Tymoshenko and the IMF – or is it really about the IMF?

Yulia Tymoshenko knows a thing or two about dealing with the IMF.  She has said so herself on several occasions when recently cricitising first former Prime Minister Yatseniuk, and latterly the current Prime Minister, Volodymr Groisman.

Indeed when Prime Minister she negotiated a deal with the IMF, the conditions to which she agreed she then reneged upon when required to implement them – which may make a reader wonder just how skilled at negotiation with the IMF she really is.  (If one instance of poor negotiation is not enough, then a reader may reference the gas deal she struck with The Kremlin resulting in the worst gas deal with Russia in Ukrainian history, (despite the welcome removal (visible) of intermediaries), is also worth pondering.)

Ms Tymoshenko apparently knows what the current IMF conditions are according to a report by Interfax – “Among Ukraine’s obligations are the cancellation of the moratorium on the sale of agricultural land.  If the moratorium is not prolonged, Ukraine will lose its main resource.”

She claimed that the IMF also planned to “virtually introduce external control over national, state Ukrainian banks.”  as well as seeking commitments to reduce the network of Ukrainian educational institutions.

So far, so standard regarding IMF conditionality just as the hiking of utility prices has long been a standard IMF demand – and the demand that she balked at when it was her turn to implement the IMF agreement she agreed that also included utility hikes.

The IMF has been fairly consistent with its requirements with every Ukrainian government that has negotiated with it – from gas pricing, to the funding of vast number of universities within the nation, to lifting the moratorium on the sale of agricultural land, there is really nothing new in her “revelations”.

Indeed the only thing new about the IMF demands this time is that both Prime Minister’s Yatseniuk and Groisman have more or less honoured the obligations they have entered into – unlike Ms Tymoshenko when it was her time to do so.

What catches the eye is this statement – “The nationalization of large Ukrainian private banks is foreseen. We want to know what the bank is, what the date of nationalization is and who will be responsible for the obligations the banks have to Ukrainians”.

Clearly she is referring to Ihor Kolomoisky’s Privat Bank.  A bank which is structurally critical to the current operation of the Ukrainian banking system, but that is otherwise bankrupt and has been for years.  This situation too, is no secret to anybody.

Indeed the nationalisation of Privat is unlikely to create too many issues for Ihor Kolomoisky given its otherwise bankrupt status.  He may well realise that if he can get rid of it now, it will save some severe and problematic issues in the not too distant future.  (The health of Ukrainian Airways (MAU) another Kolomoisky company is worthy of a look too for those interested in the Kolomoisky empire.)

Privat Bank, its condition and structural importance would of course raise flags for the IMF when considering the robustness of the Ukrainian banking system.

The question Ms Tymoshenko is really asking is what, if anything, Ihor Kolomoiskhy gets out of the deal on his side, and what the current leadership get (themselves) if the State nationalises Privat Bank removing this impending problem for Ihor Kolomoisky and also easing concerns within the IMF?

Do Mr Kolomoisky (and partners) retain any minority shares?  What about the high value loans heavily biased to other Kolomoisky companies and their ability to repay them – or not?  Are profitable bits of Privat (card payment infrastructure etc) to be split off, and if so who will own them and reap the rewards?  Who would be the negotiator with Ihor Kolomoisky if not President Poroshenko, the only person Mr Kolomoisky would negotiate with?

What reward does President Poroshenko personally desire from any such negotiations that ultimately remove a problem for Mr Kolomoisky?

The answer to that, if strong and repeated rumour be true, is a majority share in Mr Kolomoisky’s top rated TV station 1+1.

The President has one eye on his woeful popularity figures, and another eye on Presidential elections in just over 2 years time.  A 1+1 favourable editorial line toward President Poroshenko would be gratefully received and the only way to insure it with a sly character like Mr Kolomoisky is to own the majority share of 1+1.

1+1 together with the President’s Channel 5, and perhaps the fairly amenable (read rentable/for hire) Vadim Rabinovich and Evgen Muraev with NewsOne, will form a fairly solid national TV media platform from which to launch a presidential campaign for a second term – notwithstanding the administrative ability to throw a few policy sweeteners to the constituency and a few fairly big fish into the judicial frying pan if and when necessary – all with the timeliness associated to pre-election electioneering rather than official electioneering.

If this be the case, how does President Poroshenko buy a majority share in 1+1 when his business activities are now supposed to be run through a blind trust?  Is the trust blind in only one eye?  Will a trusted third party do the 1+1 (plausibly deniable) honours on behalf of President Poroshenko?

Will Mr Kolomoisky accept President Poroshenko saving him from serious banking problems/liabilities at the expense of control over the influential 1+1?  It is a question, according to rumour, that is still being pondered.

With Inter (if it is still operating and belonging to Dmitry Firtash) being an Opposition Block TV platform, the question in Ms Tymoshenko’s head perhaps is not what happens to Privat, but undoubtedly being aware of the persistent rumours surrounding the deals around what happens to Privat, is where she will find a national media platform that could compete.

Unless Ms Tymoshenko is entirely deaf to rumours circulating within her workplace, she already has a good idea of the answers to all the other questions – as do a lot of other people.

The symbolic signing of nothing special

There is much to be said for symbolism.

It can be inspiring, it can be unifying, it can be a moment of hope or defiance that ignites the courage of others – in short, it can have impact.

It can also be completely empty of meaning, condescending, devoid of rationale and ultimately, pointless in the extreme.

And so, 18th May brought to an end the 2 month “Rise Ukraine” strategy of the United Opposition – Batkivshchyna, UDAR and Svoboda parties – in Kyiv.

After countless rallies in numerous (opposition friendly) cities drawing crowds of a few thousand people each time – worryingly low numbers if you are an opposition party leader to be blunt – the finale in Kyiv attracted a only few thousands people once again.

I would have expected for 10,000 – 15,000 after months of rallies leading up to a well publicised finale – and even that number would be disappointing.

All the issues I raised in the above link back in March have proven to come to fruition – not that it would take anybody with a modicum of common sense and even the most basic understanding of Ukrainian politics and society any effort to come to that same conclusion.

When adding all the reported attendance numbers from all the rallies over the past 2 months, it doesn’t even get close to the gate numbers of Manchester United playing an average team on a very wet and cold Tuesday night at Old Trafford.

To be quite honest I still have no idea why the opposition embarked on such a strategy that was so clearly doomed to failure.  I still cannot deduce why I was asked to “rise” over the past 2 months just to now sit back down again – possibly until October 2015 when the next presidential elections are due.

There has certainly been no impact or identifiable causal effect from the “Rise Ukraine” campaign, other than to identify just how few people the opposition parties have managed to turn out during this time.

Hmmm.

Anyway, back to today’s “Rise Ukraine” (anti)climax of the 2 month campaign, which saw the opposition party leaders sign a joint agreement in front of a pitiful crowd of about 4,ooo people relating to the presidential elections in 2015.

This agreement states that all opposition parties will support any opposition candidate that makes it to the second round of voting in the presidential elections.

That is a significant change in rhetoric from the past few months where is has been consistently claimed that a single nominee from the United Opposition would run.

Now it seems rather than a single opposition candidate to run against the current incumbent from the very beginning of any presidential election campaign (in the first round), the opposition leaders have failed (unsurprisingly) to agree on one of them running for the top job with the unified support of the others from the off.

Thus the plan after the least popular two have been eliminated in the first round of voting, leaving one to go head to head with Yanukovych, is to then unite behind their last man standing for the second round of voting.  A cozy little agreement granted – but will the opposition voters turn out in sufficient number in the second round to vote for a candidate that is not the man they voted for, not from a party they voted for, and does not share the same ideology as the man and party they voted for in the first round only a few weeks previously?

As Klitschko never seems to tire of saying, there are ideological differences between himself, Yatseniuk and Tyahnybok, and the parties they lead.  That is also true of their supporters differing ideologies.

Time will tell if opposition unification around a single presidential candidate after the first round of voting, rather than prior to any voting, will prove to be a sound strategy – I have serious doubts that it is a good strategy, although I also have serious doubts (at the time of writing), that Yatseniuk, Klitschko or Tyahnybok will beat Yanukovych anyway (even with full transparency and on a level playing field – which they may not get).

And so to the impact and underlying realities of the symbolic signing of the joint statement of opposition leaders,  pledging to support each – other only when they themselves have been eliminated from the presidential race.

The underlying  and sad reality is, there is little genuine unity amongst the opposition.  The impact of this agreement is almost zero, given that when all is said and done, ultimately, the public will be faced with the choice between Yanukovych or another in the second round of voting – opposition agreement or not.

* * * * *

On a completely different subject, there will probably be nothing from me tomorrow as I am doing something for the BBC – and their filming may take some time as I am not a great fan of being on camera, so single takes are very unlikely.   Thus I doubt I will have the time or interest to blog after being “Beeb’d” all day.