Timoshenko Faces Decision As Ukraine Nears Election Declaration

KIEV, Ukraine -- Ukranian Prime Minister Yulia Timoshenko faces pivotal decisions about her political future this weekend as election authorities prepare to declare Viktor Yanukovych the country’s new president.

Ukraine's Prime Minister Yulia Tymoshenko arrives for the cabinet meeting in Kiev, Ukraine, Thursday Feb. 11, 2010. Ukraine's embattled Prime Minister Yulia Tymoshenko appeared in public for the first time in days Thursday but still ignored calls to concede defeat in the presidential election and resign her post.

The Central Electoral Commission is set to announce the final result of the Feb. 7 presidential election on Feb. 15. That will trigger the inauguration process and set a five-day deadline for any legal challenges to the vote, in which Yanukovych, 59, beat Timoshenko.

In addition to deciding whether to challenge the election results, Timoshenko must weigh whether to persist in refusing Yanukovych’s demand that she and her government step down so he can assemble a new Cabinet with majority support in the parliament.

She may be taking the wrong approach, according to members of her own party and analysts including James Sherr, head of the Russia and Eurasia program at Chatham House, a London-based foreign affairs research organization.

“It would be better for her interest and the interest of her constituency if she goes soon and goes into opposition,” Sherr said in an interview yesterday. “It would be better for Ukraine because what Ukraine desperately needs is a government with a capacity to govern, which is not checked and blocked at every single turn.”

A legislative impasse may worsen the former Soviet republic’s economic plight and delay the resumption of a $16.4 billion emergency loan from the International Monetary Fund, adding to pressure on the hryvnia and government bonds.

New Budget Needed

The country needs to adopt the 2010 state budget to resume cooperation with the IMF to stay afloat and pay for natural gas imports.

Although Timoshenko’s government said yesterday it wouldn’t resign voluntarily, some of the voices calling for her to concede defeat in the presidential contest and lead her lawmakers into opposition within the parliament can be found within her own bloc.

“The task of Yulia Timoshenko’s party after the election result announcement is to become a Ukrainian European opposition,” said Mykola Tomenko, deputy head of her parliamentary group, yesterday, according to his Web site.

Yanukovych is on the verge of receiving an official declaration of his victory even though the electoral commission said on Feb. 10 it sees grounds for recounting votes in several constituencies, Ukrayinska Pravda reported yesterday.

Timoshenko submitted 60 appeals for recounts in different constituencies, Borys Kolesnikov, an ally of Yanukoych, told reporters in Kiev yesterday. So far, 24 appeals were rejected.

Challenge Will be ‘Difficult’

Timoshenko and her supporters “do not have enough evidence to prove falsification,” said Oleksandr Chernenko, head of Ukraine’s Committee of Voters, a Kiev-based private organization that focuses on protection of voters’ rights. “It would be very difficult for her to challenge the result.”

The prime minister’s room to challenge the election results is also limited because the U.S. and the Organization for Security and Cooperation in Europe have called the vote democratic.

President Barack Obama called Yanukovych yesterday to congratulate him on his election, the White House said in a statement. “This peaceful expression of the political will of Ukrainian voters is another positive step in strengthening democracy in Ukraine,” the White House said.

European Commission President Jose Manuel Barroso yesterday also sent a message of congratulations to Yanukovych and welcomed the “the fact that the elections were conducted in accordance with international standards.”

‘Momentum is Toward Stability’

Obama’s call, coming on top of the OSCE statement, “definitely show that international momentum is toward stability in Ukraine,” said Kaan Nazli, a director at New York-based Medley Global Advisors LLC. “It will be more difficult for Timoshenko to challenge the elections’ results,” Nazli said.

Timoshenko must bow to the inevitable because “she damaged her reputation as a democratic leader very much,” said Ivan Tchakarov, an economist at Nomura in London yesterday. “If she resigns, it will be very beneficial for her. She will get applause from abroad.”

Yanukovych, whose first presidential election victory in 2004 was overturned by the courts, won 48.95 percent of the vote while Timoshenko got 45.47 percent based on a tally of electronic voting, the election commission says.

While Timoshenko’s forces have a majority in parliament and could block the passage of this year’s budget and other IMF-imposed laws, “if she concedes, Ukraine will have a government much sooner,” Tchakarov at Nomura said.

Investors are watching the political stalemate closely. Ukraine’s government debt is the third-most expensive to insure in the world after Venezuela and Argentina, based on credit default swap prices. The hryvnia has lost 42 percent against the dollar since the beginning of September 2008.

Source: Business Week