Bloomberg News Cites Findings or IRI's Election Observers in Ukraine

October 29, 2012

Yanukovych Tops Ukraine Vote as Monitors Label Ballot Unfair
Bloomberg News

By Daryna Krasnolutska and Kateryna Choursina

Ukrainian President Viktor Yanukovych’s ruling party got more votes than its rivals in parliamentary elections that monitors called unfair in a blow to the former Soviet republic’s aspirations to bolster its European ties.

The Party of Regions had 34 percent of party-list votes and was leading in more than half of the 450-seat legislature’s 225 single-mandate constituencies, preliminary results showed. State media favored the governing party in election coverage, while campaign financing was opaque, administrative resources were abused and opposition candidates imprisoned, the Organization for Security and Cooperation in Europe said.

Yanukovych’s government, which trumpets stability, economic growth and the Euro 2012 soccer tournament among its successes, had wanted the election deemed democratic to thaw a planned Association Agreement with the European Union. Ties with the 27- member bloc have soured since ex-Prime Minister Yulia Tymoshenko was jailed for seven years in 2011.

“Ukraine’s parliamentary elections were characterized by a tilted playing field,” OSCE mission chief Walburga Habsburg Douglas told reporters today in the capital, Kiev. “Considering the abuse of power and the excessive role of money in these elections, democratic progress appears to have reversed.”

Bonds, Stocks

Ukraine’s dollar Eurobond due 2017 climbed for a fourth day, cutting the yield 21 basis points, or 0.21 percentage point, to 7.08 percent, the lowest level since the notes were sold in July. That’s the biggest decline since Oct. 16.

The benchmark UX equity index added 7.7 percent to 887.78, rising for a second day as all 10 stocks in the gauge climbed. The hryvnia fell 0.6 percent to 8.1805 per dollar.

The Party of Regions garnered 34.2 percent, compared with 22.49 percent for opposition groups united under Tymoshenko, with 61 percent of ballots counted in party-list voting as of 4 p.m. in Kiev, the Central Electoral Commission said on its website.

Heavyweight titleholder Vitali Klitschko’s UDAR won 12.99 percent of ballots, the Communists, Yanukovych’s current coalition partner, received 14.73 percent and the nationalist party Svoboda had 8.7 percent. Ukraine Forward, for which soccer star Andriy Shevchenko campaigned, didn’t meet the 5 percent parliamentary entry threshold, the figures showed.

Free, Democratic

Turnout at the election was 58 percent at 8 p.m. yesterday, according to the Central Electoral Commission. Final election results will be published tomorrow.

“Free and democratic elections have been conducted,” Prime Minister Mykola Azarov, who leads the Party of Regions’ party list, said yesterday in a statement on the party’s website. “We’ve won in an absolutely honest fight.”

Ukraine’s foreign-currency bonds have returned 24 percent this year, the most after Venezuelan debt, according to JPMorgan Chase & Co.’s EMBI Global Index, which gauges the yield difference relative to U.S. Treasuries.

Still, after expanding 5.2 percent last year and 4.7 percent in 2010, the economy will contract in the second half because of lower prices for steel, Ukraine’s main export earner, Erste Bank AG and HSBC Holdings Plc have predicted.

Single-Mandate Races

The Party of Regions prevailed in 117 single-seat constituencies after 61 percent of votes were counted, with the Tymoshenko-led opposition winning 39 races, according to the Central Electoral Commission’s website.

The united opposition and Svoboda agreed Oct. 19 to form a coalition and Klitschko said yesterday his party may join them in parliament.

“We’ll sit and discuss joint actions,” Klitschko said. “We see possible cooperation with those forces that support a democratic, European future for Ukraine. I reiterate: we won’t cooperate with the Party of Regions or the Communists.”

After Tymoshenko’s conviction for abuse of office while premier, the EU had urged Yanukovych, 62, and his government to conduct fair elections, calling them “a litmus test” of Ukraine’s democratic credentials.

The government had sought to ensure the ballot met international standards in a bid to “reset” relations with the EU, First Deputy Prime Minister Valeriy Khoroshkovskiy said in an Oct. 18 interview.

The International Republican Institute, which sent a delegation to Ukraine to observe more than 160 polling stations yesterday, said that while the elections were held “in an orderly manner,” they featured an “uneven” playing field.

“Ukraine continues to fall short in ensuring voters a campaign in which candidates have an equal opportunity to be heard and they can be confident that their individual votes count,” it said today in an e-mailed statement. “After more than 20 years of independence, Ukraine still faces significant obstacles to its democratic development.”