1. The announced resignation of Prosecutor General Viktor Shokin appears to have placated Parliament for the moment and bought Yatsenyuk more time. At long last, President Poroshenko called for the resignation of Prosecutor General Viktor Shokin (along with Yatsenyuk’s). The controversial Prosecutor had become a focal point of frustration with Ukrainians who viewed Shokin as the key person preventing the prosecution of Yanukovych era officials, and as an impediment to fighting corruption. The President’s statement followed by the public announcement of Shokin’s resignation, appeared to appease Parliamentarians seeking a sacrifice of a high ranking official since Shokin is the only Cabinet Member less popular than Yatsenyuk. As a result, the resignation deflated the desire to sack Yatsenyuk and in effect, has bought the Premier another six months. However, in a classic Soviet political move, staff at the Prosecutor General’s Office confide that while Shokin has written a resignation letter, he has taken sick leave to delay his replacement for as long as possible. Ukraine’s antiquated Communist labor laws prevent the firing of public officials who are on sick leave. Admittedly Shokin has been battling lung cancer for almost a year (unlike most perfectly healthy Ukrainian public officials who have hid behind “sick leave” to remain longer in their posts), but his diagnosis is unlikely to evoke any sympathy from the public. In fact, by taking sick leave, Shokin will further infuriate the public and reinforce the perception that the government is not committed to reform.2. There are enough votes to fire Yatsenyuk but no agreement on who replaces him. Following Yatsenyuk’s defense of his Cabinet’s performance before Parliament yesterday, there were two key votes. First, the Parliament voted with 247 deputies to declare the work of the government as unsatisfactory. Second the Parliament failed to get the 226 votes needed to dismiss Yatsenyuk as Premier, gathering just 194 instead (see Chart 1 below). By casting two votes, Parliament was sending a clear message that 1) the Cabinet must be changed; but 2) Yatsenyuk can stay longer until a replacement is decided. Thus, with Yatsenyuk continuing as Premier, new elections will temporarily be avoided. This was a key requirement conveyed by US Vice President Joe Biden during his December visit. The private message was clear and could be paraphrased as, “you can have any Premier you want, but absolutely no early parliamentary elections”. Thus, Yatsenyuk will serve until July, but with a “sword of Damocles” over his head. On Monday Poroshenko met with his faction and declared that the government’s work was unsatisfactory. On Tuesday he called for the Premier to resign. However, over the weekend, an extensive lobbying effort took place to try to persuade Finance Minister Natalie Jaresko to accept the Premier’s post. President Poroshenko made his appeal and even US Vice President Joe Biden is said to have intervened to try to persuade Jaresko. Not only is Jaresko viewed as a “no nonsense” reformer, but she was the only candidate that could keep the coalition together and avoid a new election. In contrast, former Georgian President Mikheil Saakashvili has been openly campaigning for the post since autumn, but his short sighted attacks on Yatsenyuk have ensured that he cannot mathematically get the 226 needed votes since Yatsenyuk’s People’s Front faction will refuse to support the ambitious Georgian. After it was clear that Jaresko had refused the position of Premier in a General William Sherman manner (i.e. “if nominated I will not run; if elected I will not serve…”), Poroshenko was left scrambling to find another candidate. Lacking an agreeable candidate, the President flirted with proposing his protégé, Speaker Volodymyr Groisman. However his candidacy garnered no enthusiasm from a public and Parliament already irritated at the President, due to the perception that he is simply replacing the “Donetsk clan” with his “Vinnytsya clan”. In the end, Parliament voiced their disapproval of the government but required that Yatsenyuk extend his term to give the decision makers time to agree on a replacement. Under Ukraine’s Constitution, a “no-confidence vote” can only be considered once per “session” of Parliament. The current “session” of Parliament ends on July 22nd, and historically Parliament returns to work the last week of August to begin the next “session”. That gives Yatsenyuk five months of job security, which is hardly a ringing endorsement. However, it does avoid new elections and give the government time to reorganize and reorient itself towards reform.
In the meantime, the Cabinet of Ministers will be reshuffled. Yatsenyuk stays and Jaresko will continue with managing the country’s finances, but beyond that anything is possible. There are rumors of Jaresko being named First Deputy Prime Minister with the Finance Ministry portfolio remaining with her. Again, Saakashvili has also sought the First Deputy Premier’s post but his presence in Washington this week (at a key time in the decision making process for the new Cabinet) suggests that he is not under serious consideration. Former First Deputy Premier Vitaly Yarema (and Prosecutor General before Shokin) has also been mentioned for the post. Due to Abromavicius’ resignation and allegations, Deputy Poroshenko Faction Leader Ihor Kononenko is no longer under serious consideration for the position. It is likely that a Vice Premier for European Integration post will be created too. This might prove a better fit for Saakashvili since it would give him the international profile he enjoys, while simultaneously getting him back to the capital to be closer to the political maneuverings. Vice Premier and Culture Minister Vyacheslav Kyrylenko is rumored to be on the way out and Valeriy Voshchevsky’s Vice Premier for Infrastructure, Ecology and Construction post has been vacant since September. Other Cabinet posts likely to be changed include the Minister to the Cabinet of Ministers (Onishchenko is likely to go the Central Election Commission), Minister of Economic Development and Trade (Abromavicius has refused requests to return to the post), Minister of Education and Science (Kvit is rumored to be replaced by People’s Front MP Liliya Hrynevych – although with the Premier weakened, he may decline to push this change for now), the Ministry of Ecology and Natural Resources (vacant since Ihor Shevchenko resigned last July) the Prosecutor General (will Deputy Prosecutor Vitaliy Kasko who quit last week return to take Shokin’s position?), and possibly even the SBU Chief. It is unclear if the three ministers who quit and then withdrew their resignations (Pivovarskiy at Infrastructure, Pavlenko at Agriculture, and Kvitashvili at Health) will stay on in the new Cabinet. In addition, after most of her faction voted to sack her former ally as Premier, Yuliya Tymoshenko announced her party would be withdrawing their Cabinet Minister from the government. That means that the Ministry of Youth and Sports (Ihor Zhdanov) is also likely to be changed this month.3. Ukrainian politics continues to make strange bedfellows. In analyzing the votes on disapproval of the government and to sack Yatsenyuk, there are some interesting nuances (see chart 1 above). First, the Poroshenko faction lost 23 deputies between the disapproval of the government vote and the vote to fire Yatsenyuk. This suggests a growing lack of discipline within the faction as well as confirms the lack of a clear successor for Prime Minister. In other words, “the devil you know” (i.e. Yatsenyuk) is better than an unknown candidate for the position. Second, the oligarchs (specifically Kolomoyskyi, Akhmetov and to a lesser degree Ivakhiv) supported Yatsenyuk for the same reason as the 23 Poroshenko faction MP’s. That is, the “devil you know” is better than the devil you don’t know. From the Renaissance, Opposition Bloc and People’s Will factions, only 14 of 86 deputies voted to dismiss the Premier. The oligarchs may not like Yatsenyuk, but they view him as more predictable and easier to deal with than either Jaresko or Saakashvili. Third, Tymoshenko’s Motherland faction follows the Radical Party of Oleg Lyashko into de facto opposition – at least for the moment. Tymoshenko provided 15 of her 19 votes against Yatsenyuk and withdrew his lone Cabinet Minister hours later. With Tymoshenko pushing for new elections, she will drive a hard bargain in an attempt to either secure prime Cabinet ministries (not the Ministry of Youth and Sports which her party currently has) or go into more vocal opposition. Fourth, People’s Front and Renaissance (Kolomoyskyi) remain the most loyal supporters of Yatsenyuk with not a single MP from either faction voting to dismiss the Premier or government. This support from People’s Front means that Yatsenyuk will play a significant role in the selection of his replacement, as without new elections (and with Jaresko declining to take the Premier’s post), it is almost mathematically impossible to form a new government without those 81 votes. Finally, in what proves that if you are automatically against everything the government does, you sometimes forget what you are “for”, Opposition Bloc MP Nataliya Korolevska complained that she was confused and voted “against” the government’s dismissal. Apparently she thought that by being “against” the government she needed to vote “against” its’ dismissal. Korolevska wrote on her Face book page, “It’s a nightmare. I decided that I need to vote for the resignation using the button “against”. I am against this government!!! So I filed a statement in the registry!!! That I AM FOR the resignation of the government!!!!!!” Presumably the Parliament Registry will update the vote count to reflect her mistake although it will not change the outcome of either vote. 4. The animosity between Poroshenko and Yatsenyuk has now reached Yushchenko-Tymoshenko 2005 levels. After President Yushchenko fired then Premier Yuliya Tymoshenko in September 2005, the relationship between the two never recovered. Even in 2007 when they were forced to work together again following the snap Parliamentary elections, the relationship was dysfunctional at best and adversarial at worst. By publicly calling on Prime Minister Yatsenyuk to resign yesterday, President Poroshenko has formalized the conflict between the two men. The fact that the Prime Minister survived the political assault (similar to Tymoshenko in 2005), makes finding common ground extremely difficult. Every piece of legislation or government decision going forward will no longer be viewed in a spirit of unity and compromise, but instead in an environment of political intrigue and suspicion. In effect, mom and dad are living separately because the judge hasn’t granted them an official divorce. Meanwhile the kids (Ukraine) will suffer because of the backbiting and arguments between the parents (Poroshenko and Yatsenyuk). Just like judge divides assets in a divorce, Poroshenko and Yatsenyuk will now argue over Cabinet posts. Given the outside pressure from the West, the division of Cabinet posts will likely be easier than actually running of the government going forward. Suffice to say, this arrangement is not going to last long. Technically, Yatsenyuk will remain as Premier until July and then can be replaced in the next Parliamentary session starting in August. While this is the most likely scenario, it is also possible that Yatsenyuk may resign early in order to have more negotiating leverage in the selection of his successor. Such an early resignation would probably come following some legislative or government victory. In this way, Yatsenyuk could “go out on his own terms”. Yatsenyuk’s resignation in July 2014 triggered the October 2014 Parliamentary elections, so the precedent for his resignation exists. While Yatsenyuk will certainly not want new elections given his party’s collapsed rating, by resigning the post himself he can use his factions’ 81 votes to create the next government. Again, without those 81 votes, it becomes difficult mathematically for any candidate to win confirmation as Premier unless they rely on the support of the Opposition Bloc and oligarch factions (even then the math is extremely challenging). Therefore, given the strained relationship between Poroshenko and Yatsenyuk, the Prime Minister may yet have the final say over the next Premier rather than “cling to his chair” and wait for his political “execution date”.
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But What If Elections Were Held Today? With Yatsenyuk continuing as Premier, any vote to dismiss him could only take place in the next session of Parliament which will likely start in late August. If there is political will to dismiss Yatsenyuk at that time, the Parliament would have 30 days to form a new government. In lieu of a new government approved by 226 MP’s, new elections would have to be held. Thus, if Yatsenyuk is dismissed, the earliest the new elections could take place would be in December given the 60 day campaign period. A key question to resolve regarding any new elections is “what system to use?” Currently Ukraine elects half of Parliament by party lists and the other half by districts. When there was a consensus and unity within the governing coalition, the Parliament changed the local election law to introduce an “open list system”. Under this system, the influence of party bosses was slightly reduced because voters were able to select their favorite candidates within the party for particular posts. This contrasts with the “closed list system” currently in place under the Parliamentary election law whereby the party bosses decide the order of the candidates on the list and seats are allocated to parties receiving more than five percent of the vote on a proportional basis. Now with the open conflict between the President and Premier, it is doubtful that either wants to change the system to an “open list system” given their parties respectively declining popularity ratings. The status quo 50/50 system (half elected by lists and the other half by districts) is likely to remain intact. In fact, many politicians will prefer to run as independents in districts rather than wear the albatross of a political party label in the election. By running as independents, the winners can then select which faction they wish to join with the advantage of hindsight rather than having to cast their fate together with unpopular political leaders.
Based on the latest polling information (primarily polls by the International Republican Institute and the Democratic Initiatives Foundation conducted late last year) as well as conversations with party leaders, here is how the political forces are shaping up for the next Parliamentary election. In addition, it is assumed that the 13 districts in Crimea and Sevastopol as well as the 15 districts in the Donbass will not participate in the new Parliamentary elections. If those districts were to participate, they would almost certainly elect candidates from the Opposition Bloc.
Solidarity/Poroshenko: The President’s popularity was around 40% when his party received 22% of the vote in the October 2014 Parliamentary election. His popularity is now half of that and as a result, his party is currently polling around 10% of the vote. With Poroshenko’s rating on a rapid downward trajectory, new elections do not look particularly appetizing for the Solidarity party. However, if the current electoral system remains in effect, then Solidarity could dramatically improve their prospects by winning the majority of the 68 individual districts they won in 2014. With the addition of administrative resources, Solidarity could enhance their results on the proportional ballot to around 13% (same as the party of power in 2002 “For a United Ukraine”). These factors would likely give Solidarity fewer than 80 deputies in Parliament versus 150 after the 2014 election.People’s Front/Yatsenyuk: The Premier’s political party emerged from nowhere and finished first in the October 2014 Parliamentary election. No sooner had the party risen to the top, than it collapsed completely a year later. The party followed Yatsenyuk’s decline in ratings and both currently sit at less than two percent. There are political resurrections in Ukraine, and Yatsenyuk will eventually re-emerge on the political scene after his time as Premier is finished. However the People’s Front is no “Lazarus” and is finished as a political project. With the party unable to get five percent of the vote and only 18 MP’s elected from districts, faction members are searching for options. Most of the current MP’s will be forced to run as independents or join other political forces to get elected. At best, perhaps half of the People’s Front faction MP’s from districts would win re-election. That would represent a decline from 82 seats in 2014 to 9 – which is five less than the required amount to form a faction.
Samopomich: This reform minded party emerged on the scene with an impressive 11% in 2014 and 32 MP’s. Current polls put them around eight percent which is adequate to return to Parliament but represents a slight decline in support. This support may return in an election campaign but given the competition from the Saakashvili’s new reform project and the Tymoshenko-Nalyvaychenko union, it is more likely that Samopomich will have to fight to keep its’ support from falling. In effect, Samopomich is no longer the “new” reform option but part of an unpopular government. The party elected only one MP from a district in 2014. Therefore, if the election was held today, Samopomich would decline by more than a quarter from 32 MP’s to approximately 23.
Motherland/Tymoshenko with Nalyvaychenko: In 2009-2010, Valentin Nalyvaychenko was one of President Yushchenko’s most loyal and trusted supporters and de facto, a prime enemy of then Premier Yuliya Tymoshenko. However their recent trip to Washington together combined with their announcement of working together to fight corruption has brought these two former rivals into the same political camp. Tymoshenko has been impatiently waiting for an opportunity to return to the Premier’s post, and her alliance with Nalyvaychenko demonstrates she is still willing to make deals that help her attain her goal. Current polling puts Motherland at around eight percent but the addition of Nalyvaychenko will increase her support in the west and in Kyiv. Since both are now opponents of Poroshenko, they are untainted by the unpopularity of the current government. Together they can increase their support and even win some individual districts. Tymoshenko received 13% of the vote against Poroshenko in the May 2014 Presidential election and it possible that she can regain that segment of the population for snap elections. Therefore if the election was held today, Tymoshenko-Nalyvaychenko could expect to double her deputies in Parliament to more than 40 – up from 19 currently.
Saakashvili’s Reform/Anti-Corruption Movement: Saakashvili’s political movement is the hottest political ticket in Ukraine but still lacks the vehicle of an actual political party. Eventually though, a new party will be formed or an old party recycled to accommodate the movement. Already around 15 Poroshenko Bloc MP’s have formed an anti-corruption caucus and are likely to form the core of the new party. Even though these MP’s will be taken from the Poroshenko Bloc, the President will not be in a position to fight against it since he will need to find coalition partners, and Saakashvili’s movement is the most realistic and practical option. There is no polling data for this yet unnamed movement; however Saakashvili’s popularity is around 35-40%. If we extrapolate that approximately half of those persons would vote for his party (the same ratio as with Poroshenko’s popularity), that would give the movement almost 20% of the vote. While there are many uncertainties at this point, it is probable that the Saakashvili movement will not focus on individual districts due to the financial resources required, and the fact that those with financial resources are not always the kinds of persons Saakashvili will want to “publicly” attract to his party. Nonetheless, it is not unreasonable to forecast that the movement could win a dozen individual districts in addition to their first place proportional ballot performance. Thus, if the election was held today, the Saakashvili movement would have close to 70 MP’s.
Ukrop/Renaissance/Kolomoyskyi: The oligarch maintains the patriotic oriented Ukrop for voters in the west and the pragmatic Renaissance Party for voters in the east. At the moment, Ukrop is polling close to four percent but could likely pass the five percent barrier once campaign resources are expended. Renaissance on the other hand, doesn’t have the public support to win seats in Parliament on the party list ballot, but could certainly win seats in individual districts in the east and south. Thus assuming that Ukrop passes the five percent barrier and wins a handful of seats in western Ukraine that would give them 19 MP’s in the next Parliament. In addition, the 23 current MP’s in the Renaissance faction are likely to be re-elected (they won last time against the odds and in the next election, the odds are likely to be improved) and the party can win other districts particularly in Dnipropetrovsk, Kharkiv, and Odesa currently held by Poroshenko bloc MP’s, that would give Renaissance 34 seats in the next Parliament. All in all, Kolomoyskyi is looking at increasing his support in Parliament from 23 to 53.
Opposition Bloc: The party still has a label which sells in the east, but lacks the political patronage to consolidate support. In addition, there is a current dispute between its two financial sponsors, Rinat Akhmetov and Serhiy Livochkin over who should pay the bills. As a result, important party building work is not getting done and the Opposition Bloc is missing opportunities to capitalize on the mistakes of the government. Current polls put the Opposition Bloc at around seven percent, but with mobilization of their electorate in the east (assuming a resolution of who pays the bills), and the unpopularity of the current government, they could surpass their nine percent mark in 2014 and easily rise to 12 percent. In addition, the bloc has picked up 11 MP’s who were elected as independents in 2014 to bring their total to 43. These MP’s are likely to win re-election and the Opposition Bloc will be in a situation to dominate Donetsk, Luhansk, and Zaporizhya. Therefore if the election was held today, Opposition Bloc would have approximately 55 MP’s.
Radical Party: MP Lyashko was the first member of the governing coalition to withdraw from the government. As a result, his party will benefit somewhat with the voters for being in opposition to the current government. Currently the party is polling close to four percent. However when oligarch Dmytro Firtash unleashes his financial resources to help the party during the campaign, they are likely to pass the five percent barrier once again – although receive less than seven percent in 2014. Therefore if the election was held today, the Radical Party would have approximately a quarter fewer MP’s with 16 down from 21.Svoboda: In 2012 Svoboda stunned everyone by receiving ten percent of the vote nationwide. In times of disenchantment with the government, Svoboda performs well. In times of general support of the government, like October 2014, Svoboda tends to receive fewer votes (4.7% in 2014, just short of the five percent barrier). Currently Svoboda has six MP’s (not enough to form a faction so they are technically independents) and is polling around four percent. Given the unpopularity of the government and sense of betrayal of the ideas of Euromaidan, Svoboda could pass the five percent barrier for seats in Parliament as well as win a dozen districts in the west. Svoboda mayoral candidates won victories last October in the local elections in Ivano Frankivsk, Ternopil and Khmelnytskiy. It is possible that they will win individual districts in those oblasts as well as in Lviv (outside the city). Therefore if the election was held today, Svoboda would likely elect around 26 MP’s.
Finally, it is assumed that MP’s from the People’s Will faction which are elected from districts will be re-elected (mostly as independents but listed separately). Thus, the composition of Parliament if the election was held today would be:
Thus the new Parliament looks to be highly fractured and even less cohesive than the current one. To form a governing coalition, the President would need the votes of his faction, plus the three S’s of Saakashvili’s movement, Samopomich, and Svoboda, as well as almost every independent MP (35 of 37) just to reach 226 MP’s. The addition of Tymoshenko-Nalyvaychenko gives the coalition a majority of 232 without the independents, but it is highly unlikely that Tymoshenko would agree to join the government for anything less than the Premiership. If that were to happen, it becomes doubtful that Saakashvili would agree to the arrangement after having received the most votes in the election. In short, new Parliamentary elections are a bad idea for Ukraine at this time as it will result in unnecessary turmoil and instability.
Dates to Watch (for Ukraine unless otherwise noted):
June 23: New EU Expiration Date for Crimea related Sanctions on Russia
July 31: New Date for Expiration of the EU’s Donbass related Sanctions on Russia.
September: Stockholm Arbitration Hearings on Counter Claims between Naftogaz and Gazprom.
January 2017: Stockholm Arbitration Courts Expected to Render a Decision on the Case Between Naftogaz and Gazprom.