Squabbles Hinder Ukraine's Attempts To Form Coalition

KIEV, Ukraine -- The world may be congratulating Ukraine on its first "free and fair" elections, but not all of its newly elected legislators are happy. Many are considering asking the president to dissolve the new parliament and try again.

Yushchenko (L), Tymoshenko (C) and Yanukovich (R)

The vote two weeks ago, in which a divided pro-western "Orange" camp won a narrow victory over "Blue" pro-Russian forces, has led to a stand-off in coalition talks that some say could be a stalemate.

The outcome depends mainly on whether the two "Orange" leaders - Viktor Yushchenko, the president, and Yulia Tymoshenko, who was his prime minister until they fell out and he sacked her - can be reconciled.

The trouble for Mr Yushchenko is that Ms Tymoshenko's bloc won the biggest share of the "Orange" vote, which she says gives her a mandate to return as prime minister. If Mr Yushchen-ko's bloc disagrees, there will not be any coalition, she says.

Mr Yushchenko argues that the "Orange" camp should commit to a coalition but put off the decision about a prime minister.

He wants signed promises from the Tymoshenko bloc and the third prospective partner, the Socialists, that the coalition would carry out a programme in line with the president's vision - including quick entry to the World Trade Organisation, a free-trade agreement with the European Union, and no revision of past privatisations, one of the issues Mr Yushchenko and Ms Tymo-shenko quarrelled over.

But, privately, Our Ukraine insiders say the real obstacle to a coalition is the animosity that exists between Ms Tymoshenko and leading Our Ukraine members, including several whom she has accused of corruption. At a closed-doors meeting this week where Our Ukraine leaders voted on a draft coalition agreement, many opposed giving her the premiership.

A group around Petro Poroshenko, a businessman and Ms Tymoshenko's leading opponent within Our Ukraine, proposed a draft that would have invited pro-Russian "Blue" parties to join the coalition talks, which was voted down by a three-to-two majority.

Viktor Yanukovich, leader of the pro-Russian Regions party, which came first in the elections with 32 per cent of the vote, is calling for a "universal" coalition embracing all five parliamentary parties.

Most Our Ukraine members say their bloc would prefer new elections to an "Orange-Blue" coalition. But they say the stand-off is likely to continue until June or even July. Parliament is expected to open session in the second week of May. If it fails to appoint a cabinet within 60 days, the president can call new elections.

Mykola Katerynchuk, an Our Ukraine leader, says Ms Tymoshenko will be able to get herself nominated as prime minister, but she may not win confirmation as only 18 supporters would have to defect to undermine her bid.

The uncertainty is testing investors' nerves. The central bank released data this week showing it spent $1.8bn (€1.5bn, £1bn) of reserves defending the currency during the three months before the elections. Analysts say a coalition failure could precipitate a currency crisis.

But Mr Katerynchuk says the threat of new elections will force a compromise. "There's a lot of 'he doesn't like her' and 'she doesn't like him' and 'he doesn't like him' around. We need to put all that behind us."

Source: Financial Times