UKRAINE: PRESIDENT YUSHCHENKO FEELING CONFIDENT

C O N F I D E N T I A L SECTION 01 OF 04 KYIV 000102 SIPDIS SIPDIS E.O. 12958: DECL: 01/17/2017 TAGS: PGOV PREL PINR UP SUBJECT: UKRAINE: PRESIDENT YUSHCHENKO FEELING CONFIDENT REF: KYIV 00034 Classified By: Ambassador for reasons 1.4(b,d). ¶1. (C) Summary. With an eye toward reelection in early 2010, President Yushchenko is asserting himself more confidently now with coalition partner Tymoshenko as Prime Minister than he did when faced with Yanukovych. The President has issued numerous public statements instructing the government on how to act and what to focus on and taking credit for activities that Tymoshenko initiated. He has much more contact with the Cabinet and Rada than he did under the Anti-Crisis Coalition. Yushchenko also has submitted a laundry list of legislation to the Rada -- he has 17 bills earmarked as "urgent" -- many of which are needed, some of which would increase his power. In particular, his amended law on the Cabinet of Ministers would correct some conflicts with the constitution, but would also water down some of the Prime Minister's powers -- to the benefit of the President, but also to the benefit of individual ministers and regional government. Yushchenko also submitted bills to give him more discretion over Constitutional Court judge appointments and to subordinate the Interior Minister's troops directly under himself, albeit with the new name National Guard. He has instituted a weekly meeting with the PM and Speaker, and also convened a regular meeting of ministers and Rada deputies belonging to his bloc to ensure loyalty. For the most part, PM Tymoshenko's response to this newly-assertive Yushchenko has been measured and cautious, maintaining a publicly supportive attitude for all of the President's initiatives. However, some cracks have appeared inside the coalition, particularly within the President's Our-Ukraine People's Self Defense, which the President will have to watch closely. ¶2. (C) Comment. Yushchenko clearly learned from his losing battles with Yanukovych that he has to come off strong from the beginning. He may be hoping to reinvent his image as that of a strong leader and take credit for any Tymoshenko government achievements, while trying to contain the active Prime Minister. In part, Tymoshenko's caution and dependence on Yushchenko to keep Our Ukraine-People's Self Defense in the coalition, and Rada Speaker Yatsenyuk's loyalty to the President have given Yushchenko more leeway now to assert himself. Not all of his actions are negative -- they also have the benefit of increasing coordination and cooperation between the President, Cabinet, and parliament. However, they could cause friction if Tymoshenko begins to resent the President's intrusions. Thus far Tymoshenko has refused to take the bait, commenting either in a conciliatory manner or not at all. She appears to be committed to making this coalition work, but is also buying herself time to accomplish some of her campaign promises before the presidential election cycle begins later this year to be ready if Yushchenko self-destructs or if she decides that the time is now to run for President. End summary and comment. Yushchenko Takes Control -------------- ¶3. (SBU) Since the bruising political deadlock of spring 2007, President Yushchenko has re-emerged as the dominant political figure in the government -- a role that he played with confidence during the post-September election process of government formation and one that has continued as the Tymoshenko government begins its work. Yushchenko wasted no time in initiating weekly meetings with PM Tymoshenko and Rada Speaker Yatsenyuk to coordinate activities and discuss priorities. After the meeting on January 10 -- to which he brought Presidential Secretariat Head Baloha and NSDC Secretary Bohatyreva -- he gave a press conference, where he SIPDIS unveiled his vision for the Tymoshenko Cabinet. He laid out the following key objectives for the Cabinet: drafting "well-balanced and coordinated" amendments to the 2008 budget; improving the combat effectiveness of the armed forces and expediting the disposal of surplus munitions; preparing for the 2012 European Soccer Cup; developing a new concept for the construction of affordable housing; and restructuring VAT refund debts. Yushchenko also said that the government program that the PM was drafting should take into consideration his state of the union speech to the Rada, scheduled for February 5. ¶4. (SBU) In addition, Baloha has given two strongly-worded press conferences where he laid out presidential instructions for the PM. He gave a speech January 11 criticizing Tymoshenko for chaos connected to the Sberbank (Oshchadbank) repayments, while saying Yushchenko wanted the first tranche completed in 2-3 months. Baloha also gave the President credit for increased pensions and wages and warned the CabMin that they had to double the military's budget in 2008. Baloha gave another speech January 15 laying out the KYIV 00000102 002 OF 004 President's requested changes to the government program drafted by the Tymoshenko Cabinet, which was sent to the Secretariat for approval before the CabMin submitted it to SIPDIS the Rada for approval. ¶5. (SBU) The Presidential Secretariat also has initiated a wave of key legislation, including amended laws on the Cabinet of Ministers, the Constitutional Court, the High Council of Justice, Local Self-Government and Local Government Administration, and new laws on turning the internal troops into a National Guard; on the strength of the armed forces in 2008; on granting legal status to those who fought in the Ukrainian Insurgent Army in the 1940s and other independence movements; and ratification of the GUAM charter. The President asked the Rada to give up its winter recess and stay in session so that they could consider his laws, which he deemed a priority. After some initial pushback, Yatsenyuk proposed a compromise that leaves the Rada in session for an extra week of work, mostly in committees to review registered bills, and still gives MPs a week of rest. The change in session was approved January 15 by 374 MPs, including 137 from Regions. New CabMin Law -------------- ¶6. (C) The CabMin law is probably the most significant piece of legislation Yushchenko has submitted because the current version of the law, which was written by the Yanukovych government and came into force in February 2007 after Regions and BYuT joined forces to override a presidential veto, stripped the presidency of a number of powers. Yushchenko's proposed CabMin law clarifies a number of unclear articles from the previous iteration of the law, removes a number of perks that ministers historically have received, devolves some power from the PM to the ministers and to regional administrators, and shifts more power back to the President. Under the proposed new law, ministers, not the PM, would nominate their deputies for a Cabinet vote, and ministers would have more direct control over executive bodies that fall under their jurisdiction. Many of the other changes are logical revisions to poorly or unconstitutionally-worded articles in the current law. The draft removes language allowing the Rada to put forward nominations for PM, Defense Minister, and Foreign Minister if the President does not do so within a certain amount of time. (Embassy Note. The current law's restriction of the President's right to nominate seems unconstitutional to us. End note.) The new draft also clarifies that only the President can remove the Defense and Foreign Ministers, which is not spelled out in the constitution and which the current iteration of the CabMin law gives the Rada majority the right to do. The draft law annuls the need for the PM to countersign presidential decrees, which was slowing down work in late 2006 and early 2007. ¶7. (C) However, some of the amendments seem aimed at shifting more power to the President. For example, the President would be able to initiate dismissal of the Cabinet with Rada approval, although the procedure is not spelled out. The bill would remove limitations on NSDC and Presidential Secretariat interference into the Cabinet's work by requiring SIPDIS Cabinet members to respond to Secretariat requests, by removing the requirement for presidential acts to be coordinated with respective ministers, and giving the President the right to cancel Cabinet resolutions. In addition, the draft law says the Cabinet "ensures" execution of NSDC decisions enacted by Presidential decrees. The Cabinet also would no longer be able to discipline governors, who are presidential appointees. PM Response Lukewarm, but Muted -------------- ¶8. (C) Tymoshenko complained on a January 13 television interview that Yushchenko's draft of the CabMin law would expand the President's power at the expense of the Cabinet. She said the Cabinet would review the draft and she reminded people that the law must correspond with the constitution. However, the following day she came out to say she would not fight for power with the President, but chose to work harmoniously with him. To that end, the coalition will support all 12 laws listed in the coalition agreement and submitted by Yushchenko, even the Presidential Secretariat's draft of a new CabMin law, which the PM said they had studied carefully. Yatsenyuk also made a vague statement from the Speaker's chair on January 15 that the CabMin law had to be brought in line with the constitution. Regions and Lytvyn Bloc MPs openly criticized the President for trying to consolidate power. KYIV 00000102 003 OF 004 ¶9. (C) Undaunted, Yushchenko warned Tymoshenko and Yatsenyuk January 15 at their weekly meeting that no changes should be made to the draft CabMin law, which has been initialed by members of both BYuT and OU-PSD. He also then called a meeting of the OU-PSD Rada faction -- pulling them out of a Rada plenary session -- and all ministers and deputy ministers from the OU-PSD quota and told them they must coordinate their work with the Presidential Secretariat. He proposed weekly meetings between the OU-PSD ministers and the Secretariat to be coordinated by DefMin Yekhanurov, and held SIPDIS at the Secretariat. (Embassy Note. Soon after taking office, Yekhanurov told the Ambassador that he had been named by Yushchenko as the "dean of the cabinet of ministers" with the responsibility of playing a senior role in the cabinet, including assisting other ministers in picking their deputies, because of his experience and the President's trust. End note.) Yushchenko also gave his ministers and MPs his list of priorities, which included amending the budget, improving the macroeconomic situation, and preparing for Euro 2012. Other Key Draft Laws -------------- ¶10. (SBU) Among the other draft laws recently submitted by the President are several aimed at clarifying roles and procedures that came into conflict during the spring 2007 political crisis. The law on the Constitutional Court contains some important clarifications. It proposes to give the President the right to name his one third of the CC's 18 judges without conferring with the PM or Justice Minister. In addition, new judges would be sworn in at a ceremony at the CC to which the President, PM, and Speaker would be invited; presumably this would avoid the situation that happened in 2006 when the Court was without 12 judges for ten months because the Rada wouldn't swear them in. The amended law also clarifies that the body that nominated a judge (either the President, Rada, or Congress of Judges) has the right to dismiss that judge -- a contested point during the April 2007 controversy over the CC. ¶11. (C) Yushchenko's draft law on the High Council of Justice bill seeks to limit the power of the HCJ by turning it into a permanent functioning body and reclassifying its members as civil servants. The new law would also limit members to no more than two consecutive four year terms. (Comment: The HCJ is considered a judiciary body with special status; it plays an important, if somewhat undefined, role in nominating and sanctioning judges. In the midst of all the court-shopping last year during the spring political crisis, the HCJ did not fulfill its functions well and probably wields more power than it should. End Comment.) Yushchenko also is proposing to remove the Interior Ministry's internal troops from the ministry, rebrand them as a National Guard, and place them directly under his control. This is in response to the fight between the President and Yanukovych Cabinet over who the MOI troops report to, since they sit in a Cabinet body, the Ministry of Interior, but their head is a presidential appointee. Grumbling At the Margins -------------- ¶12. (C) For the most part, Tymoshenko has been very measured and conciliatory in her responses to Yushchenko's pushiness. Other than her public backing of the new CabMin law, she has not commented on most of Yushchenko's policy statements. Her reaction to Yushchenko's appointment of Bohatyreva to run the NSDC -- a move many cited as part of a presidential effort to keep Tymoshenko in check -- was very neutral. Instead, the PM has moved ahead actively with her own agenda (reftel). In addition, according to Presidential foreign adviser Chaliy and DPM Nemyria, when the President became very upset after Tymoshenko was invited to attend the Davos World Economic Forum and he was not -- even though she had already made plans to attend -- she agreed that Yushchenko would attend instead. However, at times her ambitions and frustrations have appeared through the cracks of her new external calm. At a January 15 press conference, Tymoshenko was asked if she was planning to run for President in 2009/2010. She said that if they let her work unmolested as PM, then she would be content, but if she were constrained, she would reconsider -- a warning shot to a presidential team that does not want her to run. ¶13. (C) Perhaps of greater short-term concern for Yushchenko is the continued grumbling of members of the his own OU-PSD faction and increasing tensions with the PSD wing. OU-PSD MP Volodymyr Stretovych -- from PSD -- told the press that Yushchenko would not remove current Prosecutor General Medvedko, despite the fact that the coalition has registered KYIV 00000102 004 OF 004 a resolution of no confidence in him, because the President had allegedly cut a deal with Regions to leave Medvedko in office. The leading candidate for PG had been a PSD member, but his candidacy was not one of the seven names given to the press by the Presidential Secretariat. In addition, there is now a fight within OU-PSD and the Presidential Secretariat over the announced nomination of PSD financier David Zhvaniya to head the Antimonopoly Committee. There is media speculation that Yushchenko had demanded the withdrawal. In addition, Lilia Hryhorovych -- a loyal member of People's Union Our Ukraine (the core party in the OU bloc) -- told us that the coalition was all about promoting one person -- Tymoshenko -- which did not sit well with her. More importantly, perhaps, key confirmation votes scheduled for January 15 -- for Valentyn Nalyvaychenko to head the SBU, Vitaliy Haiduk as DPM for energy, Andriy Portnov as Head of the State Property Fund, and Zhvaniya -- had to be removed from the agenda because the coalition did not have 226 members present. (Note. From our spot in the diplomatic balcony, it seemed to be OU-PSD that was lacking participants with most BYuT deputies in their seats. End note.) ¶14. (U) Visit Embassy Kyiv's classified website: www.state.sgov.gov/p/eur/kiev. Taylor