UKRAINE: TYMOSHENKO ELECTED AS PM; NEW GOVERNMENT

C O N F I D E N T I A L KYIV 003086

SIPDIS

SIPDIS

E.O. 12958: DECL: 12/18/2016
TAGS: PREL PGOV PHUM UP
SUBJECT: UKRAINE: TYMOSHENKO ELECTED AS PM; NEW GOVERNMENT
TAKES OFFICE

Classified By: Polcouns Kent Logsdon for reasons 1.4(a,b,d).


1. (C) Summary: After several weeks of debate and
uncertainty, the orange coalition came together and confirmed
Yuliya Tymoshenko as the new prime minister of Ukraine on
December 18. Tymoshenko was confirmed with 226 votes, the
minimum number of votes necessary in the 450-member Rada.
Only MPs from Tymoshenko's BYuT and Our Ukraine-People's Self
Defense (OU-PSD) participated in the vote; MPs from Regions,
the Communists, and Lytvyn Bloc attended the session, but did
not register or participate in any votes. Using a
complicated "roll call" system for all of the votes, the Rada
also dismissed Acting PM Yanukovych and his cabinet, and then
elected a new Cabinet of Ministers (see paragraph 9 below).
Up to the moment of the PM vote, there was uncertainty within
the coalition about whether or not Tymoshenko would have the
votes, with former PM Yekhanurov telling the press before the
vote that he would not support Tymoshenko unless the full
government slate was agreed and OU-PSD deputy Spodarenko
unable to leave his hospital bed.


2. (C) Comment: The nail-biter successful vote for
Tymoshenko ended the speculation that President Yushchenko
did not want to see Tymoshenko regain the PM job (he fired
her from the position in September 2005 after just eight
months on the job),but it remains unclear how stable the new
coalition will be. Tymoshenko is expected to hold her first
cabinet meeting on December 19; the Rada will return to the
important work of electing two deputy speakers (at least one
of whom is traditionally from the opposition) and
distributing all-important committee chairmanships. Former
PM Yanukovych, now leader of the opposition, offered a bitter
farewell message that started off with positive words about a
change in government, but then recalled Tymoshenko's past
government in negative terms, and predicted hard times ahead
for the country under her renewed leadership. We will meet
with the PM and members of the new government in the coming
days to talk about key issues in the bilateral relationship;
senior-level congratulatory calls to the new PM and her
government will be well-appreciated and help underscore the
need to leave the politicking behind and to get back to
business. End Summary and Comment.

Tymoshenko Gets the Votes - a Nail-Biter
--------------

3. (C) Just minutes before the Rada opened its December 18
session, with the vote for the prime minister first up on the
agenda, much of the orange coalition was nearly in panic.
Former PM Yekhanurov, the President's candidate to be the
next defense minister and widely considered to be
representing Yushchenko within the OU-PSD faction, announced
to the press that he planned to vote against Tymoshenko's
candidacy as Prime Minister unless there was a final
agreement on the slate of new ministers. The composition of
the cabinet has been the subject of much internal dissension
within OU-PSD over the past week. The Rada opened on time,
and then went immediately into recess for 30 minutes for
consultations in order to ensure that the orange coalition
had at least 226 MPs in their seats and ready to vote.


4. (SBU) When the Rada reconvened, Speaker Yatsenyuk laid
out the agreed plan of conducting votes -- first for the PM,
then for dismissing Acting PM Yanukovych and the current
cabinet, and finally electing a new government. At the
request of 150 faction members, the Speaker had agreed to
conduct the vote by a show of hands/roll call method rather
than using the electronic voting system. The Rada's counting
commission, normally formed only to count the votes from the
secret ballot for speaker and deputy speakers, was called

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into action to conduct the vote. Although present in the
Rada chamber, MPs from the Party of Regions, the Communists,
and Lytvyn Bloc chose not to register and therefore, were not
able to vote or to ask questions or make comments from the
floor. Tymoshenko was invited to the podium to present her
candidacy; Yatsenyuk read a letter from President Yushchenko
introducing her candidacy and then Tymoshenko made a few
short remarks, promising a strong, unified, and
reform-oriented government, which she contrasted with a
Yanukovych Cabinet she termed corrupt.


5. (C) Prior to the roll call vote, Yatsenyuk asked the
deputies to register -- there were 227 MPs registered in the
hall, including all members of BYuT and all but one member of
OU-PSD (including former NSDC secretary Plyushch who has not
signed the coalition agreement),Ivan Spodarenko who is in
the hospital, suffering from a heart attack and stroke.
(Embassy Note. OU-PSD deputies told us that there was an
effort to bring Spodarenko to the Rada since he had come to
participate in the successful vote for the Speaker, but he
was too ill to move. End Note.) The head of the counting

commission then read aloud the names of every BYuT and then
every OU-PSD MP so that each could say "Za" (for) or "Proti"
(against). After all the BYuT MPs voted "Za," tension in the
hall mounted as the roll call began for OU-PSD.

6. (C) As the vote was being conducted, negotiations
continued between coalition heavyweights, with Yekhanurov and
Tymoshenko engaged in a heated conversation in the back of
the hall. A short time later, the two held a second,
considerably more relaxed conversation. Finally, Yekhanurov
withdrew to the back of the chamber to take a phone call,
widely-believed to have come from the President or someone in
his entourage, and then returned to vote for Tymoshenko.
After Yekhanurov (who was about 1/4 of the way down the
alphabetical list) voted "Za," an audible sigh of relief
rolled through the coalition ranks and the vote continued
without incident. Plyushch, as expected, abstained, and with
the absence of Spodarenko, Tymoshenko got 226 votes, the bare
minimum needed to be elected. Tymoshenko looked visibly
relieved and after the counting commission announced the
official result, Tymoshenko was escorted to the PM's chair in
the Rada.

Yanukovych - A Bitter Farewell
--------------

7. (C) Former PM Yanukovych was then invited to the rostrum
to make farewell remarks, prior to the vote for his
dismissal. For the first part of his speech, he read a
conciliatory note of congratulations to the new government.
He then closed his notes and engaged in another 11 and a half
minutes (in what should have been a five-minute speech) of
vituperative attacks on Tymoshenko and the orange coalition.
He said that when he came to office in August 2006, he had to
deal with the consequences of instability left by the
previous orange governments, and he was saddened to see he
had to return power to those same, irresponsible people.
According to Yanukovych, the new government augured increased
political instability and a slow-down in social and economic
development. He accused the 2005 Tymoshenko government of
engaging in political persecution of its opponents and
widescale reprivatization in favor of its allies. Yanukovych
said a 226-member majority was inherently ineffective.
Tymoshenko, he noted, had come back to power on the back of
an array of social promises that she had no intention of
keeping. Food prices will rise and Ukraine's image
internationally will suffer, he warned. The orange team,
Yanukovych said, was ready for bloodshed and civil war, and
only Regions' agreement to hold the September pre-term Rada
elections had prevented such an outcome. In closing, he said
that Regions supports the President and the Rada, and will be
a constructive opposition, but will stop the government from
destroying the economy and hurting the working class with
populist policies.


8. (C) After cheers from the Regions' benches for Yanukovych
subsided, Yatsenyuk followed with more gracious comments,
thanking Yanukovych and his Cabinet for all their hard work
for the people of Ukraine. He also noted that this was
Ukraine's first democratic, transparent transition of power.
(Embassy note: By our count, this would be the second
democratic parliamentary transition following the March 2006
elections. End note.) Yanukovych then left the hall. Once
it was clear that the next vote would be a successful motion
to dismiss Yanukovych as Prime Minister -- an act required by
the controversial CabMin law, but not the Constitution, but
deemed necessary by the Coordinating Council -- the entire
Regions faction walked out, boycotting the rest of the day.
However, members of the Lytvyn Bloc and Communist Party
remained in their seats.

New Government a Mix of Old and New, Rada MPs and Outsiders
-------------- --------------


9. (U) After successful roll call votes were taken to
dismiss acting PM Yanukovych and the current cabinet, Speaker
Yatsenyuk invited Tymoshenko back to the podium to introduce
the candidates for her cabinet. After introductions were
made, a final roll call vote for the day was held, and the
new cabinet was approved by 227 votes, including a "Za" vote
from Plyushch announced to applause and an ovation from the
coalition. The new cabinet list is as follows:

First Deputy Prime Minister - Oleksandr Turchynov (BYuT)
Deputy Prime Minister (Humanitarian Affairs) - Ivan Vasyunyk
(OU-PSD)
Deputy Prime Minister (Euro-integration) - Hryhoriy Nemiriya
(BYuT)
Foreign Affairs - Volodymyr Ohryzko (President)
Defense - Yuriy Yekhanurov (President)
Interior - Yuriy Lutsenko (OU-PSD)
Education - Ivan Vakarchuk (OU-PSD)

Transportation - Iosip Vinskiy (BYuT)
Culture - Vasyl Vovkun (OU-PSD)
Economy - Bohdan Danylyshyn (BYuT)
Social Policy and Labor - Lyudmila Denysova (BYuT)
Health - Vasyl Knyazevych (OU-PSD)
Cabinet of Ministers - Petro Krupko (BYuT)
Regional Development and Building - Vasyl Kuybida (OU-PSD)
Communal Services - Oleksiy Kucherenko (BYuT)
Agriculture - Yuriy Melnyk (OU-PSD)
Industrial Policy - Volodymyr Novytskiy (BYuT)
Justice - Mykola Onishchuk (OU-PSD)
Family, Youth and Sports - Yuriy Pavlenko (OU-PSD)
Finance - Viktor Pynzenyk (BYuT)
Coal Industry - Viktor Poltavets (BYuT)
Fuel and Energy - Yuriy Prodan (BYuT)
Environment - Hryhoriy Filipchuk (OU-PSD)
Emergency Situations - Volodymyr Shandra (OU-PSD)


10. (C) There is still an empty slot for a third deputy
prime minister, who will be responsible for regional policy.
It was intended for Vinskiy (BYuT),but he was moved to
Transportation, with rumors circulating that OU-PSD MP
Matviyenko is lobbying heavily for the position. Per the
coalition agreement, BYuT and OU-PSD agreed to split the
cabinet positions 50/50, with OU-PSD concentrating on
national security, foreign affairs, and social policies (not
coincidentally the President's priorities) and BYuT ending up
with the bulk of economic-related ministries. The battle
over the cabinet that has raged within OU-PSD for the past
week nearly scuttled the entire PM vote as faction members
expressed dissatisfaction with several of the choices
reportedly made by President Yushchenko. Most discussed were
the President's candidates to be the Education, Justice, and
Agriculture Ministers, as well as the President's decision to
summarily fire long-time loyalist Anatoliy Hrytsenko as
Defense Minister and replace him with former Prime Minister
Yekhanurov, who up until now has shown no particular interest
in military affairs. Many OU-PSD MPs expressed to us
dissatisfaction that MPs who originally opposed Tymoshenko as
PM -- Yekhanurov and Onishchuk -- should be rewarded with
Cabinet positions. Moreover, Presidential Secretariat Chief
Baloha had tried to install an old friend Vasyl Kremen as
Education Minister, despite Kremen's blatant abuse of office
as Minister of Education in 2004 campaigning for Yanukovych
for President.


11. (C) Comment. The new Cabinet is a mix of seasoned
politicians and technocratic experts. Nearly half are from
western Ukraine, although Donetsk, Luhansk, Dnipropetrovsk
and Crimea are all represented. Tymoshenko has key allies in
the government -- Turchynov, Vinskiy, and Pynzenyk ; so does
Yushchenko -- Yekhanurov, Pavlenko, Lutsenko, and Shandra.
According to the short bios Tymoshenko read for each nominee,
a number of ministers, including Education, Coal, Social
Policy, and Health, are experts in their fields; however,
some in the Rada expressed concern to us that these experts
had little government experience. Most coalition MPs view
Yekhanurov as a bad fit for the Defense Ministry and believe
he is there to serve as a thorn in Tymoshenko's side. Melnyk
will also remain a controversial figure; although previously
a member of OU-PSD constituent party Ukrainian People's
Party, his willingness to stay in the Yanukovych government
under the Communist quota and his corrupt ties to the poultry
industry make him very unpopular within the orange coalition
and suggest he was placed there by the Presidential
Secretariat. (Bio notes and additional details on the new

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ministers will follow septel.)


12. (U) Visit Embassy Kyiv's classified website:
www.state.sgov.gov/p/eur/kiev.
Taylor