Ukraine's Yushchenko Agrees Cabinet With Opposition

KIEV, Ukraine -- Ukrainian President Viktor Yushchenko will form a government with Regions of Ukraine party leader Viktor Yanukovych, the man he ousted almost two years ago during the Orange Revolution.

President Viktor Yushchenko(2nd L) speaks during a Round Table with main parliament parties in Kiev. Yushchenko said he had approved the candidacy of his arch-rival Viktor Yanukovich for prime minister, ending a four-month political stand-off

Yushchenko agreed to nominate Yanukovych for the post of prime minister. The parliament will vote on the candidacy later today, with a new cabinet to be formed within 24-hours, said Regions of Ukraine party official Evhen Kushnaryov, in remarks broadcast by TV Channel 5.

``I am sure that my decision is absolutely necessary for the nation's development,'' Yushchenko told a press conference in Kiev. ``I have made a step toward parliament and I am convinced that it will use it in a proper way to bring prosperity to the country.

Yushchenko's Our Ukraine party will team up with Yanukovych's party and the Socialists. Talks aimed at forming a government have dragged on since March 26 elections produced no clear winner.

Our Ukraine party, which finished a distant third in March 26 parliamentary elections, failed to reconstitute the coalition that emerged from the Orange Revolution and turned to Yanukovych to try to keep some posts in the new cabinet and preserve his foreign policy goals, including membership in the World Trade Organization.

The Regions of Ukraine party, which favors the introduction of Russian as the second official language, closer ties with Russia and opposes membership in the North Atlantic Treaty Organization, agreed to form a coalition with the communists and socialists on July 11 after the standoff left the country without a government.

Presidential Election

The coalition, which nominated Yanukovych for the post of prime minister, had to form a government by July 25.

Yushchchenko, 52, beat Yanukovych, 56, in a re-run of the disputed presidential election that sparked the so-called Orange revolution of November 2004 on promises to raise standards of living and bring the country to closer to the membership in the European Union, NATO, and the world trade organization.

Yushchenko said on July 8 that he won't allow Yanukovych to become premier unless he agrees with the president's domestic and foreign policies.

``Now, we have the unique chance to fulfill all my promises I gave during the presidential elections,'' Yushchenko said.

``Ukrainian democracy is relatively young and the situation complicated,'' said Polish President Lech Kaczynski at a press conference in Warsaw yesterday after a meeting with Georgian President Mikheil Saakashvili. ``But in our opinion, Ukraine's pro-western course won't alter.''


Ukraine's $124 million economy expanded 5 percent in the first half of the year, compared with 4.1 percent in the same period a year ago.

``The market has held in quite well, actually rallied on the back of the broader market rally, and I think on the assumption that a government including regions would emerge and this would help normalize the relations with Russia,'' said Bear Stearns Managing Director Tim Ash in an e-mailed note yesterday.

The ``market is unlikely to be impressed if we end up with Yushchenko trying to dissolve parliament. The parliamentary majority could seek to resist, and we could end up with an ugly stand-off, and threats of impeachment against the president,'' Ash said.

Source: Bloomberg