Yesterday the Ukrainian Parliament dismissed Yulia Tymoshenko’s Cabinet with 243 votes (226 votes represent majority) following a vote of no confidence. Parliamentary fractions need to form a new coalition within 30 days. If they fail to do so, the president has the right to call fresh parliamentary elections. We believe yesterday’s voting indicates that the interested fractions have already decided on a new coalition, which we believe will likely be made up of the Party of Regions, Lytvyn’s block and the NUNS block. Also, we think Viktor Yushchenko and ex-speaker Arseniy Yatsenjiuk are the main candidates being considered for the position of prime minister. Yulia Tymoshenko has stated that she will pose a strong opposition to the president.

We argued in our report from January 13, “Ukrainian Politics: The Presidential Elections” that the consolidated power of president and cabinet is a much preferable scenario, as much-needed economic reforms will be easier to carry out than when the president and prime minister belong to different political camps. We view the news NEUTRAL, as it was an expected outcome after Viktor Yanukovych became president.