At the end of June, the political future of the prime minister will be decided in parliament. Groysman might maintain his position and stay there until the 2019 presidential election. However, if Groysman does not support Poroshenko and continues the confrontation with the President, he will end up with resignation and a number of criminal cases concerning illegal enrichment gained when he was the mayor of Vinnytsia. At the same time, Groysman may develop an independent political project or create a new party in collaboration with Yatsenyuk.
Relations between the President and the Prime Minister continue deteriorating rapidly. The election headquarters of Petro Poroshenko are to be expanded in July. However, the president’s team still does not understand what role Groysman will play in this campaign. Is he either or a pragmatic ally of the President, or a neutral player with his own political ambitions for the next parliamentary election? Maybe he is even a potential enemy? How shall Poroshenko formulate a strategy of behavior towards a cunning Prime Minister oriented at the People’s Front and independently floundering with the oligarchs, earning on his own, while creating many problems for the President and his environment?
There is hardly time left to reach the global political agreements between the PF and the BPP. The problem is also that the People’s Front and most political stakeholders (with the exception of Yulia Tymoshenko) put pressure on Poroshenko demanding constitutional reform in order to limit the powers and functions of the President. Many contradictions between Groysman and Poroshenko occurred during two last years.
The main lines of split between the President and the Prime Minister:
- Global political differences. Volodymyr Groysman does not want to be the VIP-agitator of Petro Poroshenko and his BPP party during the presidential campaign. The Prime Minister has his own political ambitions, and therefore uses all political dividends from governmental achievements and distances himself from the President as much as possible.
- Privatization of strategic enterprises. The Prime Minister traditionally has a significant bureaucratic and informal influence on privatization processes. For example, there are currently sharp contradictions between the Groysman and the President’s environment regarding the vision of the process of privatization of strategic enterprises, including the Odesa Port Plant.
- Distribution of governmental subventions to majoritarian constituencies. The Prime Minister defines and distributes subventions from the state budget to majoritarian constituencies. Accordingly, MPs negotiate for funds for their constituencies with Groysman, rather than with the Presidential Administration. It should be noted that the allocation of governmental subventions to majoritarian constituencies is one of the forms of covert corruption before the elections.
- Influence on the State Fiscal Service. After the removal of Roman Nasirov, President’s Administration planned to take this important structure under its control. Nevertheless, appointment of a new head of the SFS in 2016 did not find any votes in Parliament. Groysman used this chance to lobby the appointment of his longtime friend Myroslav Prodan as acting head of the SFS. At the moment, the SFS is fully controlled by Groysman, thus he received a serious tool for raising funds for the upcoming campaign.
- Personnel issues. The most notable personnel conflict between Groysman and the President’s environment is the issue of resignation of the acting Minister of Healthcare Ulyana Suprun. Groysman expressly supports Suprun, and despite the pressure of the President’s Administration, he refuses signing an order on her dismissal. In addition, the Prime Minister creates a lot of bureaucratic obstacles for the President’s Administration in the process of appointing heads of state enterprises, corporations, central and local executive authorities. Groysman approves candidates for positions and signs orders for appointment very slowly, recommends the of repeated appointment procedures, etc.
It is known, that the Parliament will vote on the government report at the end of June.
In this regard, the following scenarios of the situation development and the corresponding risks are possible:
Scenario #1 – Government resignation and early elections. In our opinion, this scenario is unlikely to happen and looks like political madness. Nevertheless, there is a possibility that an acute government and a parliamentary crisis may still take place. For example, on the Constitution day on June 28, Poroshenko may announce the dissolution of the parliament (at least, the closest environment of the President tries to bring him to such a decision). Such a decision has certain pros and cons for Poroshenko. The risks for Poroshenko are the following: launch of the presidential campaign in the context of the government crisis; the negative image of the authorities before the “Ukraine-EU” and “NATO-Ukraine” summits; formation of a group of open enemies from among Avakov, Yatsenyuk and Groysman; leap of inflation; and most importantly – possible strengthening Tymoshenko’s position in the parliament. Positive moments include: the removal of the People’s Front, Avakov and Groysman from authorities; reducing the tension in society; checking the real ratings and capabilities of the opponents; financial exhaustion of Tymoshenko, as it would be difficult for her to find sponsors for two campaigns. If the Parliament recognizes the work of the government unsatisfactory and dismisses it, there will be a need in formation of a new government and a new coalition. Such scenario may result into the dissolution of the Parliament and the announcement of early elections in October 2018, or holding synchronous parliamentary and presidential elections in 2019, as an option.
Scenario #2 – Preserving government and increasing pressure on Groysman. There is a high probability that the government will remain. Information widespread in political circles suggests that law enforcement agencies may open criminal proceedings against Groysman in suspicion of unlawful enrichment, namely multiple assets gained when he was the mayor of Vinnytsia. A criminal case in the General Prosecutor’s Office of Ukraine or the NABU will help the president’s environment to easily hold Groysman on the hook and under control. President’s Administration will try to negotiate with Groysman, and as minimum – secure his neutrality, and as a maximum – leave space for the President’s PR around governmental decisions. It is possible that systematic discrediting attacks in the media will be conducted against Groysman. The Prime Minister will simultaneously develop his party networks and prepare for parliamentary elections. In this case, Groysman will go for parliamentary elections independently with his own political project or will be forced to unite with Yatsenyuk.