Make Him Premier or Fire Him from National Bank?

There is little doubt that Viktor Yushchenko stands a better chance to get parliamentary approval than former Premier Valery Pustovoitenko. The fractions that blocked his passage are already known: apart from the Left opposition, they included Social Democrats, Rebirth of the Regions, and Labor Ukraine. However, another demonstration of dissent from the President’s stand (especially after his consultations) does not seem logical. The more so that Mr. Kuchma made it clear that, in the absence of a Cabinet, Parliament would be in for dissolution. Disagreeing with the President a second and third time could lead to a constitutional crisis.

Mr. Yushchenko’s professional and personal virtues raise no questions. The question is whether he — or any other Premier, for that matter — will secure the Cabinet’s effective performance. This can be accomplished only if the government is granted expanded authority (including the Premier, of course), something that can be done only if the chief executive allows it and if the Premier is authorized to appoint key ministers and have his say when appointing their deputies. So far this is, unfortunately, the President’s prerogative. If he has this kind of authority his chances as an effective Premier will increase substantially.

There are various opinions about Mr. Yushchenko’s NBU successor, mostly hypotheses. Among others Ihor Yushko stands out as a professional banker who did much to make the law on the National Bank a reality. Serhiy Tyhypko looks attractive, too, but it would make sense to let him continue in his current government status, so he could help Yushchenko. Also, Bohdan Hubsky, another professional who knows his way through the labyrinth of finance, market economy, management of the public debt, tax, and investment policy. Personally, I see the next head of NBU as a man with a practical vision of the banking system. Mr. Hubsky seems to have chance as Finance or Economy Minister. It is also true, however, that Ihor Mytiukov seems at the right place and his role in the future restructuring of debts is hard to overestimate.

Will Mr. Yushchenko’s proposed promotion help his political career? Being Premier would open broader horizons, of course, but we are talking about a political post and the situation is anything but simple. There is the imminent danger of default, even if it is theoretically possible to circumvent it. In fact, I do not regard default as fatal. Russia’s example shows that it has its advantages, such as the possibility to substantially revise debts, understand their sources — in this case ineffective management of the energy industry — and make an attempt to have some of them written off to ease the burden on the state. There are also tasks far more complex than the threat of default: building the government on new principles ruling out its meddling in economic affairs, in business. If Mr. Yushchenko succeeds in doing just that, he will have the best of support from political forces. Naturally, he will need a reliable team, for finding oneself alone in this situation would mean weakening one’s political prospects.

On December 21 Parliament is to vote whether to confirm Viktor Yushchenko, current head of the National Bank, as Prime Minister. It could say no, thus starting the third episode in the Premier Saga.

This gives rise to the following questions: What will Verkhovna Rada say? If yes, who will replace him at the NBU, a more than responsible, even crucial post? What course will Mr. Yushchenko’s career take in view of the clear and present danger of default and the Ukrainian Premier’s traditional scapegoat role?