Predicting the future

There is some interesting speculation in today's 'Segodnya' on how events could develop in Ukrainian politics. Below is a very rough translation:

The political crisis in the Ukraine continues. In response to Yushchenko's ultimatum to adopt a resolution condemning "Russian aggression" against Georgia and demands to cancel recently approved anti-presidential laws, Yulia Tymoshenko advanced her conditions for reconciliation. She demanded the president apologizes for accusing her of state betrayal, but added she does not hold out much hope for this.

There are two realistic possibilities on how matters may develop. The first is the creation of a PoR and BYuT coalition. However the business-wing in 'Regiony', and many of the Western Ukrainian deputies and companions-in-arms of Viktor Pynzenyk in BYuT are not agreeable to this.

The second possibility is early elections, if the above-mentioned coalition fails to be constructed. Two other versions of the course of events cannot be discounted entirely, i.e. the restoration of the NUNS-BYuT coalition, or the creation of the broad NUNS-PoR coalition.

'Segodnya' gives the good and bad points of each possibility:

1. The revival of the BYuT-NUNS coalition could ensure an offer of MAP from NATO in December, but could also lead to a collapse in negotiations on the price of Russian gas, causing great pain to industrial and domestic consumers. Parliament, where the coalition does not an absolute majority, would be further paralyzed at least until the presidential elections to be held at the end of 2009.

2. The creation of a BYuT-PoR coalition would be a 'first' for Ukraine so predicting how such an arrangement would 'pan out' is difficult. However, the government would, maybe, at long last, be able to pass in the VR, at least the most basic necessary laws (e.g. changes in the budget). Furthermore, the alliance of these two largest parties which, combined, total over 300 votes, could, in half a year, change the constitution and affirm a normal system of authority, clarifying who is 'top dog' in the country - the President or premier.

To the pluses of this coalition could be added the normalization of relations with Russia. This coalition could quite realistically agree with Moscow a small increase only in the price of gas, furthermore, if 'Regionaly' are persistent, then the government could 'back off' on Ukrainianization, removing some stresses in the southeast of the country.

On the economy there could be two outcomes - one good and one bad. Tymoshenko's desire to increase her popularity amongst the electorate by means of generous social programs could be combined with the economic pragmatism of 'Regionaly'. Alternatively, businessmen from BYuT and PoR could dictate political progress by excessive lobbying of their own business- interests, increasing corruption.

3.The break-up of parliament and early elections would see a sharp rise in social payments to the electorate by the current government, to be paid off by any incoming government, increasing inflation. Talks with Russia would be put 'on hold' because of the uncertainty of who is in charge of the country. Internal investment would decrease. There would be a sharp increase in the tension in the country on the question of the war in Georgia war and relations with Russia, with ever more deepening divisions in society. Finally, the elections may not provide any change to the current stalement, so the same political chaos that exists now could remain for a long time in the future.

4. Broad PoR-NUNS coalition. This could only take place if 'Regiony' back-down from its fundamental positions on NATO and Russian language, or in case of a volte-face on these questions by NUNS and Yushchenko.

Tymoshenko proposes three scenarios to break present deadlock [in English] here

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Meanwhile 'Kontrakty' expresses the opinion that the many Russian business interests in Ukraine would prevent any repetition of the Georgian scenario in Ukraine. Ukrainian experts on security issues consider a military conflict impossible.

It is indicative that despite the military conflict between Russia and Georgia and the strain in relations that followed it, no new trading war has developed. Russia did not stop gas delivery to Georgia or fuel transits to Armenia. And Georgia does not intend to restrict the import of goods from Russia.

Russian companies have large investment holdings in Georgia, e.g. in electric power generation, banking, chemicals, petroleum products and telecommunications. The same is true of Ukraine.