New Parliamentary Coalition for Ukraine

Surprise, Surprise! A new coalition agreement has been signed between:

• President Viktor Yushchenko’s Our Ukraine People’s Self Defense Bloc
• Prime Minister Yulia Tymoshenko’s Bloc
• New parliamentary speaker Volodymyr Lytvyn’s Bloc

The new coalition claims to have 248 seats in the 450-member Verkhovna Rada, thus breaking the country’s 3-month parliamentary deadlock. However, there are reports that approximately 30 of Yushchenko’s deputies oppose the alliance, including top lieutenant Vyacheslav Kirilenko, who resigned as faction chief. A ruling coalition can only exist when it has at least a majority 226 votes.

Even if the new coalition has a parliamentary majority, don’t expect much to change. All the players remain the same, except for the inclusion of Lytvyn. At least this should be the end of discussions for the new parliamentary election Yushchenko called for, but canceled due to lack of funding.

Probably the only reason this happened is that Ukraine has been hit extremely hard by the world financial crisis. Yushchenko believes the country’s economy could contract by 7-10% in the first quarter of 2009. That would come on top of this year’s loss of revenue from declining steel prices (exports) and falling GDP (14.4% in November as compared to November 2007). Ukraine is also in another battle with Russia over gas prices.