Details on Ukraine coalition government protocol, agreement emerge

Ukraine’s coalition government will consist of five pro-EU elected political parties that will form parliamentary factions, said on Nov. 11 Viktoria Siumar, an elected MP from the People’s Front party. Their representatives have already signed a protocol determining the procedure for forming the coalition government. The prime minister will nominate candidates for ministerial positions after consultations with coalition members, she said, and the ministers will select their deputies without quotas.

 

The participants of the coalition talks have released details of its protocol for forming the coalition government, reported the Ukrayinska Pravda news site on Nov. 11. It consists of three sections: general principles, rules for the coalition’s activity and short and mid-term reforms. Individual MPs must join a parliamentary faction in order to join the coalition, the protocol said. The coalition consists of an assembly and a council, which consists of three representatives from each faction. Each faction in the coalition has an equal voice. The coalition council approves decisions with a three-fourths majority.

 

Ukrainian President Petro Poroshenko wants independent politicians to serve as ministers, said on Nov. 11 Mykola Tomenko, an advisor to the president. The new Cabinet’s program will occupy 100 pages of text, he said. Arseniy Yatsenyuk will remain as prime minister, he confirmed.

 

The coalition agreement will be based on the 48-page text produced by the Poroshenko Bloc, with addenda and amendments submitted by the coalition’s other participants, reported on Nov. 12 the segodnya.ua website, citing anonymous sources. The agreement will consist of seven sections and 13 main areas of reform. Ukraine’s national security strategy and military doctrine will be rewritten, with an emphasis on NATO cooperation (but not necessarily membership), segodnya.ua reported. Ukraine’s Armed Forces will be divided into five divisions, including the creation of special operations, rapid reaction forces, and territorial defense reserves.

 

The agreement also calls for constitutional reforms that grant Ukraine’s regions fiscal autonomy, with local budgets financed by revenue and income taxes, segodnya.ua reported. The state oblast and district administration system – that serves as the Presidential Administration’s local representation – will be liquidated. A newly created State Fund for Regional Development will earmark funds for development projects to local governments. Local governments will be allowed to introduce real estate taxes.

 

The coalition agreement also calls for implementing a state health insurance system, segodnya ua said. It calls for a single 30 percent tax on natural resource extraction and boosting natural gas imports from the EU. Non-privatized coal mines will be shut down. State railway monopoly Ukrzaliznytsia will be privatized and other private railway transporters will be allowed onto the Ukrainian market. Responsibility for roads will be transferred to local bodies and private builders will be responsible for maintenance after constructing them. The national payroll tax will decline to a 23 percent minimum from 34.7% currently. Taxes to be eliminated include oil transit, tourism, parking and an ecology tax on fuel.

 

Zenon Zawada: It’s taking longer than expected to form the coalition government, drawing some criticism since urgent decisions need to be made in this time of war. Yet the delay is justified, in our view, given the unprecedented approach of forming the new coalition government, at least on a surface level. The leaked information so far indicates that despite the standard intrigues surrounding ministerial posts, a genuine effort is being made to make the next coalition government a successful political endeavor. So the participants deserve the benefit of the doubt.

 

The decision to extend invitations to the coalition to Oleh Liashko’s Radical Party and the Fatherland party led by former Prime Minister Yulia Tymoshenko is based on the plan to create a coalition council with equal representation for all factions. If the Poroshenko Bloc can’t reach compromise with the rival People’s Front party, it will rely on these two smaller factions to provide the necessary support. We also see the invitation as an attempt to make sure all five pro-EU factions are tainted with failure should the coalition fall apart, which is quite possible. That way, no pro-EU force has an upperhand in its public image when it comes time to form a new coalition.

 

The unconfirmed reported details of the coalition agreement seem legitimate as to their credibility. The proposals are ambitious but realistic. The agreement will be a success if even half the reforms mentioned by the segodnya.ua report are achieved because they will mark the first structural reforms in post-Soviet Ukraine’s history. Our logic is that “something” is better than “nothing” and more realistic than “everything.”

 

Yet it remains to be seen whether “something,” as opposed to “wholesale, across-the-board” reforms, is enough to stop the bleeding of the hemorrhaging Ukrainian economy. In essence, the more such reforms as cutting and simplifying taxes are pursued (as well as the introduction of “positive” taxes on real estate and alcohol), the better the chances for the Ukrainian economy’s survival.