Big gathering on Inter

Watch Friday's unfocussed three-and-a half-hour 'Svoboda na Interi' program, with Yushchenko, Lytvyn, Moroz, Yatsenyuk, Stelmakh, Azarov, Dobkin and other crooks from Ukraine's mount Olympus here

Notably, neither "she who stole gas" as the president called the PM, nor any other major figures from the government were there to defend the recently-approved budget. The show's presenters allowed many remarks to remain unchallenged. They allowed Yushchenko to drone on far to long.

VR expresses no confidence in NBU

Ukraine's parliament, the Verkhovna Rada, by a huge across-the-board majority, today supported a no-confidence motion against the National Bank of Ukraine. They demanded president Yushchenko sack its head, Volodymyr Stelmakh.

In total 380 deputies voted for the motion, 149 from PoR, 154 from BYuT, 31 from NUNS, 27 Communists, and 19 from speaker Lytyvyn's bloc.

An investigative committee report on the activities of Bank during the financial crisis had been presented to the VR.

The investigative committee have forwarded material they had gathered and scrutinised to the Prosecutor-General's office for further investigation.

In the light of PM Tymoshenko's accusations and allegations that the president had covered up Stelmakh's alleged corrupt activites [see previous blogs], the VR vote places the president in a very tricky position. Today he had met a delegation of Ukraine's leading bankers during which the demanded greater openness and transparency from the NBU.

Off with his head*

Tomorrow [Wednesday] in the VR, BYuT will demand the resignation of chairman of the National Bank of Ukraine, Volodymyr Stelmakh, according to an article in 'Korrespondent'.

A parliamentary commission investigating allegations of corrupt activities at the NBU, which may involve even president Yushchenko and his secretariat, met yesterday.

"According to the preliminary conclusions of the commission, and on the basis of these conclusions, the information which the prime minister of Ukraine revealed live on TV, has been completely confirmed. [See previous blog ]. These conclusions will be declared at tomorrow's parliamentary session, and, most likely, will lead to a change of the entire leadership of the National Bank of Ukraine," said BYuT deputy Valery Pysarenko.

He also has added that BYuT has not yet 'pencilled in' any possible nominee for the post of NBU chair.

The parliamentary commission report is not yet written into tomorrow's parliamentary agenda, and has to be proposed and voted on tomorrow.

Party of Regions trouble-maker deputy Nestor Shufrich today declared that Stelmakh's report in parliament, could most likely end with demands that the President dismisses Stelmakh.

"If the President does not do it, then obviously the next step of the coalition would be to begin procedures to impeach the President for providing cover for, and being an accomplice to, currency speculation. If BYuT initiates this, I do not exclude Party of Regions supporting this initiative," emphasised Shufrich.

The VR set up a temporary investigative commission to look into the NBU's activies on 18th December. On December 20th the prime minister sensationally claimed that as a result of illegal operations carried out via the Nadra bank, the organizers, including President Yushchenko, NBU bank chairman Stelmakh and the head of the President's secretariat Viktor Baloga, planned to rake off 4.55Bn hrvnya.

Your blogger notes that while not providing concrete evidence of illegal activities by the NBU, PM Tymoshenko did give details, of disproportionately large suspicious transfers of state funds to Firtash's Nadra bank. E.g. the state 'Ukreksimbank' received about 7 times less that Nadra. If Tymoshenko's allegations were baloney, they could be easily disproved. Nevertheless, there is a slight whiff of kangaroo court hanging over Stelmakh.

The big question is, will PoR support BYuT and vote to 'decapitate' the NBU chairman? And if this happens, will the president suffer the same fate?

p.s. 'Segodnya' reports that PoR and BYuT may be working together for combined VR and parliamentary elections in the Spring.

*In Lewis Carroll's much-loved children's story "Alice's Adventures in Wonderland", (published 1865), The Queen of Hearts goes around constantly shrieking this phase, and not much else.

Old hands could return

On December 18th, PM Tymoshenko demanded the immediate resignation of Head of National Bank of Ukraine Volodymyr Stelmakh. A day later, on television, she accused president Yushchenko, Stelmakh and head of the president's Secretariat Viktor Baloha of illegal speculative operations via the Nadra bank, in which they could have 'raked off' over 4.5Bn hryven.

Now the first President of Ukraine, Leonid Kravchuk, has sprung to her defence. He claims that her casting the spotlight on allegedly corrupt shennanigans in the NBU, and the subsequent creation of a parliamentary investigative commission, have cooled the speculative flare-up and are helping to increase the value and stabilize the national currency at more realistic levels.

According to Kravchuk, the turbulence in the currency market has bred huge discontent amongst ordinary people and may even be generating a pre-revolutionary situation, "and the people who are responsible for the stability of the national currency, for fighting economic crime, for guaranteeing the rights of citizens – they are [all] closing their eyes to blatantly criminal schemes taking place in the currency market," said Kravchuk.

"It is very good that a person from the higher eschelons of power has been found that has dared to call matters by their proper names, and has appealed to the people, because there was no other option," he added.

President Yushchenko responded to Tymoshenko's accusations: "Today the problem is not my relationship with this lady [ledi]. She has announced her opposition to the nation, to the state." ...[That's no lady Viktor Andriyovych, that's the prime minister]

On Monday, newly-elected VR speaker and wily old fixer Volodymyr Lytvyn is to meet both Yushchenko and Tymoshenko to consult on this week's parliamentary debates on tackling the economic crisis. And in an interview in the current 'Dzerkalo Tyzhnya' he suggests that if proposed, the experienced duo Vitaliy Hayduk and Serhiy Tyhipko would be broadly supported in the VR and they could soon return to the cabinet to help sort out the current economic mess.

National Bank of Ukraine - a complete shambles

Today, at a press conference, PM Tymoshenko sensationally blamed, in no uncertain terms, our old friend Dmityro Firtash and the Presidential Secretariat for the hryvnia’s collapse. She accused the president of covering up and benefiting from major financial speculation.

"The budget of Ukraine has become hostage to a huge speculative operation.. the 10 hryven to the dollar exchange rate, makes it impossible to sell gas, which we import, on the internal market. It makes it impossible to buy nuclear fuel, medicines for people, makes it impossible for people to pay back [dollar] credits which they took out for example, for apartments," she complained.

Here's a portion of Unian's [English language] report on this:

"Prime Minister of Ukraine Yulia Tymoshenko promises to turn to international organizations who investigate into laundering illegally acquired money if the National Bank of Ukraine [NBU] does not stabilize the hryvnia’s value in the nearest future.

Yulia Tymoshenko stressed that the actions of the national bank may be assessed as "a banal crime", and called on to open a criminal case against them.

Andriy Kovalchuk, in an excellent detailed "Holos Ukrainy" article [in Ukrainian and Russian] entitled "Lack of financial regulation tempts - or how the National Bank of Ukraine earns money", claims that despite the reluctance of the NBU to 'come clean' on this matter, it seems that at least $12Bn US dollars of NBU currency reserves have been frozen, i.e. is inaccessible to the Ukrainian state. This sum has appeared in the accounts of the now-bankrupt Lehman Brothers investment bank. Furthermore $1.25Bn dollars were also deposited in the "Wachovіa" bank [recently called "the worst run bank in America..LEvko ]

Kovalchuk's provides a number of conclusions and recommendations. At the moment the NBU can do as it pleases while the Verkhovna Rada and government remain mere observers but have to bear all of the responsibility for the bank's blunders [some of them possibly criminal]. He details Ukrainian laws on "The National Bank of Ukraine" that need to be urgently changed in order to overcome the current shambles. [Thanks Pete for the link]

Tonight, 412 parliamentary deputies supported a motion to create a parliamentary investigative committee to look into the NBU's activities. And Petro Poroshenko, Chairman of the Council of the National Bank of Ukraine also tonight claimed on TV that the head of the NBU Volodymyr Stelmakh has been keeping information about the bank's transactions away from him...

Note: According to the Constitution of Ukraine the major function of the NBU is to ensure the stability of the monetary unit, and the Council of the National Bank of Ukraine elaborates the basic principles of monetary and credit policy and exercises control over its execution.

An inadvertent deletion

I was moderating the comments today and inadvertently deleted the latest comment by one of the Anonymous commenters. My apologies.

BTW, the hryvna is at 9.20 on the street today. Internals in some banks are predicting 10 by years end. I was told this yesterday when the hryvna was at 8.20. Not hard to believe today.

The real show is on the ground. The rest is just sideshow. These guys live in a bubble and not only Yuschenko who deserves his share of the blame. They have no idea how this is affecting the people on the ground but they still play their game of musical chairs.

And the worst of it won't hit until spring.

Stroppy PoR

Party of Regions have responded swiftly to the newly-formed "National development, stability and order" parliamentary coalition. Below I've translated some portions of a statement on their website:

"BYuT, part of NUNS, and Lytvyn's Bloc [LB], with the support of the Communists have created a pro-NATO, pro-nationalist coalition, which, while having an insufficient number of votes but being supported by the Communists, will realise an anti-nation policy.

A prominent point of their coalition agreement was the question of priority of entry into NATO without a referendum, i.e. without the agreement of the Ukrainian people.

Other particularly troubling points, are those which mention "strengthening the defence of Ukrainian national and spiritual identity", i.e. forced Ukrainianisation."

The PoR declaration mentions the withdrawal from school syllabuses of a particular novel about the 'Great Patriotic War', and goes on..

"The Communist fraction not only did not condemn such heresy by the current authorities, but supported the authorities and its coalition with its votes in parliament.

PoR considers this fact an unprecedented betrayal by the Communists and LB of its nation and electors.

Combining falseness, lies and insidiousness, the new 'short-count' coalition has only one purpose – to keep the Tymoshenko government in power.

The coalition agreement is complete eyewash. It does not contain a serious program for overcoming the crisis. At its core are ideological messages formulated by supporters of NATO and forced Ukrainisation.

PoR warns all those who today supports the new orange-communist adventurists that they will be held responsible before the nation..

We solidarise with the nation, who, with the start of strikes and protests that are already rolling across Ukraine, are expressing their 'no' to the bungling authorities and their Communist 'yes-men'."

PoR' sulking and half-truths [on the NATO issue] are very predictable...But with only 175 parliamentary deputies, they really need Lytvyn's bloc and the Communists if they are to form a coalition together with pro-presidential portion of NUNS when/if the newly-formed coalition falls apart. Despite being the largest party in parliament, they always seem to be responding to events, rather than dictating them - maybe this is the reason for the nasty statement above.

The unofficial leader of the pro-coalition portion of NUNS, Borys Tarasyuk, claims that despite their low number, with the aid of the Communists and some PoR deputies, the new coalition will be able to operate successfully in parliament.

But the biggest loser is president Yushchenko - he has lost control of his own party..

Lytvyn on Russian TV

Tonight newly-elected VR speaker Volodymyr Lytvyn appeared in an interview on Russian TV [Watch it here ]

He called for the establishment of a normal dialogue between Kyiv and Moscow. He was against the cutting off of Russian channels from Ukrainian cable TV customers, and against the subject of the Holodomor "being transferred into the area of ethnocide," which was being done "for export".

He added that a VR committee had decided recommendation of an investigative commission report on alleged supply of weaponry to Georgia be looked into on Friday.

Speaking on the current political situation, he said: "Today there is an attempt to tear parliament apart and lead Ukraine to elections in conditions of deepening crisis." He said the president does not support the newly-formed coalition.

Every one of the above replies will be met by approving nods from PoR, but will annoy the president, who himself was interviewed by BBC World News yesterday - this is to be broadcast by the BBC on Monday. In the interview he claims he will co-operate with any parliamentary coalition but that at present "a formal announcement on the creation of a coalition does not yet exist," and that "complex debates are taking place." [English version (kind of) here ]

Tymoshenko 'jumping the gun'?

Following the surprise appointment of a new parliamentary speaker yesterday, tonight PM Tymoshenko addressed the nation in a TV broadcast.

I've translated some portions below:

"...You know that the situation in the Ukraine was recently complicated by a consciously created amoral political crisis, which made it simply impossible to resist by financial-economic means. A paralysed parliament, irresponsible, empty criticism, aggression and black propaganda - the reasons for these were a shallow fight for the second presidential term at any price.

But there is good news too. Yesterday, in the parliament, a new coalition of three political forces was formed: of our fraction [BYuT], the NUNS bloc and Volodymyr Lytvyn's bloc. Volodymyr Lytvyn was finally elected a speaker for parliament. The Parliamentary political crisis has ended. Tomorrow, in the VR normal operations will resume. Our hands are freed from shackles. Kremlin plots, state mutinies, denial of the right of people to elect their President, [all of which president Yushchenko accused Tymoshenko of..LEvko] have been exposed as banal untruths. I want to thank all political forces, fractions, people deputies, who by their voting yesterday ended this political disgrace and created a coalition. All these positive steps were made not with the aid of the President, but in spite of his active opposition to the creation of the coalition. But now our priority in parliament, after overcoming the political crisis, will be dedicated to overcoming all that is wrong and normalization of the life of each one of you...."

Tymoshenko gives details of new political and economic initiatives, and continues:

"..... And this is only the beginning of normal operation after the termination of the shameful, intentionally created, political crisis. I declare, that I will personally nurture this parliament, this newly created coalition. I will never allow the tormenting of the VR, or of the country, which we have observed in recent months. Because no presidential elections are worth political adventurers throwing the country into the abyss of opposition and chaos...."

In the 2007 VR elections, BYuT obtained 156 seats in parliament, NUNS 72, and Lytvyn's bloc [BL] 20, i.e. 248 in total - well in excess of the 226 required to form a ruling coalition.

However, Lytvyn's appointment as VR speaker yesterday supported by 154 deputies from BYuT, 40 from NUNS, and 20 from BL, i.e. by 214 deputies. So Lytyvn was elected thanks only to 27 Communist votes and 3 from PoR.

Some NUNS deputies already claim that the declaration on the recreation of this new 'democratic' coalition was not signed by NUNS head, Vyacheslav Kyrylenko, but by Borys Tarasyuk, which, in the opinion of these NUNS deputies renders it invalid.

However, it seems that the NUNS deputies who supported Lytvyn also support the new coalition, so their number is sufficient to vote through NUNS restarting co-operation with BYuT at their party meeting.

But Tymoshenko's bitter outbursts tonight, will not have helped these guys in convincing their fellow party deputies who loyal to the president, to go with them. Officially, the NUNS fraction are currently "finalising" the coalition agreement with their two partners.

If this newly-formed is successfully assembled, and if it is to work, it looks as if Lytvyn will have to use all of his cunning. He will have to constantly cajole at least some PoR or Communist deputies to support any of the coalition's parliamentary proposals, for them to be adopted.

Right now PoR will not be much worried about the durability of this new coalition. Tymoshenko will be happy with her tactical victory over the president. But what future is there for the badly-split NUNS?

President floundering.

The following truncated version in English of a fuller posting in Ukrainian appeared on the president Yushchenko's official site today:

"President's position on the situation in the VR remains the same - Iryna Vannykova

According to President’s Press Secretary Iryna Vannykova, President Victor Yushchenko’s position on the situation in the Verkhovna Rada remains the same: state deputies should resume proper work and form a coalition as soon as possible.

According to President instead of search for compromise by political partners, collusion between business groups is attempted in the Parliament, which does not have anything in common with protection of national interests.

Therefore, President Yushchenko will not take part in parliament’s sitting on December 9, as state deputies suggested and will wait for the deputies to renew their work before meeting them.

President is also ready to return to a question of early parliamentary election if he sees that national anti-crisis policy is threatened by Parliament’s inability to function properly."

The Ukrainian version includes these quotes from Vannikova: "Viktor Yushchenko considers participation in [any] parliamentary sitting to be a dialogue with Ukrainian society. Instead, for the head of state it is unacceptable when his presence is demanded [merely] to legalise business-tandems. Dialogue between those elected by the nation and the head of state is possible if deputies renew their internal self-organisation and announce political priorities."

And perhaps more ominously: "The president has taken responsibility before Ukrainian society for co-ordination of anti-crisis policy in Ukraine and for a consolidated position of [state] authority. Because of this, Viktor Yushchenko is prepared to utilise all means which would allow renewal of financial, economic and political stability in the country."

Your blogger considers that Ukraine's largest parties are trying their hardest to settle their considerable differences and make parliament work, otherwise they would be merely sitting on their hands waiting for the president to call early parliamentary elections. Both PoR and BYuT face possible major splits and problems in their own ranks if they succeed.

The president knows well that a priority for any PRyBYuT coalition would be constitutional change, diminution of presidential powers, and election of the president by parliamentary deputies. The fearful president Yushchenko has constantly strove for a subservient parliament, but by dismissing PM Tymoshenko in 2005 and dissolving a PoR-led parliament in 2007 he has made too many enemies, and will pay the price for this.

There is, however, certainly a good case to be made for the president to be nationally elected, particularly when parliament is dominated by a handful of financial-industrial groups.

Yushchenko's response to possible PoR/BYuT coalition

The following was posted on Ukrainian President Viktor Yushchenko's official website today:

"The President considers creation of a BYuT-PoR coalition to be threat to the democratic achievements of Ukraine

Victor Yushchenko considers the creation of such a parliamentary majority format quite probable. "Creation of this coalition is quite probable. Formally, today it has [already] been created," said the President.

The head of the state forsees serious threats to the democratic achievements of Ukraine as the result of such a political union.

"If this consolidation is not checked by means of ideological positions, national interests, [and] democratic interests, it could lead to serious challenges to Ukrainian democracy," said Viktor Yushchenko during press conference.

The president mentioned possible threats such as a major revision of the Ukrainian Constitution, in particular, cancellation of direct presidential elections and election of the president by parliament. "These matters, which will ruin Ukrainian democracy, do not correspond to our aspirations. It would cast Ukraine away from the sphere of stability for many years," considers Viktor Yushchenko.

In addition, the President declared that he will not permit the possibility of such events [taking place]. "Such attempts to revise the Constitution under someone will not pass in Ukraine," assured Viktor Yushchenko."

Yushchenko has not produced any evidence or argument to convince the electorate of his assertions. Your blogger considers the President will not get away with dismissing a possible constitutional majority of 2/3 of parliamentary deputies [if one is formed] for a second time.

PRyBYuT to nail Pres?

Lots of speculation that PoR and BYuT will do the unthinkable - join forces in a parliamentary coalition.

Yulia T. could remain PM, and Yanukovych may take the parliamentary speaker's chair, but afterward he may elected president by the parliament [presumably after Yushchenko is removed by a 2/3 constitutional majority?]

All the deputy PM's and the economic portfolios would be in the hands of PoR - the remainder split 50-50. Yuriy Lutsenko, Borys Tarasyuk and other NUNS 'renegades' may also sign up to this coalition.

The union is to be "guaranteed by the Kremlin and EU"

Oh, and it is "highly probable" Viktor Medvedchuk will become Minister of Justice.

Your blogger wonders what will the Pres's response to all of this be..

Yanukovych in 'Newsweek'

An interesting interview with Viktor Yanukovych in the current "Russian Newsweek"

I've translated some portions below:

Are you for Ukraine being included into the European Union?

At the first congress of PoR in 1997 we decided that integration into Europe would be the main objective of our program. For eleven years we not only have not changed this position, but are even more convinced that Ukraine should join Europe. Being territorially in the centre of Europe, Ukraine is already a part of the European community. We have improved our social conditions, have moved our standard of living to toward European standards and principles. Polls show that more and more Ukrainians support idea of integration into the European Union.

At least half of citizens of Ukraine are against the country's introduction into NATO. Along what path do you intend to go to the European Union?

Some European countries, for example Finland and Sweden, were included into the European Union, without being members of the NATO. But they co-operate with the NATO - take active part in NATO programs. There is an analagous situation with Ukraine. We have reached a high level of co-operation with NATO, and have completed work on a number of programs. We continually take part in military training exercises, in peacekeeping and anti-terrorist operations. Our citizens recognise the authority and influence of this organisation.

In the Ukrainian government the question of creation of a European security system is being discussed. What is this system and will it be an alternative of NATO?

The time has come to improve NATO. Considering that the European Union has considerably increased its membership in recent years number to twenty seven countries, it makes sense to [re]consider the concept of formation of a collective system of security for the European Union and countries next to it. Ukraine intends to take active part in the formation of such a concept. Certainly, without Russia such a concept is impossible. Such a system is not an alternative to NATO. It could come into being, or as we consider, should come into being, as a result of the reform of NATO.

Has the fact that Ukraine sold weapons to Georgia worsened relations between Moscow and Kyiv?

We still do not have a full picture whether Ukraine sold weaponry to Georgia. But, having supported to it, Ukraine became a participant in this conflict. Viktor Yushchenko made a huge error. Any third party always should play the role of peacemaker. We consider that a policy of double standards is not capable of solving the problems of frozen conflicts. For these, new laws should be developed, and such international organisations as OSCE or the United Nations, should supervise their realisation.

The Ukrainian economy has found itself in a catastrophic situation. What is the government doing about this?

..No-one in Europe understands why Ukraine, instead of tackling the problems in the economy, is participating in international political conflicts, talking about the Holodomor. Certainly, the Holodomor was a terrible crime against Ukraine, but today, before us, there are new troubles, new threats. Why can't Ukrainian leaders unite and create a union? It is not right. Look around, everyone in the world, even the greatest countries, are uniting to fight against the crisis, it is only in Ukraine where there are endless political confrontations.

Could you and prime minister Yulia Tymoshenko form a coalition?

We are actively working on this at the moment. We consider that the threat of loss of independence, the possibility of social catastrophe should unite our politicians. We should declare a moratorium on all political confrontations. The economic crisis affects every Ukrainian family. Our duty is to protect our people from full-blown catastrophe.

Yanukovych is asked whether Ukraine will ask for help from Russia, and then:
Do you expect that help will be more likely to come from Russia, than from Europe?

For us, Russia is our biggest trading partner with a trade turnover of $30Bn a year. If Russia is sick, we are sick too, and vice-versa. During my last visit to Moscow we discussed with prime minister Putin, as leaders of political parties, how we will influence the position of governments in our countries. Putin leads his government, and I lead our opposition.

Unlike Russian, Ukrainian politicians have became more pro-European. Is it true that Ukraine has changed a lot?

Russians and Russian bureaucrats agree that democratic reforms are necessary for Russia. But in Russia they are progressing slowly. In respect of democracy, Ukraine has gone far forward, and it this has already been noticed in Europe and in a series of other countries.

Your blogger has omitted bits, because of lack of time, where Yanukovych 'pans' the oranges on several issues. They are worth reading, nevertheless.

p.s. Tomorrow Yanukovych and his party may decide whom he is to 'climb into bed' with.

Yushchenko takes control of NUNS

As a counterpoint to my previous blog, which suggested a PoR/BYuT/BL parliamentary coalition could be soon formed, I've loosely translated portions of an article in the latest 'Segodnya' below:

Yushchenko will lead "Our Ukraine" to "Regiony"

NUNS held a closed congress last Saturday during which president Yushchenko replaced Vyacheslav Kyrylenko as chairman of the party. It increases the probability of creation of a coalition between NUNS, Lytvyn's Bloc [BL] and Party of Regions.

As head of the party, Yushchenko will be able to influence his parliamentary deputies more firmly. According to one expert, his appointment signifies that the president now intends to crush any resistance in his party - previously some NUNS deputies led by its previous head Vyacheslav Kyrylenko categorically refused to go on a coalition with Party of Regions. Now there was a possibility of such wide coalition, and it could mean postponement of any early election. But if a coalition does not materialize, the expert considers the most probable time for parliamentary elections to be the second half of February 2009. A decree naming the date could appear in the middle of December.

The next two weeks will be decisive for the political process - in parliament the question on appointing a new parliamentary speaker should be dealt with. Yushchenko has let it know that he sees Ivan Plyushch, who is a proponent of a broad coalition but against early elections, in that position.

However, events could develop under other scenario if 'Regional' Oleksandr Lavrynovych becomes the speaker, in which case, there is a probability that coalition a PoR-BYuT coalition could be created.

Nevertheless in 'Regiony' there is still no stable majority of deputies supporting union either with BYuT or with Our Ukraine. And position of Lytvyn, who could miss out on his fervent desire to become speaker, is not clear. Without Lytvyn and the pro-presidential part NUNS, the 226 deputy threshold required to form a parliamentary majority cannot be cleared.

BYuT and 'Regiony' already dividing up posts between them?

'Segodnya' has an article on progress on the possible formation of a BYuT/NUNS/BL coalition. Below are some portions:

BYuT and 'Regiony' already dividing up posts'

Lytvyn Bloc [BL] people say that PoR and BYuT have practically come to an agreement.

December 2nd could become as stormy as September 2nd when PoR and Tymoshenko's bloc began to vote together in the VR for anti-presidential laws. One possibility would be a repeat of voting for the very same laws. Acting VR speaker Olexandr Lavrynovych has submitted for consideration changes in the law on the Constitutional court which narrows the possibilities for the president to cancel any decision of the KabMin and makes possible enactment of a realistic impeachment procedure.

Information on behind-the-scenes movement began emerging after Yulia Tymoshenko's statement [earlier this week] giving Yushchenko a last chance to support formation of a BYuT/NUNS/BL coalition, otherwise she threatened to negotiate with other possible partners. The president's side reacted quickly and firmly: head of the Presidential Secretariat Viktor Baloha declared that Tymoshenko, having wrecked the old coalition, has no right to blackmail Yushchenko. And the head pro-presidential UNP Yuriy Kostenko claimed the prime minister's statement was only a cover for a real arrangement which already exists between BYuT and PoR.

Volodymyr Lytvyn recently unexpected stated that he supports Tymoshenko in her aspiration to create "a coalition of three". However BL deputy Oleh Zarubinsky on Friday told 'Segodnya' that words of his leader were incorrectly interpreted: "He said that this coalition would be the optimum option of those that could lead the VR out of the current situation. Concerning our consent nothing has yet been said, because we cannot talk about virtual matters. And this coalition without NUNS is a virtual matter. We all see that the majority of NUNS are against such coalition, because the president is against it. As to a BYuT/NUNS/BL coalition, these negotiations were a reality. But the've been suspended to extent that it is not necessary at all to talk about its reality today. As to PoR having very deep negotiations with BYuT, there is information that they have already reached the stage of [allocating] personnel positions".

Both BYuT and "Regiony" respond ambiguously to Zarubinsky's statements - in principle they reject them. "We are negotiating with everyone, and it is not a fact that BYuT are closer to forming a coalition with us than with NUNS," a source close to the PoR leadership told 'Segodnya',"and Lavrynovych's projects could simply be a means of pressurizing the president to decide either a coalition, or elections".

"Lavrynovych is being consistent," says Valeriy Pysarenko, a BYuT deputy. "He was then the author of these bills, and his principled position shows that he is a man of his word and deed. But I would not be so optimistic as regards December 2nd becoming a remake of September 2nd: we have already tried to work in an unstable majority mode, and now the emphasis will applied to coalition creation. We consider that in a coalition there can be parties having different views. And to frighten society with a PoR/BYuT coalition is silly right now, because society awaits exactly this both from PoR and from us. But in reality we are now as close to a coalition with PoR, as to a coalition with NUNS and BL."

From what deputies have told us one thing in undoubtedly clear: everyone is carrying out negotiations with everyone else. And they are being conducted feverishly as everyone is afraid that their competitors will outstrip them. But real arrangements, apparently, there are few. It is probable that PoR and BYuT have indeed agreed on joint voting on Lavrynovych's bill which suits both fractions, but to conclude from this a quick formation of a coalition will take place is hasty, just as it was hasty to forsee a coalition between those who removed [former VR speaker] Yatseniuk.

The life of this bill it could turn out to be short, the same as last time. Only this time it could be used as bargaining chip by 'Regionaly' who expect resolute actions on the formation of a coalition, or the announcement of early election, from Yushchenko. But if the president draws out his decision, a union between PoR and BYuT could make further progress.

*PRyBYuT in Ukrainian sounds a like 'they will nail down', or 'they will beat down..'

Tymoshenko no longer flavour of the month in Moscow

In recent times PM Tymoshenko had virtually gained the position of Ukraine's favourite politician amongst Russia's leadership. Memorandums on supply of gas had been signed and work had commenced on long-term co-operation in the gas sphere.

But a recent article in Unian explains why she is back 'in the doghouse' again. Threats to hike up the price of gas for Ukrainian consumers to stratospheric levels have been made, and prompt payment for gas bill demanded, i.e. a return to the normal situation in Russian/Ukrainian relations during any Autumn and Winter period.

Russian experts claim Gazprom have debts of over $40Bn. Until recently the company had a market value of nearly $300Bn, so the debt was managable, but now the company's value is well under $100Bn. Gas prices may be falling quite soon too as they are linked to the price of petroleum, so Gazprom need to squeeze as much as they can from their customers, like Ukraine.

Russia is having second thoughts on cutting out the gas middleman RosUkrEnerho after serious lobbying by Dmitro Firtash and Yuriy Boyko [and possibly others*].

Finally, the forthright position of the Ukraine's president on the commemoration of the 75th anniversay of the Holodomor famine has angered Russia's leaders.

Tymoshenko's measured attitude to the Georgian/Russian mini-war, in contrast to that of Yushchenko, pleased the Kremlin. The author of the Unian article claims he has reasons to reasonably assume that Vladimir Putin may have contacted the Ukrainian PM requesting she at least hints that the Holodomor may not have been a genocide, thus isolating Yushchenko and his rigid position on this issue. But this may have been a step too far for her - the political price would have been too great.

Unian concludes that Tymoshenko' recent article in 'The Economist' may have been an olive branch offered to the Russian side.

*An 'Obozrevatel' article by the excellent Sonya Koshkina sheds some light on the tangled webs linking RUE, Russian and Ukrainian businessmen, and Vladimir Putin.

Effects of global economic crisis on Ukraine's metal-bashers

Over a month ago I mentioned how hard the global economic crisis would hit Ukrainian industry, particularly in the eastern part of the country. This topic is now raising interest in the western media too.

Today 'Kommersant' provides details of the state in which a vital Ukrainian company, one that "makes machines that make machines*", finds itself.

Here are some loosely translated portions of 'K's' article:

Crisis in heavy engineering - metallurgists cancelling orders

Ukraine's largest manufacturer of heavy engineering equipment, Novokramatorsk Machine Building Plant (NKMZ), yesterday declared they are terminating the dispatch of products to Ukrainian enterprises in the mining and metallurgical complex [because] they are unable to pay for these previously ordered products and are also cancelling equipment orders for the future.

As a result, according to experts, NKMZ it will be soon forced to substantially reduce production. However, the absence of major debts will, in their opinion, help the enterprise to survive the crisis.

The NKMZ limited company specializes in the manufacture of equipment for manufacturing rolled stock, for forged and pressed components, hydraulic, mining, lifting-transporting, and specialized equipment, as well as castings. The principal owner of NKMZ is considered to be PoR VR deputy Georgiy Skudar.

Yesterday the press service of NKMZ reported that on November 21st the plant stopped production for practically all Ukrainian customers because of their inability to settle their debts and their turning away of previously ordered equipment. According to the President of NKMZ, Georgiy Skudar, the equipment whose production is now frozen was intended for the likes of 'Azovstal', 'Zaporizhstal', and the Poltava ore-enrichment plant [some of the largest plants in Ukraine..LEvko]

Skudar noted also that deliveries to Russia have been halved. "As of November 21st NKMZ has finished products on its hands having a value of 700 million [about $150m], for which customers have not yet paid.

He expressed confidence that the soon Ukrainian metallurgists will find the means to settle their debts to the plant, and this will allow NKMZ to survive the crisis. The deputy chairman of the board of enterprise, Aleksey Voloshin, added that the plant has orders to the end of 2009, but only 18% of these were from domestic customers.

The failures of metallurgical combines to acquire new equipment from NKMZ is due to the freezing by them of investment projects as a result of the economic crisis. The drop in the world demand for steel has forced Ukrainian manufactures to close down 21 of 43 blast furnaces. According to [highly optimistic? LEvko] forecasts by the Ukrainian Ministry of Economics, the downturn in manufacturing should come to an end at the end the first quarter of 2009. Financial experts consider the company is financially sound and reasonably well placed to survive the downturn.

A significant chunk of the $16.5Bn first tranche of the recently negotiated IMF loan for Ukraine has been earmarked to assist the 'metallurgists' get through the crisis. The money will help them upgrade their plant, and will help finance national infrastructure projects, e.g. bridges, road and rail construction etc.

* Many years ago a wise lecturer told me to always keep an eye on companies that "make machines that make machines".

Tymoshenko in Sweden

PM Tymoshenko visited Sweden several days ago and gave an interview to the 'Dagens Nyheter' newspaper.

I've pushed it through a translation package - here is most of it:

We want to be part of a European security structure, but since only a minority of Ukrainians want to join NATO membership of the defense alliance is not relevant, the Ukrainian government chief Mrs Yulia Timoshenko told DN. However she hopes on an association agreement with EU as early as next autumn.

Ukraine's Prime Minister, Mrs Yulia Timoshenko is to visit Sweden - her first - the middle of an extremely difficult period at home. Right now shaken Ukraine of perhaps the worst political and economic crisis in the young country's history. The visit would have taken place in May but was postponed because of the permanent political internal strife that seems to be the Slavic nation's fate.

That she has arrived in Stockholm despite turmoil at home due mainly to Sweden occupies the presidency of the EU in the second half of 2009. The hope is that Sweden may steer the Ukraine to an association agreement with EU.

- It's almost like pure vacation to come to this clean and orderly country, she says with a smile just before attending a meeting with Prime Minister Fredrik Reinfeldt.

The night before, she had been to dinner with Foreign Minister Carl Bildt and Swedish business executives. The latter are important, she stresses, given that Sweden is one of the biggest investors in Ukraine, and welcome even more.

All political forces in Ukraine agree on the approach to the European Union.

"The 'Eastern partnership', which was initiated by Sweden gives us a way into the EU. Next autumn, we expect a new association agreement, with a free trade zone. And a door open for a future Ukrainian membership in the European Union."

If the majority of Ukrainians want to enter the EU, the situation is reverse in the more iconic the NATO issue. On this point also marks the Mrs Yulia Timoshenko clearly cooler attitude than President Viktor Yushchenko, who urgently want to get Ukraine into NATO.

"Today is not more than 22-25 percent of the population supports NATO membership. Naturally, Ukraine can not stand alone, we must have been part of some form of collective security. But the most valuable for Ukraine is to preserve the unity of the country, and the NATO issue is a divisive factor. Therefore, all our parties agreed that a referendum must precede a possible entry into NATO."

The relationship with Russia is the constant question of Ukrainian politicians. Mrs Yulia Timoshenko was recently in Moscow and met Vladimir Putin, and accused ago to play under the covers with Moscow. But at the DN's question if she believes that Russia is seriously accept that Ukraine is independent she responds to Moscow lately has understood the need to have equal relationships.

"Russia is a powerful country, so they may have been difficult to reconcile with the former Soviet republics became independent states."

November 22 falls four anniversary of the "orange" revolution, led by Mrs Yulia Timoshenko and Viktor Yushchenko. Since then, the two revolutionary heroes relations turn sour, and twice their coalition has been broken. She admits that it is rooted in political ambition and competition.

"Our party wants to re-create the coalition. But we have a political system that we continually find ourselves in an election campaign. Options each year prevents politicians from agreeing. That Yushchenko and I have been dismantled safely depends on next year's presidential election. He sees me, unfortunately, more as a competitor than as a partner."

But me no buts..

I can recommend an hour-long BBC2 'This World' video documentary on 'The world's biggest arms dealer - The man that armed the world' a.k.a 'Merchant of death' - Viktor Anatolyevich Bout

Any relation to NUNS [NS] deputy, Yuriy Anatolyevich But, who in June this year, along with a BYuT deputy, walked out of the democratic coalition in the VR, turning it into a minority coalition? Or maybe not? [Check out this last (English language) link for info on some of the more mysterious characters elected into the VR]

In her excellent series of articles in 'Oboz' on Ukraine's arms barons, Tetyana Chornovil claims that officially the country accounts for about 2% of the world's arms trade - but unofficially this figure can be multiplied by five..

Baloha grounded before big week in VR?

BYuT are ready to support Volodymyr Lytvyn for parliamentary speaker later this week, if his bloc joins them and NUNS in a parliamentary coalition.

PoR mouthpiece Anna Herman hinted in a recent TV program that her party may not be supporting his candidature for VR speaker, even thought his eponymous bloc voted with PoR to dump Arseniy Yatsenyuk out of the VR speaker's chair last week. Lytvyn himself 'kept his cards close to his chest'.

Oh, and presidential attack dog Viktor Baloha may have undergone a heart by-pass operation today....

All this will influence how matters pan out later this week in parliament..

TV debate between all of Ukraine's former VR speakers

Watch Friday's two and half hour 'Inter' TV programme on the crisis inside the VR and the speaker' position, in which Arseniy Yatsenyuk, Leonid Kravchuk, Ivan Plushch, Volodymyr Lytvyn, Oleksandr Moroz, and other major figures take part, here

It's clear none of the participants wants early parliamentary elections. The last 40 minutes are probably the most interesting. There are clues as to who PoR may be supporting for new speaker on Tuesday..

What happens after Yatsenyuk's dismissal

Following the recent dismissal of VR speaker Arseniy Yatsenyuk by parliamentary deputies, many are predicting an early no-confidence vote and swift departure for the Tymoshenko government.

But, as ever, matters in Ukraine are never simple. PoR, the largest party in the VR, cannot, even with the assistance of the Communists and Lytvyn's bloc [BL], form a majority coalition.

I quite liked this article from Akhmetov-owned 'Segodnya' which discusses several different scenarios. I've loosely translated portions:

Possibility #1. A pro-Tymoshenko PoR source claims there are currently negotiations taking place between Bank Street [pres's secretariat] and the PoR leadership on the formation of a coalition comprising PoR, BL, and NUNS. "If they are successful, then Volodymyr Lytvyn becomes speaker, and Viktor Yanukovych prime minister. However an internal PoR fraction, that of Firtash-Lyovochkin-Boyko, has other plans. They see not Yanukovych as PM, but Yuriy Boyko (a former fuel and energy minister in Yanukovych's government). If the candidature of the latter is advanced, then there will not be enough votes to form the coalition. Many of PoR's pro-Tymoshenko wing will not support it."

Lyovochkin himself refuted the claim: "No coalition between PoR and NUNS will be created with the current composition of parliament.Yuriy Boyko is an effective minister, but in a Yanukovych government."

Possibility #2. NUNS deputies do not believe in the possibility of a coalition with 'Regionaly' either. "The fraction met on Thursday and the question of creation of a coalition with PoR was raised, but no-one of those present voted for it. Its true, that there were not many supporters for a coalition with BYuT and BL either. Only "Self-Defence" Rukh, and some other deputies supported this," reported a source in NUNS.
The source did not exclude, that BYuT will nevertheless attempt to pull over Lytvyn to their side by offering him the post of VR speaker together with loyal 'Nunsivtsi' and pro-Tymoshenko 'Regionaly' to form a situational majority, which would pass laws needed by Tymoshenko.

Elections. Everyone recognizes that none of the possible new coalitions or stable majorities are at all likely. This means, as before, Damocles' sword hangs above the Rada. Everything points towards early elections.On November 23rd a year will have passed from the day of adoption of the oath of office by the current parliament so all formal obstacles for conducting early elections disappear. (The constitution does permit early elections less than year after previous early elections).

NUNS in disarray. It is probable that the present the head of the NUNS fraction Vyacheslav Kyrylenko will soon depart, as demanded by the pro-Tymoshenko wing of NUNS. This matter was raised on Wednesday at the fraction's conference, but not resolved. According to a source: "Olexandr Tretyakov or Taras Stetskiv could replace him. Tretyakov is the man of influential oligarch Ihor Kolomoyskiy, who is co-owner of the 'Privat' group. The latter has been reconciled with Tymoshenko, (rumour has it that Yushchenko has balked from early elections because Kolomoyskiy has refused to finance the election campaign of his block, in contrast to last year). Stetskiv and Tretyakov have both denied they are being tipped for Kirilenko's position.

Tymoshenko's resignation. Tymoshenko's resignation from government has not been taken off the agenda. 'Regionaly' are demanding a goverment report in parliament on the communal housing situation - as a consequence a no-confidence vote against the government could be proposed.

However, even in PoR there is no united position on whether it would be better to force Tymoshenko into resignation directly now, or later. There is a view that it would be better to wait until the Spring. By that time the situation in the economy could well be critical, and her ratings could collapse. Her resignation, and either re-elections, or a new coalition headed by Yanukovych, could follow. At the moment Yulia T's ratings are still high and she still has the capability of returning to the power in the event of early elections according to source in PoR leadership.

VR sacks speaker amidst shameful scenes

Today VR speaker Arseniy Yatsenyuk 'had his chair pulled from under him', with the assistance of votes from pres. secretariat head Viktor Baloha's 'Yedynyi Tsentr' boys, even though Yatsenyuk was considered to be one of Yushchenko's 'blue-eyed' favourites.

The BBC have posted a video of today's scenes in the VR. They are reminiscent of an ice hockey brawl.

The president repudiates Yulia Tymoshenko's allegations that he was behind Yatsenyuk's "absolutely shameful" sacking. "I don't want to comment on this opinion - I have no respect for it because it is a cynical, lying, bribed position - its aim is to provide a smokescreen for the person undertaking these troublemaking schemes," said the president.

Some observers have noted that to date the president has neither condemned 'Yedynyi Tsentr' for voting with PoR, the Communists and Lytvyn's bloc, nor has sprung to the defence of Yatsenyuk in any meaningful manner. Others say that Yatsenyuk's proposal that parliament, government, and the president of Ukraine Viktor Yushchenko, all sign an agreement on temporary collaboration, which look like a step in the direction of BYuT, [see previous post] infuriated the president's secretariat and precipitated his dismissal.

However, Rinat Akhmetov's 'Segodnya' speculates: "Some deputies seem to think that now Yatsenyuk will become an ally of Tymoshenko, but BYuTivtsi are sceptical:

"The reason we gave up the struggle at the last minute [see video link above] was because we understood that this is a game conducted by the president, with Yatsenyuk's connivance. The aim is to present 'Senya' [Yatsenyuk] as a victim of collusion between Baloha and Akhmetov-Yanukovych, and then set him up in the elections as the head of his own force, to take away votes from BYuT. Or, as a variant to make him head of the presidential administration instead of the odious Baloha".

Yatsenyuk himself has confirmed that he intends to stand for election but has not made clear whether this is for the parliamentary or the presidential elections: "Without changes we will get to one place only - oblivion. I am already engaged in formation of a political force for change in the country. They sacked me so that I will return. But not here," said the former speaker.

Whatever the calculations, it's clear that Yatsenyuk's sacking makes the fall of Tymoshenko's cabinet and VR elections in the New Year far more likely now.

Signs of common sense returning?

The deputy head of the pres's secretariat, Andriy Kysylynskyi in a press release on the presidential website today says: "At the moment signs of political healing are absent, so elections will take place as soon as the economic situation settles. [But] at the same time the chances for unification of parliamentary forces in the face of the economic crisis are being maintained, as witnessed by the positive voting in the Verkhovna Rada supporting the president of Ukraine's anti-crisis bill. Any form of parliamentary majority is acceptable, be it a widened democratic coalition, or a coalition of 300 or more votes..."

"The forces that supported the president's anti-crisis bill [in the VR] - BYuT, NUNS and Lytvyn's Bloc [BL] can and should consider being coalition partners. [But] will such a coalition be viable? [...] The chance for political agreement, which the president of Ukraine has given, having halted the election process, is realistic in the [current] VR..."

VR Speaker Arseniy Yatseniuk today proposed that parliament, government, and the president of Ukraine Viktor Yushchenko, all sign an agreement on temporary collaboration.

And according to the official government portal, this afternoon PM Yulia Tymoshenko signed a memorandum of understanding with Ukraine's leading mining and metallurgical enterprises. The memorandum was also signed by the owners and top managers of these enterprises, and by trade union leaders.

The cabinet of ministers undertakes to provide lines of credit at minimum rates, and to make Value Added Tax reimbursements as quickly as possible.

The enterprises, in return, will maintain their payrolls, wage levels and other social guarantees for their workers. Industrial strikes and disruptions are the last thing anyone needs right now, so not a bad day's work. Previous history would suggest that it is too early to consider today as any kind of turning point though.

Workers' protests to be manipulated for political ends

As I mentioned several days ago, the effects of the worsening world economic crisis may soon lead to workers' strikes and street protests in Ukraine.

The current 'Kommentarii' weekly claims trade unions that are under the control of Party of Regions will use their protests to effect the removal the Tymoshenko government.

Trade unions under control of BYuT will direct their protests against the oligarchic 'fat cats' who own much of Ukraine's industrial base. Many, but by no means all, are PoR donors and supporters.

BYuT's position was expressed by the leader of the Confederation of Free Trade Unions of Ukraine, BYuT parlimentary deputy Mykhaylo Volynets, who claimed there is no reason to "throw out people onto the street". He said that he ready to lead 10 million workers in protest.

The presidium of Central Committee of Trade Union of Metallurgists and Miners of Ukraine are to meet on November 12th. Even though it is employers that are breaking agreements forcing employees to take holiday leave early and terminating pay raises, their protests will have an anti-government character.

The Federation of Trade Unions and Trade Union Associations of Ukraine held a press conference recently and complained that trade unions were not consulted prior to a parliamentary bill on minimising the effects of the world financial crisis on the Ukrainian economy being passed. The bill, the Federation claims, rides roughshod over previously agreed workers' rights. Even though it was president Yushchenko who was the author of this bill, the Federation will direct its fire at Yulia Tymoshenko rather that at the president.

In recent days there have been two meetings at the highest level between the goverment and trades unions representatives, the first attended by the minister of labour, and the second by the PM herself, but tripartite talks involving the Federation of Employers of Ukraine have not taken place because its head, PoR VR Deputy and ex-Fuel and Energy Minister Yuriy Boyko, has, apparently, been away.

The 'Kommentarii' article concludes that PoR are prepared to use trade unions and 'take to the streets' in order to force Tymoshenko out of government with the tacit consent of the President. The prime minister in her turn, is seeking counter-measures and is preparing for 'street battles' too. Whoever's street actions turn out to be more radical will become the leader of the future presidential race even though any possible protests will be irrelevant in solving the problems caused by the world economic crisis.

Everybody does it in Ukraine*

I recently blogged here and here about the alleged supply of arms by Ukraine to Georgia during the latter's recent mini-war with Russia in Southern Ossetia, and on the setting up of a temporary Ukrainian parliamentary committee to investigate this matter.

The temporary investigative committee has recently returned from Southern Ossetia and Russia. Its head, PoR VR deputy Valeriy Konovalyuk, spoke to journalists today and claimed the committee had received documents indicating that Ukrainian military experts had taken part in the conflict. "There is no doubt that a question will arise about the political assessment and responsibility, primarily of the president, who provided for the full control over the export of arms sphere from Ukraine," said Konovalyuk.

He also alleged that during their verification serious irregularities in the activities of 'Ukrspetsexport' and other companies were revealed. The temporary investigative committee will be ready to produce its report next week. They will be calling for managers of several of these companies to be sacked.

Also today the Ukrainian Security Service (SBU) passed a criminal case against NUNS VR deputy Hennadiy Moskal to the Prosecutor’s General Office for their consideration. Acting head of the SBU, Valentyn Nalyvayckenko, at a press conference alleged the case concerned granting of war veteran status to certain persons, in return for bribes. By coincidence [or not?] Moskal is first deputy chairman of the VR Committee for combating corruption and organized crime.

Nalyvayckenko also 'fingered' two BYuT VR deputies for illegal financial operations, possibly involving contraband.

Recently several members of the the Committee for combating corruption and organized crime, including Moskal, won an appeal to cancel a presidential ukaz appointing Tyberiy Durdynets deputy head of the Committee. Durdynets had worked for a long time in Transcarpathia where head of presidential secretariat Viktor Baloha had developed his business empire.

Former deputy head of the SBU, now deputy head of the BYuT VR fraction, Andriy Kozhemyakin claims these accusations have just been organized by the pres's secretariat and the SBU to discredit his political force.

A while ago I challenged a Ukrainian friend for committing a minor criminal motoring offence. He replied: "Don't worry, its OK, everybody does it in Ukraine."

Splits in NUNS widen

Representatives of six of the nine political forces that form NUNS have responded to President's statements that NUNS deputies do not want to renew the democratic coalition with BYuT, and that parliamentary elections remain the only way out of the crisis.

They declared: "We, the leaders of the majority of the political forces on which the NUNS bloc and fraction is based, are extremely surprised by the president's assertion about "the absence of trust in Yulia Tymoshenko" and about the disinclination of the NUNS fraction to return to the democratic coalition."

They accuse the NUNS leadership of avoiding party meetings because: "the puppet-masters from Bank Street [pres's secretariat] are fearful that at the first sitting of the fraction a decision will be approved to return the fraction to the ranks of the democratic coalition.. We yet again responsibly declare that the coalition of democratic forces in parliament should, and must be renewed in a matter of hours. For this only one thing is required - the wish and politicial will of the president." The signatories of the declaration "call on the president to cease his motiveless attacks against the government, the PM, and the coalition of democratic forces, particularly today, when the country needs unity to meet the challenges to Ukraine from the world financial crisis."

So...big trouble in the NUNS camp..

PM Tymoshenko, in light of the world economic crisis, today called for talks between the Federation of Ukrainian Trade Unions, employers' organisations and the government. "The world has never experienced such a shock, so today, appreciating the true situation, it is necessary to discuss how we can find mutual understanding," she said.

Yesterday that had been talk of a country-wide strike by the Federation if the government representatives refused to talk to them about measures to ameliorate the effects of the crisis.

p.s. The best translation I can provide of Mykola Azarov's comment to Tymoshenko during Friday's TV debate was: "First of all I would like to say, as a women, personally, I like you [nravitisya] very much....[guffaw's of laughter in the studio..close-up of Yatsenyuk, the pres. Yanuk]..so there’s no need for the accusation that our faction does not like you.." [See a video clip of this here ] I think Tymoshenko was really taken aback by this. An experienced politician like her should be able to cope easily with this type of comment - normally she is quick-witted enough to give as good as she gets, or better; sometimes using double entendres. Maybe she wanted to play the 'wronged victim role' which she does well, or maybe was just having an off-day.

Ukraine's public debt

During Friday's live marathon TV debate in which president Yuschenko and PM Tymoshenko sat with a couple of metres of one another, the president accused the PM's government of plunging into debts "like a bitch into fleas”. [This was not the only mysogynistic remark made during the debate.]

In fact Ukraine's public debt as percentage of gross domestic product ratio was recently a remarkably low 12%. Well over one hundred countries, including all the world's major democracies, have a higher public debt to GDP ratio.

In August this year this ratio dropped to 9%.

Your blogger has an iron rule not to make disparaging remarks about any politician, and will not make an exception for Ukraine's president who was talking with head head up his ****

p.s. Watch Yulia Tymoshenko answering questions in Sunday night's hour-long '5-iy Kanal' broadcast here

In a masterful performance she bitterly complains about her treatment in Friday night's 'Inter' broadcast almost at the end of this video recording.

p.p.s. There are reports that there could be mass protests by metallurgical workers and miners by the end of the week. Forced lay-offs and axing of wages resulting from the global economic down-turn are beginning to bite in Ukraine..There could be half a million more unemployed workers in Ukraine by Christmas..

Ukraine's politicians in major TV debate

Watch yesterday's unprecented 4 hour TV broadcast on overcoming the economic crisis facing Ukraine, in which virtually all of Ukrainian political 'big beasts' took part, here

A nice resume here

There is plenty for body language experts to analyse in the broadcast. The seating arrangements, as others have noted, were absurd. Government and opposition should be afforded equal status - Viktor Yanukovych, who is leader of the largest parliamentary fraction, should not have been sitting in the 'cheaper seats'. The president, from now on, may be nick-named emperor Viktor Napoleonovych..

In my view the programme's producers should have included unbiassed analysis and background on the current global economic crisis, and how this affects Ukraine for its viewers, before the debates took place.

The glitzy studio set contrasted sharply with amateurish visual aids presented by some of the politicians.

Kluyev interview

Andriy Kluyev, one of PoR's leading deputies, was interviewed by the 'Delo' business daily in an article entitled: 'Link-man between Yanukovych and Tymoshenko'.

Here are portions:

Q. Part of Party of Regions became initiator of a coalition with BYuT on September 2nd. How did this arise and why did nothing come of it?

[Note: On that day PoR and BYuT voted together in parliament to reduce the president's powers, infuriating the president Yushchenko. His NUNS bloc broke away from their coalition partners BYuT, and gave Yushchenko a pretext to call snap elections.]

A. Unfortunately, for quite a long time PoR and BYuT were rivals. An enormous mass of problems has sprung up which must be untangled. Naturally, it is physically impossible in a short time to solve these questions. Look, there are a number of questions, on which we reached consensus. We must morally realize that we should trust each other. This is a matter of time. I consider that if after elections, or without them, a coalition between BYuT and PoR is formed on these or other conditions, our country will turn from being a politically unstable, to a stable and viable state.

[Note: Tymoshenko several times recently declared that BYuT would not enter any parliamentary coalition with PoR because they promised not to do so during last year's snap election campaign.]

Q. And on what conditions can such a coalition take place?

A. On the conditions of understanding that we are obliged, at the end of the day, to form an effective authority, which would work in a stable fashion for at least 4-5 years. Surely, besides short-term anti-crisis measures, it is vital we should accept a long-range development program for Ukraine. We need, just as the air we breathe, a packet of reforms on the elimination of structural disproportions in the economy, on the creation of new high gross value addition branches of industry, on improvements in the conditions of conducting business, on improvements in the quality of the life of citizens. [Any] new coalition must be built on the understanding that Ukraine can no longer lose time on conflicts...

Q. Who was the initiator of negotiations [between PoR and BYuT] then?

A. Both sides. Nothing ever happens without mutual wishes. There was mutual understanding of the fact that we should change something in the country. However, this did not lead to any coalition. On one hand, the fact that Yulia Tymoshenko's trip to Moscow went well and she was cordially received there has been actively discussed. They say that Viktor Medvedchuk was involved. On the other hand, Viktor Yanukovych declares, that is possible the remnants of SDPU(o) may join up with Party of Regions. What then is the political role of Viktor Medvedchuk?

Viktor Vladimirovich [Medvedchuk] is my friend. I consider that if he returns to the active politics in Ukraine - the state will only win. He is a competent specialist, dynamic… If he enters PoR's lists of candidate deputy (if elections do after all take place) - this will be very good."

As I mentioned in my previous blog, Kluyev considers any snap parliamentary election will probably be postponed until February next year. He says that early elections was not PoR's idea and they are not a panacea to cure Ukraine's ills.

p.s. 'Ukrainska Pravda' gives some details of VR deputies who failed to support a bill to raise finances for the early elections. The motion was not carried because only 222 votes could be raised, 4 short of the minimum required. Over 40 deputies from NUNS failed to support the motion, and included those from Ihor Kolomoysky's group. Oddly, Ivan Plyusch and Petro Yushchenko's cards did not register a vote either. Although most PoR deputies supported the motion, several big-names amongst their ranks, for various reasons, did not.

Update:

PoR seem to have gone 'lukewarm' on the elections. Leading PoR spokesperson Hanna Herman says a PoR conference scheduled for today will not take place.

"We will not hold the meeting because a date for the elections has not been determined and it is not clear at all if there will be elections or not."

Chances of December VR election receeding?

Ukraine`s parliament has given initial approval to a package of bills needed to receive an emergency loan from the International Monetary Fund, BYuT and NUNS voted together, but only two PoR deputies supported the motion.

But the parliament failed to introduce changes to the budget and provide 400 million hryven for elections even though NUNS deputies, voting with PoR to support the motion, used the voting cards of absent colleagues. The voting result indicated 170 out of 172 PoR deputies supported the motion, but only 35 Nasha Ukraina deputies voted with them. The NUNS bloc won 72 seats in last year's VR elections. [So 'heap big' problems in the presidential camp - opinion poll ratings show most if not all of the NUNS deputies would lose their seats in any early election - turkeys voting for Christmas??]

Yushchenko admitted that elections cannot take place without funds being first approved by parliament.

Tymoshenko now claims the Orange coalition can be brought back to life again.

Is this part of [alleged] pre-arranged set-up for a possible deferred parliamentary election in the Spring?

p.s. The general director of the huge Ilich Mariupol MetKombinat, Volodymyr Boyko, declared his plant is in severe economic trouble and that he would agree to its nationalisation. Boyko said that the situation is bad in all of Ukraine's metallurgical plants, and gloomily predicted "Hundreds of thousands of workers could find themselves on the street in the near future."

Update: Even PoR big-wheel Andriy Kluyev considers elections could well take place February next year.

Yushchenko's plan - Spring elections?

The proUA website carries an interesting piece claiming that last Sunday president Yushchenko and PM Tymoshenko met secretly at his dacha outside Kyiv and agreed to postpone the snap VR elections, currently pencilled in for December 14th, until Spring next year.

In order that the president does not lose face and is not seen to be caving in to Tymoshenko's demands, his excuse will be that the recently-agreed IMF credit of $16.5 billion for Ukraine is to be granted on the condition that political stability is returned, i.e. no early elections to take place.

After many weeks of claims from the president that the only one way out of the current crisis is early elections, deputy head of the president's secretariat Maryna Stavniychuk said, "[VR] Deputies should urgently determine a way out of the political impasse : either [agree to] extraordinary elections, or to the formation of a new parliamentary coalition."

A new BYuT/NUNS/Lytvyn bloc [BL] coalition had been proposed but NUNS did not see any point in giving Lytvyn the VR speaker's chair. Arseniy Yatsenyuk has pretended to have forgotten about his own resignation declaration.

Sources of proUA believe that delaying the elections until Spring suits both presidential and prime minster's teams. Despite major problems being faced by the KabMin, Tymoshenko nevertheless remains in charge of government.

The delay gives the presidential camp time to plan and prepare a new political strategy. If after the elections Yushchenko decides to enter into a coalition with Party of Regions this could be done indirectly via new political groupings led by Yatsenyuk, Chernovetsky, and possibly Baloha, or combinations of these, thus reducing the damage to his own political image before the presidental race begins.

There are already signs that the president and PM's agreement was very loose and not all details were 'nailed down'. Had everything been agreed, an anti-recessionary package should have been introduced in the parliament agenda signed by speaker Yatsenyuk or Yushchenko. After the collective voting of BYuT, NUNS and BL, a new coalition could have been created between them.

However Yatsenyuk proposed that the first point of the agenda would be NUNS deputy Ksenya Lyapina's bill ensuring funds for the early elections would be provided. BYuT deputy Roman Zabzalyuk admitted that he and fellow BYuT deputies blocked the parliamentary podium as the first words of the speaker had been uttered: "as a reflex reaction." There had been no instructions previously contrary to this from above.

After this a presidential anti-recessionary project appeared, which BYuT agreed to support in the evening, but it did not mention money for elections, so there is currently no threat of dispersal of parliament.

proUA suggests that the following Yushchenko-Akhmetov post election plan is gradually coming into focus:

Snap election in the Spring.

Viktor Yanukovich to be dumped by Party of Regions so that he does not get the PM's chair, and later the presidential chair, enhancing Yushchenko's chances of a second term.

Creation of a broad coalition of PoR and pro-presidential fractions possibly headed by Baloha, Yatsenyuk, Bohatyryova, Chernovetsky,and Lytvyn.

Formation of a Cabinet of Ministers led by a 'technical' prime minister, e.g. Raisa Bohatyroyova or Yuriy Yekhanurov. The president receives the 'humanitarian' ministries and the Ministry of Finance, so retaining control of taxation, customs, etc.

Andrey Klyuyev, who has been spotted in the last few days in the company of Rinat Ahmetov, to be first deputy-premier. Yuriy Boyko to head the 'fuel-energy complex'. Akhmetov man Volodymyr Kozak, who two years ago was chairman of the Ukrainian State Railroad, to head the ministry of transport and communications.

Such a scenario would be very attractive to Yushchenko and one for which he may well be striving.

p.s. There has already been speculation that a workable new parliamentary coalition could possibly be assembled by individual deputies, even though such coalitions are supposed to be formed by political fractions.

p.p.s. For those interested on what really happened in South Ossetia check out this BBC article with links to follow-on video and radio programme.

Bad news for Donbas

PoR leader Viktor Yanukovych has announced that the Mariupol Metallurgical Plant [Mariupolskiy met-kombinat im. Illicha], the largest in Ukraine, has stopped production.

The plant, a workers' collective, has about 60,000 employees on its books. They have been put on 'reduced wages'.

LEvko fears this is a significant indicator of the economic crisis facing the country - maybe the greatest in the country's short independent history. Wind-down and start up at plants such as MMK im. Illicha are major operations - they cannot be switched off and on at will. There could be a possibility now that it will never restart.

The value of last year's production at the plant was nearly 18 billion hryven.

Elections to be moved back yet again?

"I considered, and consider early elections during a world financial crisis to be a crime against the state. And I, by all possible means - legal, absolutely open and political, will not permit these elections to take place, because this is practically a war of everyone against everyone else. There will be no time for political forces to defend the country from political crisis, but there will be only a fight for every percentage point during the parliamentary elections," PM Tymoshenko said today.

And deputy head of the Central Electoral Commission, Andriy Mahera claimed that it would be impossible to hold early parliamentary elections before 21st December. The president had moved the nominated date for elections forward by one week to the 14th, but according to Mahera: "52 days remain until the 14th, but the time [required] for the election process for extraordinary elections should be from 54 to 60 days."

The president has nailed his colours to the mast. Today he told the BBC that he expects a new coalition and government to be formed by January 1st 2009. Recent political history in Ukraine, drawn out, tortuous negotiations in forming parliamentary coalitions, their instability, and recent opinion polls on how any future parliament would stack up, all suggest he is out of touch with reality.

If elections are postponed again until after the Christmas recess, calls for combined early parliamentary and presidential elections will grow ever louder..

Shuba died with smile on his face..

Today's 'Segodnya' has a melodramatic write-up on Volodymyr Shuba's funeral [so soon? - see previous posting for more on this guy] entitled:

"Eyewitnesses: Shuba's face says his death was not an accident"

"A sarcastic smile was frozen on it, as if he knew who shot him," a colleague from the prosecutor's office who wished to preserve anonymity told us... "and the corners of his lips were unnaturally turned down".

"People got a shock," a colleague agreed - "Volodymyr Vasylyevich has a strange strip on the cheek, like a twisted jaw".

Rumours about the non accidental nature of the death of the city prosecutor strengthened after the funeral. "The death of Shuba was a slap to the law-enforcement system," said former-colleague, Ministry of Internal Affairs Colonel Aleksey Goncharov.

A person, who knew Shuba well gave 'Segodnya' a gloomy prediction: "The prosecutor is not the first nor the last victim of battle for power in the Dnipropetrovsk, or of raiders' seizures of property. He got involved wherever it was necessary and wherever it was not - in any building site, any market."

The source criticises the investigators of Shuba's death for constantly changing their story, and ends: "Accident? Don't be stupid. They rang me and told me: "That bent-barrelled gun of Kushnaryov's has been fired a second time…"

The article describes the official version of events surrounding Shuba's death, but the head of "International Anti-terrorist Unity" Colonel of the Reserve Alexander Dichek, expressed himself on this version thus: “Yes, the investigation must establish the cause [of death]. But the trajectory described resembles, please excuse me, circus tightrope walking”. [tsirkovuyu ekvilibristiku]

P.S. This from Bloomberg: The global financial crisis is hitting more vulnerable emerging markets as investors shun riskier assets in countries with big current-account deficits in a flight to safety. Ukraine has the worst creditworthiness of Europe's emerging markets, based on the cost of credit-default swaps, which protect bondholders against default.

Prosecutor Shuba slain in Robin Hood restaurant riddle

Yesterday the Dnipropetrovsk chief prosecutor Volodymyr Shuba was shot dead in an 'accident' at the 'Berkut' firing range near the "Robin Hood" restaurant in his home town [see photo in the 'Segodnya' link below.]

According to two witnessess, the Saiga hunting rifle he was using dropped from his hands, its stock hit the ground, and a bullet round was accidentally discharged from the weapon ripping through his heart. The bullet was found embedded in the roof of the premises. [PoR big-shot Yevhen Kushnaryov was allegedly shot with a similar weapon a couple of years ago]

Today 'Segodnya' provides background and speculation surrounding this Dnipropetrovsk 'avtorytet's' death in an article entitled: "Death of the boss of Dnipropetrovsk Shuba could be start of bloody realignments"

According to the official version, Shuba, who was one of the most prominent persons in the region, died during firing practice, but many do not believe it was an accident. .

'Segodnya's' sources claim that the rifle which caused his death was a gift with which he had been presented with the day before. Others claim a very close friend was demonstrating his own rifle to him. There were allegedly two of Shuba's colleagues from the prosecutor's office present with him at the time of the 'accident', but several present and former high-ranking officers of the Prosecutor-General's office have expressed doubts that his death was accidental.

In the opinion of one 'Segodnya' source, Shuba may have been eliminated by those who did not want his further promotion - he had been tipped to be a future Prosecutor-General of Ukraine. Unofficial sources confirm that people close to prime minister Yulia Tymoshenko were actively striving for this.

Deputy Prosecutor-General Sergiy Vinokur said the circumstances surrounding Shuba's death would be thoroughly checked, but he was inclined to think it was an accident - nothing in common with intentional homicide.

Until his death Shuba was considered a major figure of authority in the region - "No-one in law enforcement agencies could even sneeze without his permission in Dnipropetrovshchyna," according to one source. He was a most significant figure in the resolution of questions concerning property, said another.

Politologist Kost' Bondarenko says that the death of Shuba appears suspicious. "He had numerous enemies. He was undoubtedly the top dog in the city. Without his approval, no serious matter e.g. on land allocation or on the purchase of property could be decided. He feared neither governor, nor mayor, nor local oligarchs." But recently he had been involved in land disputes, the losers of which were deputies from BYuT…

Influential Dnipropetrovsk journalist Vladislav Romanov does not exclude, that after his death, new 'realignments' could take place. "It wasn't by accident that this shot sounded, when the attention of everyone in Kyiv was drawn to the re-elections", he said.

Shuba was a former chief of the prosecutor's office in Crimea, and simultaneously deputy Prosecutor-General of Ukraine.

One of Mykola Melnychenko's tapes allegedly includes a conversation with Kuchma of the-then head of the Tax Administration Mykola Azarov, charging Shuba with providing 'krysha' or 'roof' for liquor and vodka businesses in Crimea.

Shuba arrived in Dnipropetrovsk in year 2000. In 2003 the new Prosecutor-General Gennadiy Vasil'yev (from Donetsk) sacked him but he was restored in his post after the Orange Revolution when the Svyatoslav Piskun returned to the Prosecutor-General's post.

When asked whether Shuba was a man of Tymoshenko, Yushchenko, or of the local oligarchs, those in the know in Dnipropetrovsk answered: "Shuba was a man of Shuba - he didn't bow to anyone."

Should has stuck to bows and arrows.

"Such a lot of guns around town and so few brains" Philip Marlowe.."The Big Sleep"

p.s. Borys Penchuk, author of "The Donetsk Mafia", and a former key witness in the now-closed extortion case against senior opposition MP Borys Kolesnykov, has now been taken into custody himself by a Donetsk district court decision on suspicion of extortion and perjury against Kolesnykov.

Penchuk, who had been feared kidnapped, was arrested in Kyiv on 10th October by officers of the Donetsk organized crime directorate and delivered by force to Donetsk. Penchuk's lawyers are preparing an appeal against his detainment in custody before any trial.

History repeating itself

BYuT parliamentary deputy Andriy Kozhemyakin today claimed that the state security service [SBU] and State Defence Administration [UDO] are 'planning the realization of a force scenario and establishing direct presidential rule'.

He claimed the president's secretariat is planning a Pinochet-style "Chilean scenario"' and appealed to the power structures not to give in to provocations and not to obey illegal orders of their leadership.

He quoted the words of Salvador Alliende: "They have the power and they can crush us, but the social process cannot be stopped either by force or by criminal means."

All of this may sound alarmist, but it has to be remembered Kozhemyakin rose through the ranks to become, in 2005, deputy head of operations of the SBU and head of the administration for fighting corruption and organized crime. His father was a lieutenant-general in the SBU.

The press service of the SBU have responded calling Kozhemyakin's claims 'rubbish'.

About 60 fully armed special forces personnel have also been 'protecting' the Central Electoral Commission building. The SBU denied that any of the 20 or so BYuT deputies present today had been beaten up..

The country is sliding into the same kind of mess as last year when the president dismissed a PoR-led parliament, except last year Tymoshenko was cheering the president on.

Tomorrow Tymoshenko is flying to Brussels where she is to meet Javier Solana - the EU's High Representative for the Common Foreign and Security Policy.

Orange battle of attrition continues

President Yushchenko has decided that if a judge doesn't decide in his favour then he can be hassled and possibly even have criminal proceedings instituted against him..Courts that support BYuT appeals to annul his decree on dissolution of parliament can themselves be liquidated by decree.

PM Yulia Tymoshenko is adamant - "I know that they [early elections] will not take place..it is necessary to do everything so that there will be no elections," she said in a TV interview yesterday.

To underline this, her cabinet refused to allocate funds from state budget reserve funds to the Central Electoral Commission for conducting early elections, despite a 5 p.m. deadline set by the president.

The State Control and Audit Administration have warned the PM that if the cabinet permits early elections to be funded from the state reserve fund they may be acting illegally. The fund has recently been boosted in order to make good infrastructure losses caused by last June's severe floods in Western Ukraine.

What will the struggle of wills between the pres and PM bring next? Ukrainians like a lengthy New Year and Orthodox Christmas break. If the VR elections were to be switched to some time after this it would be late Spring before parliament would reconvene - about the time the presidential elections would be gearing up... A deal clincher could be combined VR and presidential elections..Maybe PoR would buy this...but the pres?

President's 'heavies' in court..

Ukrainian Security Service [SBU] personnel in the Administrative appeal court in Kyiv today.

Earlier a group of BYuT parliamentary deputies had blocked the hearing of a complaint from the president's secretariat on the earlier decision of the Kyiv District Administrative Court to annul the president's ukaz calling for early parliamentary elections.

BYuT has accused the president's secretariat of applying undue pressure on the court to force them to restore the President's ukaz, and claim their deputies were in court merely to protect court staff "from pressure applied onto the court body". According to one of deputies, the court has no right to consider the secratariat's appeal until Thursday of next week in any case.

Other sources claim it is the SBU are that are affording 'protection' to three judges of the Administrative appeal court

Deputy head of the Central Electoral Commission Andriy Mahera has said in an interview that his commision has suspended any preparatory work arranging the proposed December 7th elections.

p.s. In a TV debate on 'Shuster Live' PM Yulia Tymoshenko claimed on several occasions that the December 7th parliamentary elections ordered by the president will not take place.

See a lively video of her full performance together with that of Viktor Yanukovych [and transcript] here

Yushchenko's untenable position

As Mustafa Nayem and Serhiy Leshchenko point out in an article in U.P. any Yushchenko-led party standing for election in the proposed December 7th elections will be in an untenable position.

The president in his address to the nation on Wednesday explained that the reason for calling early elections was BYuT's 'betrayal' of its partner NUNS in the democratic coalition.

On returning from the summer recess on September 2nd BYuT promptly voted in concert with PoR to enact laws weakening the president's authority.
Yushchenko said: "The events of 2nd September and those decisions which were accepted in parliament, unconditionally made the [further] existence of the democratic coalition impossible. And from 3rd September, de jure, the collapse of the coalition was announced [by NUNS].

In early VR elections any President-led party will most likely come in third, or worse, the first two places being fought over by PoR and BYuT.

Any rapprochement between BYuT and NUNS is most unlikely as this would mean returning to Tymoshenko powers that president has taken from her by dismissing parliament. Furthermore Tymoshenko and Yushchenko will be slugging it out for the orange electorates' vote in next year's presidential elections.

On the other hand, any hint of movement by the presidential bloc toward PoR will be fully expoited by BYuT as indication of an oligarchic conspiracy between PoR money-bags Rinat Akhmetov, and the president.

LEvko thinks that just over a month ago BYuT and PoR launched a plan that had clearly been prepared during the summer recess to truncate the president's authority. Now PoR are quite keen on early elections because they have a good chance of winning and returning to government. If PoR are back in power after the election how can the president be sure they will not revert back to that same policy as agreed with BYuT during the summer and 'shaft' him again? He knows that as president he could probably live with one opponent..but not with two..hence the presidential secretariat's vicious campaign to destroy the weaker.

It was a PoR-led parliament that was dismissed kicking and screaming by Yushchenko last year. This year it is BYuT. My guess is that there is a lot of capital deposited in PoR's 'grudge bank' last year waiting to be cashed in by PoR if they return to power in the snap election... particularly as there are huge differences on policies between the president and PoR on such key topics as relations with Russia and the Georgia/South Ossetia crisis, NATO, Russian as a second state language etc. And Yulka T. will be hovering to finish off the job too..