Moroz had promised, the Rada opened on May 8 -- and the opposition stayed away. (Note. Although 262 MPs were registered in the hall, there were clearly quite a few Regions MPs missing too). While comments from the floor were mostly related to upcoming Victory Day issues, comments in the halls suggested that MPs are focused on the working group, although they did not always seemed informed about progress. ¶14. (C) Regions firebrand MP Miroshnychenko told us May 8 that Yushchenko and Yanukovych had made a strategic decision--to hold new elections--and sent a signal to the Rada, but it was the parliament that needed to work out all the details of the compromise. There were two points left in the working group's negotiations--the date of the elections and the legal basis for the elections. In terms of the latter, the Rada coalition was proposing two changes to Article 90 in the constitution--to allow the Rada to vote dismiss itself and to make a lack of quorum (although he did not specify for how long) an automatic reason for dismissal of the Rada. Socialist faction leader Bokiy echoed the need for constitutional changes before holding an election, which would require two Rada votes in two sessions, meaning the earliest an election could be held would be early October. Miroshnychenko said that there has been no discussion of the Socialists joining Regions' list in a new election. (Embassy Note. An agreement that required a constitutional change would clearly drag on for months, and ensure that pre-term elections did not happen any time soon. End Note.) Right Facing Problems in Forming Bloc -------------- ¶15. (C) The right and right-center, reform-oriented parties are still trying to form an election bloc, but progress has stalled as major figures argue over positions on the election list. Eight-sided talks were conducted May 7 between Our Ukraine constituent parties--People's Union Our Ukraine, Christian Democratic Union, and Congress of Ukrainian Nationalists--Forward Ukraine, the party affiliated with Lutsenko's People's Self-Defense Movement, the new Ukrainska Pravytsia--Rukh, the Ukrainian People's Party, and Sobor--and the youth party Pora. Disagreements remained however, as People's Self-Defense and Ukrainska Pravytsia each demanded 30 percent of spots on the list and OU resisted the proposal. This has been the struggle for several weeks now as all parties say they want cooperation and unity, but OU has not wanted to give enough positions to other parties to satisfy them. ¶16. (C) In addition, distrust over rumors about the deal are exacerbating problems within Yushchenko's camp. Lutsenko demanded publicly on May 8 that leaders of OU and BYuT sign a written agreement that there will not be a broad coalition with Regions after the elections. (Comment: Not only will a partnership with Regions be difficult for Lutsenko and Tarasyuk on an ideological level, but the personal nature of the attacks by the current coalition against these two former Yushchenko ministers will make broad cooperation a hard sell and could undermine any deal that Yushchenko and Yanukovych KYIV 00001088 004.2 OF 004 have made, although this all would not unravel until after the elections. End comment.) ¶17. (U) Visit Embassy Kyiv's classified website: www.state.sgov.gov/p/eur/kiev. Taylor