In an interview with The Day, Ukraina moloda, and Fakty i kommentarii, President Viktor Yushchenko reflects on the further destiny of the national currency, parliament, parliamentary coalition, democracy, and Ukraine in general.
Mr. President, as the Tymoshenko Bloc (BYuT), Our Ukraine-People’s Self-Defense (NU-NS) and the Lytvyn Bloc have formed a coalition, members of parliament, including some from the NU-NS faction, are saying that you opposed this formation. Will you comment on this?
“Our parliament can only be viable if it has a majority of deputies who have assumed responsibility for the economic, social, and political course. Since 2004, when the previous president made constitutional changes, the key powers in forming the government and shaping the national economic, social and cultural policy have belonged to the Cabinet of Ministers and the Verkhovna Rada of Ukraine. Lets us face it: if we are to pursue a consistent course in the above-mentioned matters, we must have a viable parliament. So it would be rather strange if a certain political entity opposed a viable parliament. The president would also like to see parliament not as an institution that is kept up at the expense of taxes, including mine, but a body that makes decisions indispensable for the state and the nation.
“I am not going to recall the parliamentary ups and downs after the reform, but I am convinced that it is a proven fact for the president and society that parliament is sagging and is unable to effectively exercise the powers and functions it was vested with by the constitutional reform. We can say in this case that the constitutional reform has brought about a dramatic imbalance in the Ukrainian system of government. At the same time, we should say that the Constitution of Ukraine is still in force and the Ukrainian parliament must work.
“A coalition is one of the factors that ensure a trouble-free operation of parliament. The Constitution does not allow a parliament without a coalition, while the constitutions of many European countries allow the formation of a minority government, if necessary. For example, Denmark has had this kind of government for eight years now and, paradoxically, it is the most stable one in the entire history of that country. It is therefore difficult to say what checks and balances are being formed at a certain moment of parliamentary work: the main point is that we should see a stable parliament.”
And what about a concrete coalition model which can make the Ukrainian parliament viable?
“I am convinced that this model can be devised in the now existing situation. The results of the latest parliamentary elections showed that the score is in fact 1 to 1. A two-vote margin of an inessential difference. Therefore, to pursue a predictable and consistent policy, we should minimize inter-camp differences. I am not saying this will be an ideological club, but, at least in the matters of the economy, anti-crisis actions, and the logic of the constitutional process, we should seek tolerance and mutual understanding. Contradictions and an face-offs will result in nothing but a fiasco. I an speaking now as a democrat, as a person who adheres to neither the communist nor the social-populist ideology. I am sure we must defuse the parliamentary crisis, reach an understanding, and take the steps that could stabilize the situation in the state in two, three, four or five months. The coalition issue polarizes parliament irrespective of the coalition configuration. One side fears a BYuT-Party of Region coalition like the plague and is persuading us that this kind of coalition is bereft of ideology and is poses a threat to our European interests, the security policy, and humanitarian policy, etc. These political elements will be unable to come up to national expectations, given the current global and domestic crisis. This is a dangerous symbiosis. Oddly enough, these political elements are very far apart and, at the same time, very close. It is on the one hand. On the other hand ( I am saying this on behalf of the NU-NS’s part that was brought up in the spirit of Our Ukraine ideology), we cannot agree to the economic course pursued by the current prime minister. I could not even imagine that we would have a manually-managed economy in 2008. Somebody suddenly wanted to import tax—free 600,000 tons of not very fresh meat...”
But the situation was the same in 2005
“Undoubtedly. A meat, milk or gasoline crisis haunted us almost every quarter. What we see today, in 2008, is a mirror reflection of 2005. It is no longer an episode — it is a style, a persuasion. I do not mean ‘bad persuasion,’ I mean ‘persuasions alien to me.’ Being chivalrous to a lady, I will not be naming names, I will just point out that we have raised social standards by 49-50 percent in the past year. And we are just waiting for somebody to submit the 2009 budget. Nobody is willing to offer the budget, everybody is scared because populism has resulted in the commitments that the national economy is unable to meet. We went through the first quarter, reached a year’s inflation rate in three months, and now they say it is Yanukovych to blame. Then, when the second quarter began, they put the blame on an external factor, i.e., energy resources, although their share does not exceed 1.5 percent. The fear of acknowledging a mistake does not mean that the person adheres their ideology and course, it means that the person is unable to change and make a different kind of decisions. It is dangerous, especially if a policy is being shaped by one person rather than by a team, a government. There is no trust, and everybody is sick and tired of these relations. The coalition agreement is not a show stunt, it must be fulfilled. We should learn to intervene into, change and update this kind of policies. Things went so far that the word ‘reform’ is only used in jokes, but it is not a joke, it is a great risk because only a strong premier and a strong government, who do not put politics before anything else, can find a way out of today’s situation. We must cut short populism and underhand methods which the current team is gravitating to. We need a prime minister who will be honestly telling the nation about its real problems.
“So, to begin with, we should somewhat lower the bar. We should not raise the coalition question if it is such a difficult thing that polarizes both the parliament and society. OK, let the majority work — a majority that will not be pulling us too much right or left, a majority that will focus on a pragmatic policy. It would be a good idea to begin this policy with the 2009 budget. The budget must be realistic and well-balanced, no matter who will the prime minister in six months or a year. But now, whenever Pynzenyk is presenting the governmental budget, everybody’s eyes are popping for fear of having to make this kind of budget public. But I think the minister of finance is right, for we must look closely into the problems that have come up as the result of a populist policy in 2008. If the Employment Fund has a two-billion deficit, it is a yellow card! How could it happen that the fund, which is supposed to be the first to help an individual who has lost his or her job, ended up without money? It is not a question of sweet words: the question is that every word should entail responsibility. Are we speaking about the budget? Sorry, but when we see a 40-billion deficit, this takes the wind out of our sails — nobody will ever propose a budget like this. I am not saying it is a fatality. I am saying that we should seriously revise the current economic course because it leading us into a blind alley. What is a pragmatic, not populist, policy in parliament? It is when the BYuT, the Party of Regions, Our Ukraine, and the Lytvyn Bloc are capable of responding to the current challenges. It is the best line, and let them approve the budget by 300 to 350 votes. For, not to bring a, pardon me, monster to the Verkhovna Rada, one must approve a package that will cushion the state budget problem. As the budget has been drawn up now, it should not be submitted, for we should revise the rules of the game because the existing rules are ill-considered and crowd-pleasing. So this raises the issue of a pre-budgetary package.
“This is a Ukrainian-made crisis or, to be more exact, the crisis of the current economic and social policies. And let us not shift the blame to some worldwide crisis, let us address our domestic problems.”
However, there is a coalition in parliament. Does this cancel the problem of the early elections?
“Indeed, everybody is afraid today of fresh elections. But today the elections cannot be as effective a response as they could have been, say three months ago. The situation is different now. We will not be able to finish the policies of 2008 and shape the policies of 2009 if we focus on the policy of elections. We should stop and say that elections is not a top priority now. Nobody should be afraid — neither the parliament which does not want to the elections nor the cabinet. What should unite us today is the situation and the challenges — both foreign and domestic. As for the coalition, there was a congress of our party. The congress explained why we can no longer form a coalition with Prime Minister Tymoshenko at the head. This decision was made without any reproaches or insults — it is the right of a party. The resolution said in quite sincere terms: we are not enemies, but we cannot accept the policy that the prime minister is pursuing. I do not want to put up with this policy and do not want to confirm that a policy of irresponsibility and populism, a policy that is very far from changes and reforms, is what Ukraine needs today. On the other hand, it is quite obvious that it is impossible to overburden the political force named BYuT with market-related commitments. They will not assume these commitments and even if they do, they will fail to meet them, as they did last year and in 2005. This is the second goal: first politics and then instruments of the government. But I would like it to be the other way round. We need a daredevil premier. Some will call him provisional, pragmatic or even apolitical. It should be a person who will not be looking back to see what the voter is thinking of him. I a sorry to say this, but I really want to see a premier who will bear responsibility for correct and rational decisions no matter how the man in the street will judge it. For the man in the street won’t accept a lot of necessary actions today.”
But there is a premier and a coalition today...
“We are holding the second stage of the congress next week, and I am sure the congress will also take a certain attitude to those who supported the coalition contrary to the congress decision and will suggest expelling these people from the party and its election list. Any political force would have done so, for if there is a binding decision that we cannot support this kind of policies, this decision obviously concerns every party member, including a parliamentarian. Frankly speaking, I have made a lot of efforts to make every MP understand the decision that we made, the assessments and the arguments of why this should not be done. I consider it my duty to do so, as a representative of this party. The parliamentary coalition? This was a hidden, under-the-rug policy. The official negotiations of the faction leader (the faction ex-leader Viacheslav Kyrylenko — Ed.) ended without any decisions of the faction to join the coalition. Except, of course, the Tuesday decision. But then came some protocols to which the Verkhovna Rada speaker and the prime minister refer. Where, at the sessions of which factions, were these decisions made? Nobody can show us the protocols. So this raises a suspicion, a fear and a question: why is the coalition being built by such methods? It is unacceptable and immoral. There should be a public process, and what do we see? Somebody was assigned vice-speakership, three people, if I am not mistaken, were offered the office of coal-mining minister, two — the Employment Fund and the Antimonopoly Committee. But, as a result, nobody has got anything. This mess reminds me very much of the vaudeville of the political corruption that came to the Ukrainian parliament in 1996, when some Dnipropetrovsk-based deputies came over. And it is a fact that today’s so-called coalition rests on political corruption. We are returning to the den from which we have long been running away. Only eighteen months ago we were indignant at the coalition that Moroz was making, a coalition based on corruption. And today’s ‘coalition’ was built on a similar pattern. Fear. Motive. Behind-the-scenes talks. It is the way of honest politics. And one more thing. A working coalition is 226. I am convinced that when the Constitutional Court was interpreting a majority coalition, it proceeded from the assumption that one of the key signs of a de jure formed coalition is its majority. In simpler terms, if there is no this sacramental number of 226, it is not a coalition. And what is the outcome? Thirty seven deputies of one faction (NU-NS — Ed.) got together and gave the world a piece of good news: a coalition has at last been formed. But, for some reason, nobody is announcing it. Why? Because everybody is very well aware that this so-called coalition can only work if the Communist Party becomes an integral part of it. And this is a still more contemptible approach to coalition formation. This is why I am not optimistic about this coalition. Obviously, the only goal of all this bustling activity was saving the office. But nobody is raising today the question of a threat to the office. The question is altogether different now: are we able to unite without any illusory decisions and pass a package resolution that will really stabilize the situation in Ukraine? The newly-formed coalition cannot possibly answer this question.
“As president of a free country, I will welcome any coalition, as my office obliges me to do so. But, at the same time, if this coalition is in an embryonic state, when it is not clear if it has been formed de jure and only the communists can ensure its de facto existence, then I, as a rank-and-file citizen of this country, will say the following. I would not advise anybody to make us of the communist ideology in the third millennium. I am convinced that the Ukrainian nation has paid the highest price in the world to keep this ideology at bay. Even today we are looking for the graves of our grandfathers and great-grandmothers! And what do we see? We see that the elements, which declaring their supposedly democratic and market-economy nature, are turning to the ideology for help. And I see today the Communists drawing up the parliamentary agenda and deciding what the Yulia Tymoshenko Bloc will or will not do. Sorry, but it is humiliating! A party which, according to intelligence information, is being funded by foreign sources and is working contrary to our interests is deciding today how Ukraine should celebrate November 7 or how to introduce a second official language. I may be revealing my sentiments too much, but I really want to see a viable parliament. Instead of running to the polling station, we should join our efforts to pass the laws that would cushion the shock of our own and the imported crisis.
“Just before we decreed to call a snap election, the situation was that parliament was maintained at the expense of taxpayers’ money and was producing no effect. This created a problem, though. Our tragedy is that it is impossible to dismiss a prime minister. Not a single prime minister can voluntarily abandon his or her office — neither the previous one, Yanukovych, nor the current one. If the premier adhered to democratic principles, she would have a resource for holding the elections. I mean the Reserve Fund which amounted to 900 million at the moment of the crisis, and the Central Election Commission requested to be given, if I am not mistaken, 350 million for the elections. But the prime minister failed to show political will. Moreover, she resorted to a counteraction — to thwart the elections. We should not torment society, we should not cut off the cat’s tail piecemeal. Either you reach a compromise in parliament, which I always welcome, or read Clause 2 of the Constitution, which says: go to the polls. In any case, the situation in parliament should not depend on the prime minister’s opinion alone, when, as a result, the country takes a downward spin: there is political will, but there are no funds.
“I like very much a Chinese hieroglyph which means a crisis and consists of two parts. One part is collapse and the other is hope. Everybody without exception understands that when we ride out the crisis, we will be absolutely different. But we will not ride out the crisis without a new policy. And if do not pursue this new policy as soon as we can, a new team will come in the course of time and say: ‘I am prepared to assume responsibility and do unpopular things.’ The year’s budget is the best response to the crisis. And if we are afraid to hold a budgetary debate and submit this budget, all the rest is, pardon me, chewing the rag because wee will not overcome the crisis without the budget.”
Mr. Yushchenko, will you comment on the parliamentary events on Tuesday, especially the position of the Our Ukraine-People’s Self-Defense faction and the dismissal of the faction leadership?
“I think it is a good process. It is a process of catharsis, a process that I have so long been waiting for because it was necessary that people make an ideological choice and opt for one party or another. They did so. I respect their choice and think that Tuesday was a politically significant day.”
Mr. President, what is your attitude to the Party of Regions’ intention to foment civil unrest all over the country unless Ms. Tymoshenko’s government duly responds to the urgent economic challenges within 100 days? Is it worth incensing people today?
“I think it is worth incensing people in general, but the purpose of political institutions is to defuse crises by means of a dialogue. A party exists, first of all, in order to harmonize the positions of the pubic and the government. But in this case I think it advisable to draw a parallel with boxing, when each athlete shows what kind of a dressing gown he is wearing, what kind of assistants he has, how they are sprinkling him with eau-de-Cologne and massaging. I think this is the message in this context.”
In a televised address to the people the next day after Lytvyn was elected as speaker, Prime Minister Yulia Tymoshenko said that the latest parliamentary events had been the reflection of “a meaningless struggle for a second presidential term at any cost.” Have you decided to participate or not in the future presidential campaign? Are you aware of a likely severe debacle in 2009?
“I will give a very passionless answer to this question. It is not my problem. It is the problem of you, the people who have today the honor of representing Ukrainian journalism and 47 million Ukrainians. It is the choice that I made, too. I have lived my life the way I wanted to, I have lived it worthily and I was always convinced that a democratic regime is the best gift to the nation, as far as its prospects are concerned. I am a self-sufficient person, I know why I was born for and what I have achieved, and I will be where I will want to.
“One should be a realist, not an idealist. Ukraine has been independent for 17 years. Seventeen years is a formative age for a human, and we are speaking about a state that we respect and love. I visited the other day a wonderful soiree dedicated to the jubilee of Yevhen Sverstiuk (a Shevchenko Prize winner, a well-known human rights champion, a man of letters, and an academic who celebrated his 80th birthday the other day — Ed.) who gave a brilliant answer to, above all, young people. The answer is that we received an independent Ukraine with a huge heap of garbage, as we were robbed of our history, lost our mentality, had our morality crushed and our church ruined. In other words, we had existed as a subsidiary for centuries and had no attributes of statehood. Even today, most of the politicians have no reflex to defend and stand up for our statehood. God forbid they shake a finger from across the border! And, you know, it is a sensation of disability, when we cannot speak out loud about the criteria on which a nation and a state is based. In what kind of state are we going to live? In a state that does not respect its language? So this state just cannot exist. Are we going to live in a state without remembering its name? Every state is gleaning, bit by bit, its history and it thus wants to demonstrate that it is one of the bases of its identity. So, when we are speaking about who should be the president of Ukraine, I think it should be a person who does not regard the word ‘patriot’ as a swearword, a person who will reinforce Ukrainian democracy — the best thing that the Orange Revolution gave us. May God give this president a majority in parliament. May God give him a government. I would personally like very much to see this kind of harmony among the branches of power. But the most important thing is not to trample on democracy. It is easy to forget what we have, but democracy is a unique instrument that allows distinguishing between what is good and bad.”
And if we drop rhetoric, have you decided whether you will take part in the coming election campaign?
“I will say that I am still thinking it over. I am sure it is too early to make this kind of statements. I do not doubt that we will talk about this when the time comes.”
Your forecast about the further destiny of the national currency?
“As a person who introduced the hryvnia, I have in fact done everything for Ukraine to have a reliable monetary unit. The National Bank carried out this reform. In my view, it was one of Europe’s most progressive reforms in the last 50-60 years. It was a successful reform, a model to learn from. This reform was being drawn up at a difficult time, when very few people believed that it was possible. And when I was walking to the TV studio on a Sunday evening to announce the monetary reform, there had not even been a presidential decree to this effect. I was told: ‘Come on, come on! We’ll see later.’ Now the crucial moment is that the hryvnia has succeeded as a national currency and it inspired confidence in the banking system. In other words, the hryvnia has lived the past ten years as a gracious lady. There was a number of obstacles on its path, but we successfully overcame them. I trust the National Bank. Firstly, it is a supranational institution for which the government, private individuals, and business are all equal, and this determines its special status as well as special responsibility. The National Bank must not give in easily to attacks, assessments and temptations, and we must do our utmost to keep the institution independent. Secondly, when we talk about the hryvnia’s exchange rate, do we really understand what this rate consists of? The National Bank does not set but keeps up the rate. The rate is set on the market by the buyer, on the one hand, and the seller, on the other. It is the competition of these two streams that shapes the rate. The National Bank is particular in that it has hard currency reserves which it can use for an attack if the rate is under a threat because of a some circumstances. In other words, the hard currency reserve is the NBU’s credo which can be used to eliminate the circumstance but not the tendency. The rate is an integral on which the beams of many policies are focused, while the National Bank is only a fixer.
“When we see the rate changed, we should look for a factor that is not related to the National Bank. The point is that there are serious flaws in the policy of trade, payments or budget — the water is leaking from the bucket somewhere.
“I think one of the National Bank’s main problems is a weak communication. I am convinced that the NBU should explain its truth from the TV screen from morning to night. Now some figures. The withdrawal of individual deposits has amounted to UAH 48 billion in the past two months and, according to statistics, the total amount of deposits is 107 billion in the national currency. Who serviced them? Only the National Bank. There were practically no other resources. At the same time, individuals bought hard currency worth 6 billion dollars and the NBU should also service this process, even though the economy seriously loses out on this. The National Bank has done tremendous work, including that which it has never been doing before, because this sector has never seen a crisis of this magnitude.
“There is a cause and an effect. The rate is an effect. I something has been underdone in the trade, investment and budgetary policies, there will be problems with the exchange rate. At the same time, we have a lot of positive signals and, in my view, the problem of stabilization has in fact been solved. I am still insisting that the hryvnia was overdevalued, which was mainly caused by a hectic demand. This is a mentality that no informational, governmental and banking efforts could change. In other words, the factor that mostly affected the situation on the Ukrainian stock market is the psychological factor that triggers a colossal speculative demand. Therefore the No. 1 task is to stabilize the currency. Last week there was a situation for the first time, when people sold more dollars than they bought. This is the first signal that society has satisfied its appetite. This tendency lasted for two or three days. But even now the purchase-sale difference is two million, while it used to be 50. Two million is not yet stability, but we can say it is a precursor. In plain words, the process is dying out.
“The National Bank is beginning a large-scale intervention via an auction to be held every day, and I think that today we may see a stable national currency. We have ample grounds to speak about positive changes and to say that the point of equilibrium has in fact been achieved and this may be put into practice in the nearest future.”
