(President's press office) Viktor Yushchenko, the president of Ukraine, plans fresh constitutional changes as part of his bid to reassert authority over a turbulent political system and overcome a rebellion by parliament, which this week voted to sack his cabinet.
In a Financial Times interview, Mr Yushchenko said he wanted to revise again Ukraine’s constitution, which was changed on January 1 to reduce his powers in favour of the parliamentary majority.
He proposes that fresh constitutional changes should be decided through a national referendum after parliamentary elections in March.
Taking a defiant tone that contrasted with his usually mild demeanour in interviews, Mr Yushchenko insisted he had not been the least bit weakened by the vote on Tuesday. His government would disregard the move because it had not followed constitutional procedure: before sacking the government at least a third of parliament had to sign a petition calling for the vote, but that was not done, he said. “So one can say parliament committed a serious violation of the constitution,” he said.
He claimed the episode would actually help his party, Our Ukraine, gain support, because supporters of the 2004 Orange Revolution that brought him to power would turn away from Yulia Tymoshenko, his former prime minister who joined pro-Russian opposition parties in Tuesday’s vote.
He said there was “no force doing more against” the values of the Orange Revolution than Ms Tymoshenko, who had “betrayed national interests”.
Defending his own record, Mr Yushchenko predicted his party would take the lead role in forming the next government after defeating the main pro-Russian party, Regions, led by his rival in the 2004 presidential election, Viktor Yanukovich.
The issue of the constitution would then be revisited through a democratic process, unlike this week’s vote, which he described as “unconstitutional and illegal”. “That the constitution will have to be defended is an obvious fact, with the help of the people, with the help of a referendum, with the mobilisation of all democratic forces,” Mr Yushchenko said.
He said that the Orange Revolution had promoted freedom of speech and honest political competition. “No one is persecuting anybody, not the state security service, not the police, not the president, not the prime minister.”
He added that Ukraine’s economy had come through the Orange Revolution in reasonable shape with gross domestic product growing at 3 per cent last year and wages increasing 35 per cent. Foreign investment had increased to $7bn, compared with a total of $9bn over the previous 14 years.
On the constitutional front, however, Mr Yushchenko appears to be setting himself up for a tough struggle against his political opponents, who argue he is trying to back out of a fair compromise that prevented a stand-off between supporters and opponents of the Orange Revolution from turning violent.
The switch to a more parliamentary system was adopted in December 2004 together with anti-vote-rigging laws that helped Mr Yushchenko win the presidency. The change in the political system, however, was also described by Mr Yushchenko as “an anti-constitutional action ... hidden from the people”.
Whether the president will succeed in changing the constitution and winning back any of the powers he lost on January 1 will depend largely on his party’s performance in the March vote,.
Two polls released on Friday after the interview on Thursday suggested this hangs in the balance. Democratic Initiatives, a respected polling group, had Mr Yanukovich’s Regions party leading with 31 per cent support and close to a majority together with other pro-Russian parties, while Yulia Tymoshenko’s bloc had 16 per cent and Mr Yushchenko’s Our Ukraine 13 per cent.
Another poll showed Regions with 23 per cent and Our Ukraine and Ms Tymoshenko’s bloc with just over 15 per cent each.
Ukraine’s president Viktor Yushchenko spoke to Tom Warner in Kiev about the recent attempt by parliament to dismiss the government and about Ukraine’s gas price dispute with Russia. The following is a transcript of the interview.
(FT) How did parliament’s vote on Tuesday to sack your government change your ability to control domestic politics and conduct foreign policy?
(Yushchenko) First of all, the vote was unconstitutional and illegal. According to the current constitution, the cabinet can be dismissed if the prime minister or the whole cabinet ask to resign, or through a vote of no-confidence in the prime minister.
Such a no-confidence vote can be held at the president’s initiative after a proposal to parliament or on the initiative of 150 deputies [one-third of parliament]. No such proposal from the president nor any such initiative by 150 deputies was made. So one can say parliament committed a serious violation of the constitution.
And therefore today I firmly declare that the status of the government, of the prime minister and every minister, is the same as it was five days ago or a month ago. And that status answers the provisions of the constitution.
Most likely, talk about a so-called dismissal of the government had one purpose - to destabilise the political situation in Ukraine 80 days before the end of the campaign for parliamentary elections [due on March 26].
Nobody today has any doubt about the illegality of parliament’s vote. Even those who supported it today are calling on the government to work calmly until the completion of the elections and the formation of a new government.
That shows once more that the main point was not to evaluate the government’s work, to act according to the constitution, but to make political PR for the Yulia Tymoshenko bloc, the Lytvyn bloc, the Social Democrats. These groups need turbulence. It was their political game. They don’t represent any other values in this country anymore.
(FT) But doesn’t your administration suffer from the image that you are losing control and that your government is in legal limbo?
(Yushchenko) I think if you read the changes that were made to the constitution [agreed during the 2004 Orange Revolution and taking effect on January 1 this year, which stripped the presidency of most of its powers, including the powers to nominate the prime minister and form the cabinet], you will very easily come to the conclusion that the powers of the Ukrainian president under the new constitution are [still] much greater than many presidents in Europe. So there’s no need for regrets about that.
I think the most important thing that we should demonstrate today in such a crucial period of Ukrainian democracy, during this election campaign and the parliamentary elections, are a number of principles, among which I would place first respect for the constitution and the law. I think that is the primary characteristic of a democracy. Second, the nation and especially political forces should demonstrate solidarity. Because this is a difficult period. And I think that establishing stability would be the best background for holding these elections.
Today we have a government with full powers, a fully working executive branch at all levels. This parliament is already in its last days, it’s going on a break and then there will be elections. That’s why I feel that there’s absolutely no doubt about whether the government can manage the country. I have proposed to parliament to revoke its resolution regarding the dismissal of the cabinet. I have sent instructions to the regional governors on the fulfilment of their duties during the first quarter of this year.
I also revoked my signature from the memorandum on cooperation between the authorities and the opposition [signed in September with most parliamentary opposition leaders, in order to secure confirmation of his prime minister, Yuri Yekhanurov], because a number of opposition groups broke the obligations they undertook. That’s why I think this political adventure thought up by the Tymoshenko bloc, the Social Democrats, the Communists, had one goal: not to judge the government’s work according to the constitution, but to destabilise the situation. They won’t succeed.
(FT) Are you worried that you could end up like Mykhailo Hrushevsky, who founded Ukrainian democracy in 1918, but couldn’t defend it?
(Yushchenko) Well, that’s a somewhat different question. We start from the position that the changes to the constitution were an anti-constitutional action, hidden from the people. The changes to constitutional order happened without a national referendum, as the constitution demands, and with violations of the procedure for their consideration by parliament, including the obligation for discussion. Not one statute was discussed in parliament. And a number of other things back up the conclusion that the changes were unconstitutional.
And from there I derive the logic of my next steps, which will be outlined in a separate initiative. I think it shouldn’t be done right now for one reason: it could destabilise the situation before the elections. But that the constitution will have to be defended is an obvious fact, with the help of the people, with the help of a referendum, with the mobilisation of all democratic forces. After that I will give the full answer to your question, ‘how we defended Ukrainian democracy’.
(FT) When will this referendum on the constitution be held?
(Yushchenko) I would not like to answer that question, because it’s a separate plan, which I would like to be agreed, more or less agreed through the internal political processes in the country.
(FT) But there will be a referendum, sometime?
(Yushchenko) Well, I said what I said.
(FT) Many people who supported the Orange Revolution have recently been criticising you and questioning whether you have the strength or the desire to stand up for its ideals. Why do you think there is such disappointment?
(Yushchenko) [Interrupting] And disappointment about what, tell me? For example, are people dissatisfied with freedom of speech, with democracy, with the availability of work, with pensions, with the economy? Where is the disappointment, tell me, and it will be easier for me to comment.
(FT) About the pace of change, about the economy
(Yushchenko) Let me simplify your mission. Because there is no disappointment of any kind. If we’re speaking seriously. If we’re speaking politically …
(FT) Why have the poll ratings of your party been falling?
(Yushchenko) Well, poll ratings, that’s different. Let’s take seriously this question that you’re posing. If you compare the combined ratings of the democratic forces that made the Ukrainian revolution one year ago and today, their ratings have increased. We’re talking about Our Ukraine [his party], the Socialists, the Tymoshenko bloc, the Party of Industrialists and Entrepreneurs and another 15 or so parties. If you combine all the ratings of these groups I assure you that trust in them has grown, not shrunk. How and why that trust is divided among the different parties is another question, which you aren’t asking, although I could also give an answer.
So, the democratic forces, the democratic potential, the democratic values which were declared on the Maidan [Kiev’s central square] have not been betrayed one iota, not by the revolutionaries nor by the people who stood together with us on the Maidan. I want that to be heard as a matter of principle. All the rest is just vinaigrette which you can make from different ingredients. The democratic potential of this country has not been set back at all.
Not only is there no turning away from the democratic values that were key to the events of November 2004, I would underline that we have made obvious progress in strengthening those values. You as a journalist can easily notice the freedom of speech in this country, which a year ago wasn’t even imagined. We have public, honest political competition. No one is persecuting anybody, not the SBU (state security service), not the police, not the president, not the prime minister.
We have economic progress. Ukraine’s economy a year and a half ago survived the kind of shock which I think no country in Europe has felt in a long time. It’s obvious: a pre-election period, then a revolution, for business it was a difficult trial. Today we have an economy with about 3 per cent GDP growth, where real incomes increased last year by 21 per cent, where personal bank deposits grew by I think by 76 per cent. If we’re talking about the social component, 2005 was the most successful year this country has known. Never before in our history have wages grown by 35 per cent, have minimum pensions been level with the minimum livable income. The budget deficit is smaller than planned. The central bank’s reserves doubled and equal about 7 months of imports. Foreign investment increased to $7bn, when total foreign investment over the previous 14 years had totalled $9bn.
If we’re speaking honestly and professionally, we can draw three key conclusions. First, Ukraine preserved economic stability and in recent months has added a growth dynamic in key economic sectors and a fiscally balanced budget system. Second, there is a high level of macroeconomic culture which is encouraging growth in investment and the development of particular economic sectors. Third, we have freedom of speech - that’s a unique victory of the revolution.
Of course there are many challenges, including the problem of corruption. But allow that corruption did not begin with the revolution. It’s something we inherited from the previous authorities. Ukraine rose from 128th place in the rankings of international analysts to I think 112th place. [Transparency International’s corruption perceptions index put Ukraine in a 10-way tie for 107th place out of 159 countries in 2005 and a seven-way tie for 122nd place out of 146 countries ranked in 2004]. That’s not so much, but it’s after just seven or 10 months of this administration.
First, we’ve changed thousands of bureaucrats, brought in more honest and more professional people. And of course we adopted new policies to combat corruption, which don’t bear fruit immediately.
Second, we are radically reviewing the functions of government, and have already cancelled almost six thousand different kinds of legal acts, including laws, presidential decrees and other regulations, in order to minimise the bureaucrat’s influence on the economy.
Third is the court system. Ukraine hasn’t had independent judges for a long time. When we came to power, 40 per cent of court decisions weren’t being fulfilled. The president has little influence over the selection of judges. We are preparing a judicial reform which will deal with these problems.
Fourth, we want to get rid of the problem of impoverished officials who look at every visitor as a potential payer of tribute. That’s why we seriously increased state officials’ pay, starting with judges, whose pay was doubled in this year’s budget, and ending with executive branch officials. The goal is to show people how to live honestly, so they don’t need to take bribes. The interior ministry has opened more than 1,500 criminal cases against officials. That’s several times more than in previous years. Taking these cases to court of course presents difficulties, and not small ones.
I just want to attest that the president and executive authorities are doing their work. Get to know Ukraine better, remember the challenges that this country faced, or better understand the actions that this government is taking, so that you don’t make overly pessimistic evaluations.
That’s me attacking you, because there’s two options: either you attack the journalist, or the journalist attacks you.
(FT) This recent agreement with Russia on natural gas supplies and its inclusion of RosUkrEnergo as sole supplier to Ukraine hase raised many questions
(Yushchenko) I’ll start with the history. The gas which we bought from Turkmenistan has always been supplied the same way - across the territory of Russia. There is no alternative. And that transit has been carried out of by one of three organisations during the past five or seven years. There has always been some kind of Russian organisation which, in the name of Gazprom, carried out the transit of Turkmen gas belonging to Ukraine across Russia. Before the Orange Revolution and since, nothing about that practice has changed.
Ukraine has never in any way had any relationship with the formation of these organisations, please underline that. And I declare now that Ukraine doesn’t have any relationship to RosUkrEnergo, neither as a country nor as some kind of corporate structure. RosUkrEnergo was formed by Gazprombank, a Gazprom structure, and a daughter company of Raiffeisen Bank, to which Ukraine has no relationship and couldn’t have.
I asked the Russian president to give all the help needed so that Ukraine, as one of the interested parties in the transit of gas, would receive a corresponding place in RosUkrEnergo, so that we would feel ourselves a full member of the gas transit process, with the use of any structure including the one we’re talking about. And that’s all I can say about that question.
(FT) Why are so many representatives of big industry criticising the gas deal?
(Yushchenko) If they have a way to buy gas cheaper, they can do that. I can only attest that the price for gas that Ukraine has today, $95 per thousand cubic meters, is the cheapest price for gas in eastern Europe. Please underline that. Except Belarus. If any of these businessmen have the means to receive gas even cheaper, I would only welcome it. Maybe in England they can buy gas cheaper. It’s I guess $410 there.
(FT) After this week’s vote, which of the main parties is it still possible for your party to join with in a coalition? Particularly regarding the Tymoshenko bloc, Lytvyn bloc and Regions party, do you rule any of them out?
(Yushchenko) I think it’s still too early to talk about that. Because no one knows the final strength of this or that political force, how they will finish the electoral marathon, how they will be represented in parliament. I want to say one thing, the political force that will get the largest number of seats in parliament will be Our Ukraine. But the party will have to consider with whom to form a coalition. It all depends on the other political forces’ results.
(FT) So a coalition is possible even with Regions?
(Yushchenko) We will start from the position that the political coalition should correspond to the political, economic and humanitarian values that we spoke about on the Maidan - that is, democratic values. The criteria will be the possibility to share common policies. Without any other conditions set beforehand. Without any.
(FT) So then if Regions continues to oppose what was said and done on the Maidan, then that excludes the possibility of a coalition?
(Yushchenko) You know, when you look at how the Tymoshenko bloc votes, there’s no force more against [what was said and done on the Maidan], starting with the laws needed to enter the World Trade Organisation and ending with the budget, the new fiscal politics. [note: the Tymoshenko bloc voted for WTO accession bills].
So the logic of all these groups you’ve mentioned is very flat-footed and simple - when you’re not in government, you should say everything against government. As if in that way you will get more votes. Unfortunately Tymoshenko went down that road and joined up with the Communists and [Viktor] Yanukovich [leader of the Regions party and Mr Yushchenko’s opponent in the 2004 presidential election]. And her decision, this week’s vote by her bloc, is a demonstration of how national interests can be betrayed.
I understand that it’s an election campaign. The groups we’re talking about have traditionally run dirty campaigns. This will all pass.
I think people are starting to understand better who is who in Ukrainian politics, what kind of policies they carry out, what kind of goals they have. And what’s going on now, I think it’s a good test for the voter, showing how much this or that political force values political stability, how much they respect the constitution. I think it’s a good set of tests for those political forces which have such destructive positions and which want to form the future coalition in parliament and the government.
(FT) How did Russia’s actions to reduce supplies of natural gas into Ukraine’s pipeline, change the way you see the future of Russian-Ukrainian relations?
(Yushchenko) I felt it every second. When on December 22 I read the official letter from Gazprom where the price of $230 [per thousand cubic meters] was officially raised for the first time, I immediately told my colleagues at Naftogaz [Ukraine’s state oil and gas company] that above all, that is a political price, that of course this is political pressure on Ukraine. And that we needed to find a professional answer, to take this conflict out of the political sphere and regulate it on the level of business. I won’t retell what we went through when they cut us off by 122 million cubic meters per day, which we used exclusively to secure transit of gas to Europe. Russia paid us with that gas for transit services. And when those payments were stopped we withdrew 107 million cubic meters over two days from our underground storage and sent it west to Europe, so that Europe wouldn’t feel what Ukraine felt after the gas was cut off. And I think Europe knows that and understands, that we wanted to demonstrate respect to consumers and to our political partners in the west, and demonstrate complete guarantee of transit services from the Ukrainian side. Now it’s all in the past. The most important thing is, we have gas for $95 per thousand cubic meters at the Ukrainian border.
(FT) But only for six months, and then what?
(Yushchenko) If you read the agreement attentively, it says neither the price of gas nor the tariffs on transit of gas to Europe can be changed unilaterally by either side. And the half-year duration is there only in case, in the second half of the year, the price for Turkmen gas will increase by $10, and that of course needed to be accounted for in the agreement. And that’s all. But the basic agreement says that for 5 years neither side has the right to review the price.
(FT) But if Russia and Ukraine can’t agree on prices, it seems the only way either side can bring pressure on the other is to cut supplies of gas to Europe.
(Yushchenko) You know, I think that those methods are already in the past. I think that was the main lesson learned from this conflict. And that Ukraine still has the cheapest gas in eastern Europe after Belarus is a success of that policy. We raised the rate of transit tariffs, which hadn’t changed in more than 10 years. We received an increase of 11 billion cubic meters of gas across Ukraine. In 2005 we already had the most ever transit of gas across Ukraine, 120 billion cubic meters, including Russian, Turkmen and some Uzbek gas. In 2006 Russian gas alone will come to 121 billion. We established regulation of domestic gas prices by the National Electro-energy Regulation Commission, which demonstrates that we have a thought-out, very harmonious market mechanism.
(FT) You aren’t afraid that Russia could again use the same method of pressure in six months or in a year? Do you agree with those who say that Russia did it in order to push the Ukrainian parliament to sack your cabinet?
(Yushchenko) I don’t rule that out, but I won’t be the propagandist of that point of view, because it would be uncomfortable for me as president, it would be incorrect. If in our times there are authors of that kind of politics, then I would say that is weak politics, which has no perspective. I think Russia learned lessons, and Europe, and of course Ukraine. I think that what happened led many, including European organisations to look differently at their conception of the organisation of the European energy market. And that's why Ukraine is ready today to integrate as deeply as possible with the European energy market.
We would like to propose to work together with countries that have resources to form the maximum market-based, maximum guaranteed model of supplies and transit of gas across Ukraine to Europe. We would like to present our strengths in transit to those countries that have gas. We are proposing to form new routes to secure the gas market from other sources. I don’t like the world “alternative” in this case. We simply, honestly should resolve how energy policy should be more diversified, and decide on realistic options. I’m speaking first of all about the countries of central Asia, which, I’m convinced, would like to be more strongly represented on the European market.
The same goes for Russia. We would like to expand our cooperation with Russia. We are talking today about the possibilities to expand certain bottlenecks in the transit system. For example the Bohorodchany-Uzhhorod link could increase transit possibilities to Europe by 20 billion cubic meters per year. These are projects where we would like to see Russian participation and European partners.
We want to demonstrate to everyone that we would like to make Ukraine’s transit market more accessible, so that in turn that market would be established as the most secure route of supplies for many, many years. We are speaking about Kazakhstan, we are speaking about Turkmenistan, we are speaking about different options of supplies of central Asian gas in this...
We are speaking about different options of supplies of central Asian gas, including across the Caucasus and the Black Sea. And it’s important here of course to find healthy compromises with everyone - to wreck things less and approach these questions more constructively.
(FT) But you won’t give a stake in Ukraine’s transport system to Gazprom?(Yushchenko) No. The Ukrainian gas transport system today belongs to Ukraine and Ukraine will not consider any questions regarding a change of that status.
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