• Airliner Attack Aftermath: The downing of Malaysian Airlines Flight #17 over Donetsk dramatically changes the geopolitical dynamic between the world and Russia. Prior to that, Russia was able to play nice for the Europeans while abusing the Ukrainians in private. No mas…An official investigation will proceed and evidence will be eventually submitted to a court of law. However this battle was decisively won by the Ukrainians as it was settled last night in the court of public opinion. The rapid response by the Ukrainians and release of phone conversations by Ukrainian SBU Chief Valentin Nalyvychenko revealed the clear link between the terrorists who shot down the plane and their Russian handlers. What’s the likely fallout? 1) The Europeans can no longer dillydally on matching the US sanctions imposed yesterday. Since the US sanctions were not quite “3rd tier, sectoral sanctions” (let’s call them sanctions tier 2.5), this will make it easier to overcome Italian and other “Old Europe” objections as they no longer have the fig leaf of domestic political considerations to hide behind. 2) The US can now take the sanctions to full “tier 3” level which will punish the Russian energy and financial sectors while being strongly backed with public support. The US Chamber of Commerce and National Manufacturer’s Association’s brief flirtations with opposing further sanctions under the premise of protecting jobs will be abandoned faster than a bad idea. 3) Congress is now likely to resume attempts to provide lethal military assistance to Ukraine. A bipartisan consensus already exists on the issue but has lacked the catalyst to begin a real debate. Ukraine’s Speaker Oleksandr Turchynov has punched the gas pedal on receiving lethal military assistance from the US by insinuating that had it been provided months ago when requested, the airliner might not have been shot down by the terrorists. DC policy makers in Congress, State, NSC, CIA, etc. admit privately that Obama’s opposition is the primary obstacle. 4) Conversely, this will put additional pressure on France to postpone, alter or cancel their sale of the Mistral warship to the Russians. After this colossal blunder by the terrorists, Europe will be less eager to put high tech war machinery in the hands of the Russians who have proven far too generous in sharing such weapons with mercenaries and state sponsored terrorists. 5) Finally Putin must soon make a decision to either double down and commit to a full invasion of Ukraine, or fold his cards and cut the terrorists off. World Cup charm offensives and schmoozing old German women is no longer an acceptable substitute to substantive action. Putin’s plans to transform the Donbass region into a much larger Transnistria appear thwarted for now. Thus, Putin’s options are narrowing to essentially two moves: to take noticeable action to stop the financing, aiding and abetting of terrorists in Ukraine or end the illusion and roll the Russian tanks in eastern Ukraine. The terrorists, fearful of being abandoned by President Putin, increased their assaults on Ukrainian forces after the downing of the Malaysian Airlines flight in hopes of restoring Kremlin confidence in their effort.
• Parliamentary Session Next Week: The Ukrainian Parliament has scheduled a regular session next week (July 22-25). Usually by this time of year, parliamentarians are vacationing in exclusive European resorts but the war forced them to resume work next week (even before the downing of the airliner Thursday). While support for the Anti-Terrorism Operation, economic measures, energy issues and Constitutional reform will be discussed, the key issue to watch is the scheduling of the parliamentary elections. Almost everyone agrees that they should be conducted earlier than 2017 but the question is “when” and under what system? Poroshenko has called for an “open list” system to elect parliament by party lists but allowing input from the voters into the ordering of names on the lists (i.e. a typical European electoral system). The Central Election Commission largely favors a closed list system that was used in 2006 and 2007 due to the annexation of Crimea and strong likelihood that not all areas of the Donbass will be able to hold elections. Thus by electing nationwide by a party list, the absence of some districts or oblasts doesn’t leave vacancies in parliament. The drawback is that party leaders are strongly empowered and can single handedly decide the positioning of individuals on the list. Finally, almost all members elected from districts as well as the Party of Regions faction favor the status quo. That is, the current 50/50 system with half of the members elected by party lists and the other half by districts. In addition to the independence that members from districts have, versus those elected from party lists, talk of an autumn election would not give new parties a chance to appeal to the public and build real support. Thus, those deputies are holding out for the current system to stay in place so they may run for re-election from the district where they won before. Poroshenko is trying to lure deputies from the districts with an offer to drop the barrier from five to three percent – thereby making it easier for new parties to win seats. However since nearly ¾ of the deputies in the Economic Development and Sovereign Ukraine factions (which are a key part of the current parliamentary majority) are elected from districts, Poroshenko’s offer is not being well received. Despite talk of the current coalition factions disbanding the majority and thereby forcing a new election in October (if there is no majority in parliament for 30 days then the President can call a new election), it likely cannot be accomplished without the support of the deputies elected from the districts. Thus, if election dates and systems are not agreed upon next week, then look for the election to be pushed back (possibly as late as next March) and potentially combined with the local elections (currently planned for next October).
• Fall of the Regions Empire: “…smite the shepherd and the sheep of the flock shall be scattered…” (Matthew 26:31 KJV). The fall of Yanukovych has scattered the base of the Party of Regions. The party’s rise and dominance of the pro-Russian electorate of Ukraine from 2004-2013 is now over and other competitors are vying for position. Just five months ago the Party of Regions faction had 207 members (just shy of an outright majority of 226) but now has fizzled to 78 members following their presidential candidate’s dismal 3% performance in the May Presidential Election. Currently the faction is jumble of Akhmetov loyalists, Yanukovych’s friends, Russian chauvinists, and eastern Ukrainian business interests. While the party is likely to win seats in the next parliament, it will likely be only 1/3 or less of their traditional base vote (see graph below).
In addition, with the growing likelihood that the courts will ban the Communist Party (which has decreased to 23 MP’s from 32 in February) for supporting separatism and thereby eliminate them from competition in the next election, the base support of the pro-Russian electorate (which post Crimea annexation is around 46%. See “Russia’s Annexation of Crimea and How it Solidifies Ukraine’s European Path”), is up for grabs in the next parliamentary election. From the rubble of the Party of Regions, two main groups have emerged so far: The Peace and Stability Faction in Parliament and the Party of Development of Ukraine. The Peace and Stability faction in Parliament (with 34 MP’s) is holding place for a new pro-Russian (or perhaps Russian-lite) party that is expected to emerge once the dust settles from Ukraine’s Anti-Terrorism Operation in the east. The faction is led by MP’s Vitaliy Grushevskiy, Yevhen Balytskiy (both elected with the Party of Regions from districts) and Oleksandr Pryszhnyuk (elected as a Communist on the party list). The Party of Development of Ukraine (PDU) is believed to be largely financed by former Yanukovych Chief of Staff Sergiy Livochkin and features Sergiy Larin (former MP, Governor and Deputy Presidential Chief of Staff), MP Yuri Myroshnychenko (former Yanukovych Representative in Parliament) and former Yushchenko Minister of Youth, Family and Sports Yuri Pavlenko among its’ most public faces. Legendary American political consultant Paul Manafort (who transformed Yanukovych from pariah in 2005 – to Prime Minister a year later and eventually President in 2010) is also believed to be advising the party. Once the election process is clear, the party is expected to form a faction in Parliament with around 20-25 MP’s. Finally, there is speculation about a resuscitated Liberal Party of Ukraine (LPU) following the election of a new chairman, MP Mykhailo Opanashenko (elected with the Party of Regions from Kherson) last month. The Liberal Party of Ukraine was influential in the mid 1990’s when led by MP Yevhen Scherban until he was gunned down on the Donetsk airport tarmac in November 1996. Later the party briefly joined Yushchenko’s “Our Ukraine” in 2002 before largely disappearing into irrelevance over the last decade. With the election system and date not even decided yet, it is too early to predict what will happen with these competing political parties. However with the pro-Russian electorate up for grabs and the Party of Regions in decline, expect new parties and faces in the next Ukrainian Parliament