Tyshchenko, Yulia

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Policy Documentation Center

National bank leadership as a test to parliamentary majority : hopeless.ua?
RESEARCH UPDATE
No. 45/293, December 16, 2002
Yulia Tyshchenko, Head of Civil Society Programs
The day of December 12 was not the day of consolidation of the parliament. The first issue on that day was the
dismissal of National bank governor Volodymyr Stelmakh. The second issue was the appointment of leader of
Trudova Ukraina, Serhiy Tihipko, to the vacated office. Neither of the issues was decided on, as the opposition
blocked the parliamentary podium.
The position of the NBU governor was a part of the “coalition government package” to be divided between
representatives of the parliamentary majority. From the very beginning the position was claimed by the Trudova
Ukraina and their allies from the Party of Industrialists and Entrepreneurs. In November 2002, then Prime Minister
Anatoly Kinakh sent an official petition to the President, asking him to propose to the parliament to agree to the
dismissal of Volodymyr Stelmakh from the position of the NBU governor. On November 25 the President submitted
two proposals to the parliament: on the dismissal of Stelmakh and the appointment of Tihipko. The inclusion of the
position of the NBU governor to the “coalition government package” caused strong criticism by Nasha Ukraina and
personally Viktor Yushchenko, a former NBU governor himself, as in their view the NBU needed to be beyond
politics and politicizing it could have a negative effect on stability of the Ukrainian national currency. However, it
appeared that the appointment of Tihipko was seen as undisputable by Trudova Ukraina and its allies.
“With deed, not word”
On November 28 the majority could not receive the desired result of the voting on the NBU matter. Only 214 MPs
instead of 233 that were formally members of the majority voted in favor of dismissing Stelmakh. The failure, bitter
as it was, called for an urgent face-saving action, as the majority was seen as poor in terms of securing coordination
within its ranks. The voting on the NBU matter was not the only failure that day: the majority failed to collect
enough votes (at least 226) to approve six other planned decisions.
The relatively fast and painless formation of the “coalition government” did not add to consolidation of forces
within the parliament. The appointments to the government positions took place in accordance with standard
Ukrainian political tradition of non-transparency and backdoor dealings and, obviously, did not require a broad
discussion in the assembly. The very declared nature of the “coalition” continues to cause more questions than it
gives answers. Traces of consolidation could be observed on December 7, when the parliamentary majority and the
“coalition government” of Viktor Yanukovych signed a political document: a cooperation and solidarity in
responsibility agreement. The most critical issue in the context of present relations between the government and the
parliament is the issue of solidarity in responsibility for successful conclusion of the 2003 budget process. The
agreement could be seen as a kind of “insurance” for the government in case the parliamentary crisis continues, and
a good chance to disperse responsibility for the fulfillment of the national budget in 2003.
The document was signed in the presence of the President of Ukraine whose participation could be interpreted as
that of a conductor of film director whose decisions, to a large extent, determine success or failure of a performance.
However, there are some opposite currents in the situation: if the agreement works and cooperation and shared
responsibility do not remain empty declarations (which is a high risk now) – the influence of the “film director” on
the political process can be substantially decreased. However, the head of the state will retain the field for active
interpretations, beneficial assessments and placing emphasis. While seeming out of the process (or above it), the
head of the state may play a critical role in it. “Once [they] have taken responsibility – it is necessary that it is
reflected in actions,” he said on December 12, commenting on the earlier events – “let’s see how the events
develop.” Yet, the role of the one who “watches from above the fight” may be transformed into the role of a shadow
mediator if the process becomes tough. The presidential administration has a substantial experience of building such
combinations.
Another paradox of the agreement between the government and the parliamentary majority is the fact that the
initiative is too similar to recent ideas expressed by Viktor Yushchenko about signing a political agreement between
the government and the parliament. However, the current agreement practically removes Nasha Ukraina, still the
most numerous parliamentary faction, out of the cooperation process and, therefore, denies it an ability to influence
decision-making.
A certain public link between the government and Nasha Ukraina is the budget committee led by Petro Poroshenko.
While that link can be easily broken by potential re-distribution of parliamentary committees, Poroshenko has
repeatedly stressed that he would not give up him membership in Nasha Ukraina even in exchange of his leadership
of the committee.
The document, signed on December 7, is primarily of political nature, for no legal framework for cooperation
between the majority and the government exists. Hence, logically, there may be questions to what extent and what
kind of consequences actions (or inaction) of the government may have for the parliamentary majority. For instance,
if the government resigns, what happens to the format of the majority that has formed it, given the mutual
responsibility clause? How the majority could recall its delegates in the government if it is not satisfied with their
performance? What will the government do if the majority, regardless the agreement, will not vote on draft laws
proposed by the government? The examples are not rare. On December 12 the parliament did not even discuss the
government’s and the president’s proposals for amending the law on taxation of enterprises, nor proposed
amendments to the VAT law submitted by the parliament’s budget committee, nor amendments to customs tariffs
and the Customs Code that were supposed to contribute to fulfilling the budget in 2003. Prime Minister of Ukraine
Viktor Yanukovych announced that the foundations for understanding between the supreme bodies of the executive
and the legislative branches were legally bound in Ukraine for the first time, and that the process had been pushed
by the announced course towards a political reform. The first step towards the reform, according to Yanukovych,
was the creation of a permanent majority in the parliament, and its logical continuation was the formation of a
coalition government. However, the question of a “functioning majority” currently remains open, and so does the
issue of effectiveness of its work. In order to implement political agreements within the parliament and in relations
with the government, the majority would have to stick to the election motto of Nasha Ukraina: “With deed, not
word”. Yet, on November 28 it became obvious that no “word” (i.e., clear agreement) had been reached. The voting
on December 12 only confirmed that.
“Those on top” want it but cannot do it?
It is not unlikely that the situation around the majority may lead to the creation of a certain “inner opposition” within
it. That “inner opposition” may attract both those of the majority who does not full agree with the leaders and those
who prefer to be cautious at both sides of political barricades. Not so long ago Ivan Pliushch announced that twenty
MPs had agreed to join a faction he intended to create. Among those MPs are some well-known names like Oleg
Bezpalov, Volodymyr Sivkovych, Viktor Musiyaka, Igor Nasalyk, Petro Dymynsky. The announcement was made
in the context of critical remarks addressed to the majority in connection with its efforts to dismiss Stelmakh.
Prospects for creation of a new faction may affect the format of the majority and reduce its votes.
The current political crisis in the parliament showed that “those on top” sometimes cannot do even what they strive
to do. The “NBU governor crisis” proved that the majority failed the test.
Re-distribution of parliamentary committees: confrontation continues
The current confrontation in the parliament has been caused by a number of various factors. Some of the factors are
admitted both by the majority and the opposition, though the emphases are different. For instance, Yulia
Tymoshenko argues that the dismissal of Stelmakh and the appointment of Tihipko has been caused by speculations
about possibilities to carry put some dubious financial deals that could do substantial damage to the national
economy. Representatives of the majority (e.g., Oleksandr Zadorozhnyi) argue that Viktor Yushchenko, as
predecessor of Stelmakh in the NBU, is interested in having “his man” in the NBU in order to keep quiet about some
specific details of Yushchenko’s actions of those days.
The most plausible reason, though, is the lack of a dialogue between the majority and the opposition. On December
12 the opposition was determined to disrupt the work of the parliament because one of the issues on the agenda that
day was re-distribution of the leadership of parliamentary committees. Today the parliament has 24 committees and
one commission. 19 committees and the commission are chaired by representatives of the opposition and Nasha
Ukraina. According to Stepan Hawrysh, leader of Demokratychni Initsiatyvy, president Kuchma supported the idea
of re-distribution of the committees. The idea was seen as a step of a new “velvet revolution” in the parliament in
the context of agreements with the government. Its unadvertised purpose was to satisfy ambitions of those members
of the majority who did not get what they wanted in the process of forming a “coalition government”. Naturally, the
opposition and Nasha Ukraina objected to the idea. “We are developing adequate reaction,” said Yuri Lutsenko, one
of leaders of the Socialists, - “the adoption by the parliamentary majority of decisions to re-distribute the committees
will be an overt act of aggression, a declaration of war,” he added.
Meanwhile, according to the opposition leaders, on December 9 the Socialists, the Communists and Yulia
Tymoshenko’s block agreed on joint actions, and on December 10, the three factions started negotiations with the
leader of Nasha Ukraina on a common position in voting on change of the NBU governor, re-distribution of the
committees and further actions in the assembly. However, the agreement seems to be too informal, and it leaves too
many questions unanswered. Earlier this week Nasha Ukraina’s political coordinator Roman Bezsmertnyi made a
statement that the block might lead the second stage of “Rise, Ukraine!” action if it would take the lead and not
follow Tymoshenko or someone else. It was also announced that discussions about a possible alliance of Nasha
Ukraina, the Socialists and Yulia Tymoshenko’s block to back a single candidate for the forthcoming presidential
elections, provided the candidate would be Viktor Yushchenko. However, a single candidate would be impossible if
Communists and their leader Petro Symonenko join the alliance. Tymoshenko made statements that could be
interpreted as objections to signing a political agreement with Nasha Ukraina without Communists, arguing that it is
important that the opposition acted in a coordinated manner. As the process evolved, Nasha Ukraina lost a few
members. Two of MPs that left the faction joined Rehiony Ukrainy – a fact that suggested that although Nasha
Ukraina and Rehiony Ukrainy might be preparing to negotiate a deal, their relations are far from clear and stable.
The issue of the committees is rather sensitive for the opposition, for if those are lost, the three opposition factions
and Nasha Ukraina will be left without any credible influence in the parliament. However, if the idea of re-
distribution of the committees is put off till later or removed from the agenda at all, that can be seen as a likely
ground for negotiations between the two camps in the parliament. Indirect evidence of the building of some
“grounds” outside the committees comes from recent statements made by Yulia Tymoshenko who argued that the
opposition was prepared for a compromise with the majority in order to keep Volodymyr Stelmakh as the NBU
governor. For that the opposition was “trying to initiate a process of negotiations with the majority … we are
prepared for cooperation in the field of settling the performance of the Verkhovna Rada, for the majority does not
need its destabilization,” Tymoshenko said. The movement towards negotiations may be suggested by the departure
of Oleksandr Karpov from the position of the coordinator of the majority – it is believed that the departure was
caused by his failure to start negotiations with representatives of the four opposition forces. Yet, the idea of
negotiations is seen skeptically by many commentators.
The current developments in the parliament represent a logical follow-up to long-lasting processes of “restructuring”
in the parliament, imitation of those processes. Similarly, the “coalition government” is most likely just an imitation
of a coalition without any legal grounds, a kind of political mimicry of the executive branch in the environment of
rhetoric about the beginning of a political reform. The most important thing in this case is not a political result but
the process itself or imitation of the process.
Back to the issue of the NBU governor, we’ll take the risk to assume that it will take place sooner or later, given the
backdoor agreements that will need to be met. The parliamentary “minority”, however, will do its best to use the
miscalculations of the “majority” and the presidential administration to keep the leadership of the parliamentary
committees and take part in the budget process in order to secure the ground for future negotiations. Therefore,
solution of personnel and organizational issues will be postponed. Who in the long queue is going to gain and what
the gains are going to be (if any) remains to be seen from the re-distribution of leadership of parliamentary
committees, a new round of rivalry for the position of the NBU governor and the wrap-up of the budget process.


National bank leadership as a test to parliamentary majority : hopeless.ua?

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