UKRAINE: YANUKOVYCH PUSHING FOR NEW COALITION,

C O N F I D E N T I A L SECTION 01 OF 04 KYIV 000453

SIPDIS

SIPDIS

E.O. 12958: DECL: 02/27/2018
TAGS: PGOV PREL PINR UP
SUBJECT: UKRAINE: YANUKOVYCH PUSHING FOR NEW COALITION,
SOME SEE BALOHA HELPING


Classified By: Ambassador for reasons 1.4(b,d).


1. (C) Summary. During a February 25 meeting, Party of
Regions leader Yanukovych reiterated to the Ambassador all
his old points about Ukraine's relations with NATO not
requiring a MAP at this juncture, then proceeded to lay out
three scenarios for the Rada, all of which would change the
current configuration in some way. As Yanukovych saw it, the
impasse could be ended by: the reformation of the coalition,
a year of Rada work with no coalition and pre-term elections
held at the end of the year, or pre-term elections now.
Yanukovych said that he wanted to maintain his good image in
the West, but his justifications of Regions's unhelpful
statements on NATO and Kosovo and its continued blockading of
the Rada did not indicate that he saw a connection.
Meanwhile, faction leaders in the Rada have put together a
draft agreement to end the stalemate, which lays out key
legislative priorities such as WTO accession -- but the whole
approach is still contingent on a further agreement on how to
address the MAP letter. Two MPs at the Rada (from Lytvyn
Bloc and OU-PSD) both described to us a Rada heading towards
some sort of unofficial "situational majority," with much of
OU voting with Regions and Lytvyn Bloc. Both insisted that
all of the machinations were fueled by Yushchenko's
calculations about the best way to get reelected; any other
issues, such as NATO, were simply a pretext. From the
Presidential Secretariat, Chief of Staff Baloha defended his
exit from Our Ukraine, called the current coalition
ineffectual, and reiterated he supported a broad variant.
His deputy, Oksana Slusarenko, told the press that they
believed BYuT was helping prolong the blockade because they
were benefiting from the stand-off. The Rada is scheduled to
meet next on March 4.


2. (C) Comment. Yanukovych's explanations were a rehash of
the same old story and showed no signs that he is looking for
any compromise short of a scenario that gets him out of the
opposition and back into power. Regions's tactics seem to be
to stall long enough for the coalition to implode. The
decision by Presidential Secretariat Head Baloha to leave
People's Union Our Ukraine and form his own political
movement, followed by six other PUOU defectors, has spurred
much discussion that some new tactical alliance in the Rada
is imminent. Moreover, the criticism from the Secretariat
continuously lobbed at the Cabinet is resulting in visible
strains within the coalition. End summary and comment.

Yanukovych: Statesman or Russian Puppet?
--------------


3. (C) The Ambassador started the meeting by reminding
Yanukovych that when he had traveled to the U.S. in December
2006, the Ambassador had argued that Yanukovych was a changed
politician worth taking seriously. Now questions were
arising once again as US policymakers watched the blockading
in the Rada and read statements from Party of Regions on NATO
and Kosovo that sounded very much like the statements being
issued from Moscow. (Note. Yanukovych had a grin through
most of the first five minutes, including through the part
about his image being up for debate, but it disappeared when
the Ambassador compared his positions to those of the
Kremlin. End note.)


4. (C) Yanukovych started by thanking the Ambassador for the
opportunity to change people's opinions. He said that the
blockade in the Rada had been provoked by the government when
it decided to send the letter to the NATO Secretary General
requested a NATO MAP at Bucharest, signed by the President,
Prime Minister and Speaker. Regions had made its proposals
on how to correct the situation -- the issue should be
discussed in the Rada and at a CabMin meeting. "Why was the
process so nontransparent?" he asked. "What are they afraid
or ashamed of?"


5. (C) In terms of Regions's position on NATO, Yanukovych
said it had never changed -- the party supported close
cooperation with NATO, as Yanukovych himself said in Brussels
in September 2006, but accession was a different issue. His
government had expanded cooperation with NATO and moved the
public dialogue forward calmly, improving public opinion of
the alliance -- this was all a credit to Regions and to his
government. In contrast, when the orange team came to power
in 2005, they had talked about NATO and EU membership as if
it would happen tomorrow. At that point, the lack of real
progress was a disappointment and public opinion had turned
negative. "People," Yanukovych argued, "don't want pretty
words; they want action and good living standards."
Yanukovych said that there was no need to make a hasty
decision on MAP and no reason not to continue the Annual
Target Plans within the existing Intensified Dialogue.

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However, the new orange government had re-sparked the
conflict and worsened the situation. The final results of
this hasty action would be seen within different political
processes - within the Rada, within society, and reflected by
the results of upcoming elections.


6. (C) Yanukovych argued that political parties take
advantage of public sentiment -- but it was not fair to
compare Regions with Russia. That said, one had to reckon
with Russia when making policy -- Ukraine is too economically
vulnerable to not do so. That was why the 2003 law on the
fundamentals of national security contains a provision that
says any Ukrainian action towards integration into
EuroAtlantic structures must be made with consideration of
the strategic partnership with Russia. That's the law.
Ukraine doesn't benefit, Yanukovych argued, when the
government is provocative. He concluded by saying he did not
think the USG wants to see a conflict between Ukraine and
Russia.

There Will be Change in the Rada or no Rada At All
-------------- --------------


7. (C) Turning to domestic politics, Yanukovych said that
neither the Rada nor the coalition is capable of working.
There was not a real majority; this was just an attempt to
look important. He promised that Regions would ensure that
the Rada worked within the rules of procedure and the
constitution, meaning there will be no double voting (when
one MP votes on behalf of others.) Therefore, he concluded,
the coalition won't be able to adopt a single decision
without support from the opposition. The authorities need to
respect and consult with the opposition. According to
Yanukovych, "If the government acts like we don't exist,
there is no other option than pre-term elections." (Comment.
In our view, the Tymoshenko government actually has made an
effort to reach out to Regions within the Rada, but without
much success. End note.)


8. (C) Yanukovych said there were three ways forward. The
first would be to reformat the coalition, although he did not
specify how. The second option would be to let the Rada work
for a year without a coalition, until the President can call
new elections. (Note. The constitution states that the Rada
cannot be dissolved within one year of holding pre-term
elections, so in our view, not before October 1, 2008. End
note.) Or thirdly, pre-term elections could be held with the
agreement of all political forces. He added that he could
not rule out the first scenario, noting that their view of
the situation had changed a little. Before, Regions had
insisted on a broad coalition, today "we're waiting to be
asked to join a coalition". He said that if such a proposal
was serious, his party would consider it. If not, Regions
was not afraid of new elections. Regions would not make the
same mistakes as in 2007, Yanukovych said, and their ratings
would go up.


9. (C) The Ambassador reminded Yanukovych that it was
possible to find agreement in this Rada to pass WTO and other
laws that are good for the country, as the Rada did on
February 12. Yanukovych replied that unfortunately, dreams
often don't come true. Regions would keep looking for
solutions, but when all options are exhausted, then they
would consider pre-term elections. Regions was aware of its
responsibility to the country, but many things right now do
not depend on them.

Yanukovych on Kosovo
--------------


10. (C) Yanukovych also addressed Regions's position on
Kosovo. (Note. Which echoes the Russian view that Kosovar
independence sets up a dangerous precedent for instability in
Eastern Europe. End note.) Our statement, he said, was
written without any "external" consultations. It was a
decision made by the Regions Political Council, which
reflects the party's view. He pointed out that the MFA has
not expressed an opinion and the President asked everyone not
to express a final position. Yanukovych reiterated that
Regions opposes separatist sentiments within the country --
"in the West, East, and South, we're for unity" -- but
Regions has never been and never will be the staffer of a
foreign country or government.

Rada Still Stuck, Possible Situational Majority?
-------------- ---


11. (C) Meanwhile, the Rada moved one step closer to breaking
the stalemate and Regions's blockade late on February 26.
After Speaker Yatsenyuk failed to produce results at a

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roundtable with faction leaders on February 25, the faction
leaders continued their work alone the next day. (Yatsenyuk
was in Brussels.) At the end of the day, they announced a
draft agreement that could be signed once they choose one of
three ways forward on the MAP letter: to wit, either a
resolution acknowledging Yatsenyuk did not speak for the
whole parliament; approving a resolution on certain aspects
of making a decision concerning Ukraine joining NATO (a
reference to Yatsenyuk's earlier proposal calling for a
resolution that states a referendum would be required before
Ukraine could request NATO membership); or holding a general
discussion of all NATO-related resolutions prior to signing
the rest of the political agreement to reopen the Rada.
(Note. There are currently nine draft resolutions on NATO
pending in the Rada. End Note.) The agreement itself lays
out a list of legislative priorities, including WTO
accession, budget amendments, approval of CabMin's government
program, the ten urgent laws mentioned in the coalition
agreement, the amendment of Rada rules regarding rights of
the opposition, and the appointing and dismissing of certain
officials. The draft agreement calls on all factions to work
constructively and to avoid raising provocative political
issues.


12. (C) The document still awaits approval by all the
factions and could still fall victim to debates over which
approach to the MAP letter to take. OU-PSD MP Tarasyuk said
to the press that Regions continued to use the MAP letter as
an excuse to try to form a broad coalition and that Baloha
was "playing those games." This view was echoed in comments
two MPs made to us on February 22.


13. (C) Serhiy Hrynevetskiy (Lytvyn Bloc) told us that in
principle, all the personnel issues that had been causing
headaches for the coalition - i.e. heads of the State
Property Fund, Antimonopoly Committee, National TV and Radio
Committee - have been resolved and could be addressed when
the Rada reconvenes on March 4. He added that there was a
slight problem over the SBU head nomination, as a conflict
had developed between Baloha and Acting SBU Head
Nalyvaychenko. Hrynevetskiy said that he did not believe
there would a formal coalition re-formation because it was
too difficult legally. Instead, there will be a situational
majority, where they (OU, Lytvyn Bloc, Regions) could
sideline Tymoshenko and block her legislative initiatives as
needed. To form a totally new coalition would require a
majority of OU-PSD MPs (37) to defect, and although this
process might be ongoing, a situational majority would give
them more flexibility.


14. (C) Oles Doniy (from the PSD wing of OU-PSD) also told us
that efforts to reformat the coalition were ongoing. He
noted that two days earlier, he would have said that it would
be impossible to get 37 MPs from his faction to switch, but
now (note--after the OU-PSD faction met with Yatsenyuk and
five deputies left PUOU),he was not so sure. Doniy
underscored that PSD opposed any changes to the coalition.


15. (C) Both Doniy and Hrynevetskiy told us that the games in
the Rada were linked to the President's calculations about
how to best get a second term in office. Hrynevetskiy
thought the only real chance was for Yushchenko to cut a deal
on constitutional reform and have the President elected in
the Rada. Doniy thought that Yushchenko, aware that he could
never beat Tymoshenko in a competition for the orange
electorate, would cut a deal with the moderate wing of
Regions and reposition himself as the new candidate from the
East. To do this, he would have to present himself as the
candidate of national unity and remind the owners of large
enterprises of their concerns about a Tymoshenko presidency
coming with significant reprivatization. Doniy argued that
Yushchenko's repositioning was already visible in the Donetsk
press. For example, Yushchenko's trip to Moscow was
portrayed there as him having saved Ukraine. Doniy argued
that Yanukovych will eventually calculate that he would
rather be PM with reduced powers, than not be PM at all,
because he is not happy as leader of the opposition.
Therefore, Akhmetov and Yanukovych will work this out and
make a consolidated decision to support Yushchenko.

Secretariat Comments Continue to Raise Questions

SIPDIS
-------------- ---


16. (SBU) In a February 21 interview on Inter TV, Baloha said
that he had left PUOU because the OU-PSD bloc had failed to
form a single party by the end of December 2007, as agreed to
at the bloc's congress. He said the five MPs who have left
did so for their own reasons and have no connection to him.
He also said that a 227-vote coalition was ineffectual and at
a minimum Lytvyn Bloc should be brought in. Baloha added

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that he had never opposed including Regions as well.
Finally, he warned that the President would consider
dissolving the Rada again if the situation did not improve.


17. (SBU) One of Baloha's deputies, Oksana Slusarenko, told
the press February 25 that BYuT was partly to blame for the
stalemate in the Rada. Because they benefit from the
stand-off, she argued, they are not trying to fix the
situation. In particular, Slusarenko said that BYuT was glad
to avoid having to vote on the new CabMin law that would
weaken their powers. (Note. Even through BYuT has already
stated they will support the draft law as is. End note.)
Moreover, she said that in the event of the Rada being
dissolved, BYuT ministers would retain their portfolios and
the bloc would do very well in new Rada elections.


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