Verkhovna Rada votes to dismiss Cabinet; administration calls move unconstitutional

by Zenon Zawada
Kyiv Press Bureau

KYIV - Ukraine's new year began with the government once again destabilized as the Verkhovna Rada voted to dismiss Prime Minister Yurii Yekhanurov and his Cabinet of Ministers, charging that they seriously mishandled the natural gas crisis with the Russian Federation.

Pro-Russian parties claimed President Viktor Yushchenko erred by further damaging relations with Ukraine's vital neighbor, while the Yulia Tymoshenko Bloc claimed the government gave up too much when signing the deal with Russia.

The result was a 250-50 no-confidence vote on January 10 in which the Tymoshenko Bloc, once considered pro-Western, found itself aligned with the pro-Russian Party of the Regions, Volodymyr Lytvyn's People's Party of Ukraine and the Communist Party.

"Tymoshenko's policies are not pro-Western, nor are they pro-Russian: they are pro-Tymoshenko," said Dr. Taras Kuzio, a visiting professor at George Washington University.

The Verkhovna Rada's vote came as President Yushchenko arrived in Astana, capital of Kazakhstan, where he attended the inauguration of re-elected President Nursultan Nazarbayev.

Pro-Yushchenko forces said the vote was unconstitutional, while opposition forces said the vote was within the Parliament's power because of the constitutional changes that went into effect on January 1.

Though the vote dismissed the government, the Verkhovna Rada also required that the government keep working until a new Parliament is in place after the March 26 elections.

Addressing a special session of the Cabinet of Ministers on January 12, after he returned from Kazakhstan, President Viktor Yushchenko said the Verkhovna Rada's resolution on the government's dismissal is not constitutional.

"I would like to make it clear to the people, the Parliament and political forces that there is a full-fledged government in Ukraine, both in the center and locally. And it is working without any 'acting' prefix."

The president emphasized that the Yekhanurov government will legally conduct state policies until a new government is formed after the parliamentary elections in Ukraine. Mr. Yushchenko also reported that he had signed a petition to the Verkhovna Rada with a request to cancel the resolution on the government's dismissal.

A question of image

With no one leaving their government desks, the only possible damage done was to the image of Mr. Yushchenko and his Our Ukraine coalition.

Domestically, "Yushchenko has been made to look weak, as though he screwed up," said Ivan Lozowy, president of the Kyiv-based Institute of Statehood and Democracy, which is exclusively financed by Ukrainian business donations.

In the West, investors in Ukraine weren't scared off by the vote, said Dmytro Tarabakin, director of sales and trading at Dragon Capital, a Kyiv-based investment bank.

"It didn't help the image of Ukraine, but I wouldn't say that it hurt Ukraine either," Mr. Tarabakin said. "With Ukraine, people have learned to see the forest for the trees. There was no real substance to the vote."

In fact, Mr. Yushchenko has emerged from the natural gas crisis with a favorable view from the United States and the European Union, especially after meeting in Astana with Russian President Vladimir Putin on January 11, Dr. Kuzio said.

The no-confidence vote revealed the viciousness of Ukraine's politics leading into the March elections.

Though Ms. Tymoshenko's forces had voted against Our Ukraine positions in three critical votes since Mr. Yushchenko fired her, the natural gas issue was the first time Ms. Tymoshenko directly attacked Mr. Yushchenko and his policies.

Whether she was seizing the moment for her own political gain or defending national interests, Ms. Tymoshenko blasted the agreement as an "absolutely conscious betrayal of Ukraine's interests," thus making the idea of Mr. Yekhanurov's resignation entirely logical.

Agreeing to $95 per 1,000 cubic meters amounts to "the destruction of all of Ukraine's energy stability," she said of the price, which "won't hold up for a single month."

Mr. Yekhanurov shouldn't have signed a new agreement, Ms. Tymoshenko said. Instead, he should have fought to maintain the existing agreement with Russia that could have remained in place until 2010, she claimed. She maintained that the contract signed with Russia should be canceled, adding that her lawyers were preparing appeals.

Comments on Tymoshenko's moves

Ukrainian political observers are divided over whether Ms. Tymoshenko's fierce reaction to the deal benefited her politically or not.

Ms. Tymoshenko showed herself as a strong politician in criticizing what was a poor deal made by Mr. Yekhanurov, Mr. Lozowy said.

After months of passive observation, she had nothing to lose, he said, and was very concerned that, ultimately, Mr. Yushchenko would unite with former Prime Minister Viktor Yanukovych instead of her.

"Tymoshenko is very concerned that after the elections Yushchenko will come to agreement with Yanukovych instead of her," Mr. Lozowy said.

Dissension on domestic issues is more acceptable than on foreign policy, said Serhii Taran, director of the Kyiv-based International Democracy Institute, which is financed by mid-level Ukrainian businesses and the National Democratic Institute for International Affairs.

Ms. Tymoshenko should have opted to demonstrate to Russia a united political front in Ukraine, just as in the United States Democrats set aside their differences with the Republicans and voted to support the war in Iraq, said Dr. Taran, who is on the Reforms and Order-Pora electoral list.

"Tymoshenko overplayed politics in this case," Dr. Taran said. "I can understand that some people can be critical of the contract, but by no means should it be the reason to dismiss the government."

Despite her staunchly pro-Ukrainian position, western Ukrainians will likely resent her for turning her back on Mr. Yushchenko and siding with the pro-Russian parties, Dr. Kuzio said.

American and European policymakers have become very disenchanted with her, he added.

"The central point for Ukraine is you can only integrate with the West and the European Union if you have good relations with Russia," Dr. Kuzio said. "In that sense, Yushchenko came out very well, and being seen with Putin again scores points with the West. Tymoshenko comes across as a firebrand and a de-stabilizer."

Western investors aren't too fond of her, Mr. Tarabakin said. "The sooner she's off the screen, the better," he quoted one of his investor clients as saying.

Party of the Regions position

In presenting the criticism of the Party of the Regions regarding the agreement, National Deputy Volodymyr Bronnikov delivered a brief speech repeatedly referring to the deal as a crime and uttering phrases and arguments that lacked explanation or reasoning.

"The agreement is criminal inasmuch as it reinforces Ukraine's vassal status before the U.S. and NATO," he said. "It reinforces Ukrainians in the role of black market workers in the European and Russian markets."

Industry will lose its chance to rebuild with basic energy-saving technologies, he said, and alternative energy means will reduce environmental waste, he said.

The agreement is also a betrayal of "Ukraine's strategic interests in the global fight for remaining energy resources, for which the United States is fighting with fire and sword, in the full sense, and Europe with sly politics by disconnecting Ukraine from Russia, where 50 percent of the world's energy resources are concentrated," Mr. Bronnikov continued.

The agreement was criminal because it causes substantial economic damage to those who make direct purchases of natural gas for personal needs, as well as payments for utility needs, he added.

In fact, most Ukrainians will not feel the effect of the new natural gas price because it almost exclusively affects Ukrainian industry, Dr. Taran said.

Assessments of the gas deal

There was no consensus among political experts as to whether Ukraine's natural gas pact with Russia was a good deal for Ukraine. Some argued it was horrible for Ukraine, while others said it was fair.

Given that Russia was arguing to raise the price fourfold, the Yekhanurov government managed a fair deal, Dr. Taran said.

"It more or less looks like a fair deal," Mr. Tarabakin said.

The deal "was a huge disaster," Mr. Lozowy commented.

Feeling heat from the European Union and mounting anti-Russian sentiment, it was obvious that Russia was desperate to sign a deal, Mr. Lozowy pointed out.

Ukraine had a "very strong bargaining position" on January 3, Dr. Kuzio said, but it walked away from the table with what he considered a weak deal.

Once again, Ukraine failed in its international public relations, he observed. While Gazprom was constantly making statements on television and in the press throughout the negotiations, the Ukrainian side had no one appearing on CNN or BBC.

The deal's biggest problem is that Ukraine's price of $95 per 1,000 cubic meters is guaranteed only for six months, Dr. Kuzio said. "Are we going to have a crisis situation again the middle of the year?"

Also, no one has yet to identify the partners of RusUkrEnergo, the intermediary company in the deal that stands to profit enormously. The 50 percent owner of RusUkrEnergo, Raiffeisen Investment, refuses to identify the Russian and Ukrainian partners.

When asked whether he knew who the partners are, Mr. Yekhanurov said he didn't care, according to Mr. Lozowy. "I was shocked," Mr. Lozowy said. "How can the prime minister not care about the company that has right to all natural gas imports into Ukraine?"

In fact, Yulia Tymoshenko Bloc members allege that corrupt mafia leaders such as the notorious Semion Mogilevych have ties to the company.

Many political experts are also convinced that Mr. Putin himself has indirect ties to the company and uses it as a means to launder money for his own slush fund. After all, he and former Ukrainian President Leonid Kuchma created the company in 2004. It's quite possible that funds from the intermediary could end up funding Mr. Yushchenko's opposition forces.

"They should be absolutely clear and demand to know who is behind RusUkrEnergo," Dr. Kuzio said of the Yekhanurov government. "I'm sure there's money funding (Volodymyr) Lytvyn, (Viktor) Medvedchuk or (Viktor) Yanukovych. I don't think RusUkrEnergo is corrupt. They're earning money legitimately for doing very little."

Administration rejects the vote

Mr. Yushchenko and his government swiftly and firmly rejected the no-confidence vote as unconstitutional, insisting that they would ignore it and continue working.

The vote was "a blow to the spine of Ukraine's strategic interests," said Anatolii Kinakh, the secretary of the National Security and Defense Council.

The January 10 vote was "incomprehensible, illogical and incorrect," Mr. Yushchenko said. "I don't believe Ukraine deserves this kind of a decision 80 days before the parliamentary elections," he noted. "This vote demonstrates a destabilization of the situation."

On January 12 Mr. Yushchenko announced he is withdrawing his signature from the Memorandum of Understanding Between the Government and Opposition that he signed with Mr. Yanukovych on September 22, 2005.

The opposition had violated the agreement's fundamental principle, Mr. Yushchenko said, which was "cooperation in taking common actions towards stabilizing the internal political situation in Ukraine."

In response to criticisms of the natural gas deal with Russia, Mr. Yekhanurov acknowledged it was a compromise, but said his government was guided by Ukraine's national interests.

"I will say that the talks were difficult," Mr. Yekhanurov told the Rada before the no confidence vote. "Each party displayed toughness and persistence. The urgency of the gas issue was so important for our society that even those who lacked professional knowledge and couldn't imagine the complications and scale of this energy provision problem commented on it. And certain Ukrainian actors damaged the political and economic interests of this country by their comments."

On January 11 Mr. Yushchenko met with Mr. Putin in Astana, where they attended President Nazarbayev's inauguration. The Ukrainian president held a press event at which he was photographed shaking hands with the Russian leader as a demonstration of stability and partnership.

"I am deeply convinced that Ukraine and Russia today are at the stage of forming new, qualitative relations, which give our nations the possibility to find the necessary, timely and correct answers to even the most difficult of questions," President Yushchenko said.

As a result of the gas crisis, Russian-Ukrainian relations are "more understood, predictable, more transparent and mutually acceptable," he said.

Back in Kyiv on January 12, Mr. Yushchenko told his Cabinet of Ministers that he is prepared to be held responsible for each item of the agreement.

"For the first time in over 15 years, we came to the negotiating table as full-fledged partners and for the first time we achieved solutions that benefit the nation," he said.

When he was prime minister in 2000-2001, Mr. Yushchenko said he familiarized himself with the specifics of those gas agreements with Russia. He voiced disapproval of those leaders who "stole billions and now urge us to accept their advice as to how to handle the gas problem."

Copyright © The Ukrainian Weekly, January 15, 2006, No. 3, Vol. LXXIV

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