Ukrainian President Viktor Yushchenko held make-or-break talks on a coalition government with his political rival yesterday after threatening to dissolve parliament in a bid to force concessions from him.

 

Analysts said Yushchenko wanted pro-Moscow Viktor Yanukovich to commit himself to Western-leaning policies such as seeking membership of NATO and the EU in exchange for the president agreeing to Yanukovich becoming prime minister.

 

Before going into talks with Yanukovich, whom he humiliated in a 2004 election, Yushchenko said he would begin procedures for dissolving parliament because it faced a crisis.

 

"It could be solved in two ways; it's either a search for compromise … or dissolution of parliament," Yushchenko's spokeswoman Iryna Gerashchenko told reporters.

 

She said the president still hoped his talks with Yanukovich, and roundtable negotiations underway between all political groups, could defuse the situation.

 

"We still think a deal between Our Ukraine and Regions is likely," said Tim Ash, emerging markets economist at Bear Stearns investment bank in a research report. "Yushchenko is probably bluffing over early elections."

 

Yanukovich's Regions party won most votes in parliamentary polls in March in which Yushchenko's Our Ukraine party trailed a poor third.

 

Yushchenko has until the end of today to make up his mind about Yanukovich's nomination as prime minister. It is not clear in the constitution if he has the right to reject him and what consequences there could be if he did so.

 

Dissolving parliament would mean new elections, a prospect financial markets are unlikely to welcome after four months of political uncertainty.

 

Some analysts say that if Yanukovich became prime minister on his own terms, Yushchenko would be a lame duck president and would therefore have little to lose by calling new elections.

 

If Yushchenko disbanded parliament, it could spark a standoff with the opposition majority in the chamber. They have said a dissolution would be illegal and they would ignore it.

 

Yanukovich's party says it is not prepared to make concessions to Yushchenko on NATO or another divisive issue the status of the Ukrainian language.

 

Yushchenko defeated Yanukovich in 2004 by winning the re-run of a presidential election that had been allegedly rigged in his rival's favor. But his "Orange Revolution" has spluttered.

 

There are signs Yushchenko may be trying to conclude an electoral pact with his estranged ally Yulia Tymoshenko, which would change the electoral calculations.

 

An old "Orange Revolution" ally, Tymoshenko served as Yushchenko's prime minister before being sacked. Her party has strong support among voters.

 

(China Daily August 2, 2006)