UKRAINE: YANUKOVYCH AND TYMOSHENKO WAIT FOR

C O N F I D E N T I A L SECTION 01 OF 04 KYIV 002713 SIPDIS SIPDIS E.O. 12958: DECL: 10/26/2017 TAGS: PGOV PREL UP SUBJECT: UKRAINE: YANUKOVYCH AND TYMOSHENKO WAIT FOR YUSHCHENKO; COURT CLEARS WAY FOR FINAL ELECTION RESULTS Classified By: Ambassador, reason 1.4 (b,d) ¶1. (C) Summary and Comment: PM Yanukovych and his potential successor, Yuliya Tymoshenko, met separately October 24-26 with Colin Powell and Richard Holbrooke, both of whom were in Kyiv to deliver speeches at the invitation of the Pinchuk Foundation, established by businessman and Kuchma son-in-law Viktor Pinchuk. The conversations all reflected the waiting game going on in Kyiv, with both Yanukovych and Tymoshenko keenly aware that at this point, the next step in coalition building must be President Yushchenko's. Yanukovych attempted to portray a good working relationship with Yushchenko, arguing that the two of them shared a common vision for the future -- constitutional reform and the need for a clear division of power. The PM acknowledged that politically, Yushchenko had no choice but to support an orange coalition, but argued that a Tymoshenko-led government was sure to fail, sooner or later, leading to a broad coalition with the Party of Regions. Until then, Regions would work in constructive opposition. Tymoshenko underlined that her assumption of the PM slot was not a done deal, comparing the current situation with the "wasted opportunities" following the 2004 and 2006 elections and worrying that Yushchenko might not even support an orange coalition. She further noted that the last three elections had underlined Ukraine's support of integration into the West, adding that resolution of energy issues with Russia would have to be tackled first by a new government before consideration of a way forward toward NATO membership. Yanukovych speechwriter and Regions MP Hanna Herman told us that they were exploring several ways to cooperate with Our Ukraine-People's Self-Defense without a formal coalition. End Summary. ¶2. (SBU) In other election-related news, the High Administrative Court ruled at 11:15 pm on October 25, just 45 minutes before its five-day timeline for deciding the case expired, that the Central Election Commission had not violated election laws. The five political parties who brought suits can only appeal to the Supreme Court if they could show that the CEC or Administrative Court had violated human or citizen rights, which is unlikely. Deputy CEC Chairman Usenko-Chorno announced that the CEC will review its �A;paperwork one last time and the election results will be published in government papers Holos Ukrainy and Uradoviy Kuryer on October 27. The promulgation of the results will start new clocks, with the preparatory committee for the new Rada expected to convene within 10 days and the Rada being required to open within 30 dates of the promulgation. If they stick to the schedule, the Rada should open by November 26, although the President and members of the orange team have called for it to convene sooner. Yanukovych - I Have Good Relations with the President -------------- -------------- ¶3. (C) Although carefully prefacing his comments with a note that the Party of Regions had won the September 30 elections, the PM told both Powell and Holbrooke that since no one side had an advantage, this had made coalition negotiations particularly difficult. In his meeting with Powell, the PM indicated that this opened the door to setting up an immediate "coalition of national unity" (with Our Ukraine-People's Self Defense) in order to stabilize the political situation for many years. With Holbrooke, the PM acknowledged that this process would be slightly more complicated. The election results made an orange coalition "theoretically possible;" however, in the PM's view, Yushchenko was very aware that an orange coalition would be unstable. Nevertheless, Yushchenko politically "had to be on the orange side" and, according to Yanukovych, Regions understands this. However, on the other hand, the participants in both the OU-PSD and BYuT blocs have more potential internal conflicts than the number of conflicts that exist between Yanukovych and Yushchenko. The PM noted that "Yushchenko knows this, but he does not want to be the reason for not establishing the orange coalition." ¶4. (C) As a result, in the PM's view, Yushchenko wants to "give them a chance to do it." However, Regions was convinced that an orange coalition would not happen -- or would not survive for long -- and the President was also aware of this point of view. As a result, Yanukovych was confident that Regions would soon participate in formal negotiations with Our Ukraine regarding the creation of a coalition that would be more stable and allow the country to continue to develop in a more stable environment. The economy had been developing well -- a stable environment would allow Ukraine to attract more foreign investment. Yanukovych argued that Regions and Our Ukraine were "very KYIV 00002713 002 OF 004 close" to joining forces. However, if that did not happen, Yanukovych said that Regions would work in the opposition in parliament. He argued that there was "nothing negative about this" and that the party was ready. If the Party of Regions was in opposition, Yanukovych argued that the party would be a constructive opposition, joining in with the government in areas of agreement and working as partners for the national interest. He noted that there was a big part of the Regions' faction who wanted to sit back and give Tymoshenko and BYuT a chance to comply with all of the promises made during the campaign that could not be complied with and then watch her fail. ¶5. (C) In both meetings, Yanukovych went to great lengths to talk about his shared point of view with President Yushchenko, their agreement on 90 percent of all policy issues, and the great potential for the two of them to work as partners. He argued that he and the President were the two key political leaders in the country, and carefully avoided mentioning Yuliya Tymoshenko. The main goal for 2008 was to agree on a new constitution and a clear division of powers. The PM also mentioned the idea of reaching some kind of political "constitutional agreement" that might be concluded while the politicians worked on a new constitution (see section on Herman below). To Powell, Yanukovych argued that he and Yushchenko made a good team -- "I am not a humanitarian like he is; he is not a strong manager like I am." He also described himself as a representative of the east, with Yushchenko as a representative of the west -- and by uniting, the two could unite the country. To Holbrooke, he acknowledged that their relations over the past year "could have been better," but since 2005 the level of mistrust between them has decreased and they have become partners. With regard to relations with Russia, they were on the same page -- they needed to protect Ukrainian national interests, but that good relations were key -- in fact, unavoidable as a neighbor who was engaged in 30% of Ukrainian international trade. The PM recalled that after the 2006 elections, he had offered Yushchenko a partnership and a broad coalition, even placing Our Ukraine ministers in his government. In spite of the President's agreement to sign a formal coalition agreement after the August 2006 holidays, this had not happened primarily due to the internal conflicts within the large and disparate Our Ukraine bloc. ¶6. (C) Yanukovych told both Powell and Holbrooke that the Party of Regions was committed to Europe and eventual membership in the European Union. However, with regard to Ukraine's relationship with NATO, Yanukovych said that his government had made progress in calming popular fears about membership -- something that former Foreign Minister Tarasyuk had whipped up by telling people that Ukraine would join the EU and NATO tomorrow. Instead, the Yanukovych Government had taken a pragmatic and moderate approach to NATO, primarily because Regions "represented that part of society that wants pragmatism in these relations." When asked about his attitude toward NATO, the PM said that he always responded that Ukraine could not afford to ignore an organization that provided security for all of Europe; cooperation was necessary. Regions had a dialogue with Ukrainians who didn't want Ukraine to have a dialogue with NATO. By doing this, Regions was keeping this part of the population engaged in the discussion and stopping the "radicalization" of the issue by left-wing parties and others. Tymoshenko - Not my Job Yet -------------- ¶7. (C) In both her meetings, Yuliya Tymoshenko said that she and her party were ready to lead and that they were ready for their "third chance." Noting that the same infighting that doomed the orange coalition following the 2004 and 2006 elections was again occurring, she worried about problems within the "democratic forces." Tymoshenko told Holbrooke that her party has accepted all of "their" demands (a reference to OU and the President),and that although there are new demands each day, she will accept them all. It was important that her party not be the cause of failure this time. She told Powell that she saw a "small chance" of becoming PM, but said that her path forward was being blocked by "powerful forces with powerful economic interests." Tymoshenko was more direct with Holbrooke, saying that people around Yushchenko did not want an orange coalition to succeed. She confided later that she was particularly worried about Presidential Chief of Staff Baloha. When Holbrooke asked whether Yushchenko and Tymoshenko were now working well together, she noted that "nothing has changed. They treat us as enemies, but now that we have 30% of the vote, things are different." Unfortunately, according to Tymoshenko, 30% was not enough to rule alone and therefore, a KYIV 00002713 003 OF 004 coalition agreement was needed. Tymoshenko said that Yushchenko had two options -- to limit BYuT in the coalition, or to not let BYuT in at all. She said that many in her faction during the negotiations with Yushchenko had urged her to stop because this was political suicide. However, in her view, she had "no right" to quit. ¶8. (C) According to Tymoshenko, the President may himself not even support an orange coalition. In her view, Yushchenko would prefer to establish a coalition with Yanukovych, but he was not free to do so. If it weren't for the 15% of the people in the country who voted for him, he would already be in a broad coalition. In Tymoshenko's view, this was not an ideological issue, but a matter of presidential campaign politics that would start next year. She had already told the President that they could unite and that she would not run against him for President. In fact, she would support him. When Holbrooke asked whether it might be better for her presidential aspirations to remain in opposition, Tymoshenko agreed that this could be advantageous politically, but that this would not be good for the country. She argued to Powell that any broad coalition (to include Regions) would be a "step backwards and a step towards Russia" which would go against the voters' choice in the past three elections for orange and for integration into the West. According to Tymoshenko, the Russians had already tried to take control of Ukraine's energy systems and bankrupt the gas transportation system and interfered in "tens of other spheres." She told Holbrooke that two or three more years of Yanukovych would put threaten both Ukraine's energy security and its political independence. In particular, she was worried that a broad coalition would focus on revising the constitution -- and since Yushchenko could not be popularly elected again as president, he would choose a variant of election by the Rada and "all would be lost." ¶9. (C) Tymoshenko recalled those who had criticized her anti-corruption campaign during her previous stint as PM, noting that Ukrainian business unfortunately still ran primarily "through the back door." She agreed with Powell that providing stability for foreign investors was a key priority, underlining that she would work to create an open and transparent system that treated domestic and foreign investors equally. She told Holbrooke that corruption is "in the air that our businessmen breathe" and that her efforts last time around as PM to establish rules and competition were criticized. ¶10. (C) Tymoshenko highlighted increased engagement on the Transnistria issue as a priority issue for Ukraine. Regarding NATO, Tymoshenko indicated that she would proceed carefully, focusing initially on increased funding for an effective public information campaign and engaging personally on the issue. She indicated that responsibility for NATO issues had been placed at the FM level by the current government, which did not provide sufficient energy/weight behind the issue. Hryhoriy Nemyria, Tymoshenko's primary foreign policy advisor, had earlier told Powell that Yushchenko's attempt to have Tymoshenko sign a letter supporting a push for a NATO Membership Action Plan (MAP) at the April 2008 Summit was a non-starter. Regions would "jump on this and make her a scapegoat", and it would also limit her operating room in trying to reach a settlement with Russia on gas/energy issues. Tymoshenko told Holbrooke that she wanted normal relations with Russia, but on equal terms. The goal for her government was EU integration. She said a strategy was needed for EU and NATO; Ukrainian society was radically split and she envied Poland because there it did not matter who the elected leader was -- they were all committed to Europe. 11 (C) Discussion also focused on Tymoshenko's announced goal of eliminating conscription and shifting to a professional armed forces in 2008. Reflecting the sharp criticism she has received on this issue, Tymoshenko noted that her proposal had been a starting point and that she was open to discussion and compromise. She noted that annual conscription levels remained at 40 thousand per year, but that only three months of training was provided to inductees which reduced them to "nothing more than free manual labor." Powell described his personal experiences regarding the post-Vietnam shift to a professional military in the U.S., underlining the sharp increase in costs associated with competing for recruits in an open labor market. Hanna Herman: OU Will Be With Regions One Way or Another -------------- -------------- ¶12. (C) Regions MP Hanna Herman, who is close to Yanukovych and writes many of the PM's speeches, told us October 27 that KYIV 00002713 004 OF 004 there were several paths to cooperation between Regions and OU-PSD. One would be that Tymoshenko will be confirmed, but her government will collapse within the first few months of 2008, leading to a broad coalition. A second way would be a "situational majority," where they would come together on votes without signing a formal coalition agreement. The third option, which Yanukovych is now discussing with Yushchenko, would be a "constitutional agreement" (mentioned above). Although Herman was somewhat cagey about the details, the two Viktors would agree to suspend or cancel the current constitution while a new one was being written. This would remove the requirement that there be a formal coalition and it would leave some form of the Yanukovych government in place temporarily. (Note. Presumably this scenario would see OU-PSD members take some Cabinet positions. End note.) ¶13. (C) Herman argued that any form of cooperation between Regions and OU-PSD would be good for the country and they would get a lot done. For example, she said, they could quietly change the public's views on NATO by improving standards in the military to NATO levels and use that success as a concrete example of why NATO was good. That, she argued, was a far more effective method than Tarasyuk's aggressive tactics. Herman thought that as a first show of good faith, the Rada should vote on a bill making it a crime to deny the 1934-35 Holodomor famine. (Note. This has long been a desire of Yushchenko's. End note.) Such steps would help reconcile the public to the idea of a broad coalition. Herman said that she did not think there would be any balking within OU-PSD about this plan -- they would go along with whatever the plan turned out to be. ¶14. (U) Visit Embassy Kyiv's classified website: www.state.sgov.gov/p/eur/kiev. Taylor