Politics & Markets
Ukrainian elections -- And the Kremlin antics! (Issue: 9)
 Viktor Yushcenko: |
Main actors:
Viktor Yushcenko:Incumbent president since 2004 December and the leader of Our Ukraine Party
Viktor Yanukovich:Prime Minister prior to the parliamentary dissolution and the leader of the Party of Regions
Yulia Tymoshenko:Former Prime Minister prior to Yanukovich and the leader of the Yulia Tymoshenko Bloc.
The recently concluded Ukrainian elections have left all three major parties seeking to form alliances in an attempt to form a government. This columnist in a previous article pointed out that none of the parties would secure the majority. Widely expected scenario was for Yulia Tymoshenko to form an alliance with Yushcenko backed Our Ukraine Party. Given her less than friendly relations with the Kremlin and Russia?s ability to wield influence over Ukraine with its ?gas stick?, what does the future hold for Ukraine?
Given below are the percentage votes and seats won by each party.
|
|
% Votes |
Seats |
|
Party of Regions |
34.35% |
175 |
|
Yulia Tymoshenko Bloc |
30.73% |
156 |
|
Our Ukraine Party |
14.16% |
72 |
|
Communist Party |
5.38% |
27 |
|
Lytvyn Bloc |
3.96% |
20 |
|
Socialist Party |
2.86% |
0 |
The wide spread expectation was for Yushcenko to invite Yulia Tymoshenko to form a coalition government with his own Our Ukraine Party. However, according to Kommersant, Yushcenko has proposed a ?broad ruling alliance? with Yanukovich?s Party of Regions with all three parties forming a grand alliance. This makes the entire election episode an interesting read given that Yushcenko called for elections in the first place to halt defections from other parties allegedly engineered by Yanukovich!
Against this backdrop, it is important to highlight Gazprom?s reaction after the elections. Few days after the elections but before the final results were published Gazprom threatened to stop gas supplies unless Ukraine settles US$1.3 billion of outstanding debt on gas sales by the end of October. Timing of course is unfortunate particularly when Yulia Tymoshenko appeared to be set to form a government. She had also made her intentions to change the structure of gas deals with Russia known.
Gazprom?s announcement has certainly caused more than headaches in Kiev. While Gazprom chief executive Alexei Miller and Ukrainian Fuel and Energy Minister Yury Boiko indeed reached an agreement to settle debts by November 01st, the episode confirms Russia?s ability to influence its neighbours, even political destinies. Ukraine is heavily dependent on Russia for its gas needs and has chilling memories when Gazprom closed gas taps to Ukraine in December 2005. That episode triggered energy shortage fears across several European countries as well.
Before speculating who will eventually be Ukraine?s next premier it is appropriate to evaluate Yulia Tymoshenko?s relations with Kremlin. As highlighted in our previous column, Tymoshenko is keen to join the NATO. She has also antagonised Russia with her article published by the Foreign Affairs journal ("Containing Russia" May-June 2007), which largely accused Russia of expansionism. Her relations with the Kremlin have always been poor but lately it has made a new low. Russia appears to be less than keen to see Yulia Tymoshenko at the helm.
Gazprom?s request for outstanding payments may be a coincident or it may well be the Kremlin?s way of expressing opposition to a Ukraine under Yulia Tymoshenko. Therefore Yushcenko?s request to form a grand alliance with all three parties forming a government comes as no surprise. Tymoshenko is unlikely to agree and if Yanukovich is reappointed, ensuing dissension would make the governance a chaotic affair. Yushcenko therefore is likely to appoint Tymoshenko as the next premier.
Timing once again makes it all intriguing. Yushcenko?s proposal for a grand coalition comes little after the agreement between Gazprom and the Ukrainian Fuel and Energy Minister. It is clear that Tymoshenko?s election promises and her article about Russia?s expansionism have irked the Kremlin. The latter however has an effective weapon in Gazprom to counter such threats. Ukraine of course will settle the dues but surprises from the Kremlin will prove to be far from over!
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