President Yanukovych calls for constitutional reform

Ukrainian President Viktor Yanukovych called for strengthening presidential powers via constitutional reform in a speech marking the 19th anniversary of Ukraine’s independence yesterday. Yanukovych claimed the shift was necessary to push through tough economic reform and avoid the political deadlock of previous years. Brad Wells: Yesterday’s announcement by Yanukovych of plans to change the constitution is his next logical step in consolidating power, which he has moved quickly to do since his inauguration in February. He established a friendly majority in parliament (which received a dubious blessing from the Constitutional Court) and Cabinet of Ministers anchored by members of his political party, the Party of Regions. Yanukovych has shown he can push through his agenda (controversial Cabinet appointments, the Black Sea fleet-gas discount deal with Russia, as well as IMF-demanded initiatives such as unpopular gas price hikes for consumers, etc) with little or no debate in parliament. At this point, we believe the political situation to already be well under Yanukovych’s control, an assessment backed by recent sovereign credit rating upgrades rationalized by improved political cohesion and the government’s ability to enact necessary legislation. Looking ahead on the political calendar is local elections, scheduled for October 31, which also shaping up to be an opportunity for Regions to strengthen its hold, thanks to a law passed by the Regions-backed majority in parliament that limits the participation of newly established political parties.