The pact, which called for a clear pro-Western policy, including joining NATO and the World Trade Organization, opened the door for Yanukovych to become the prime minister in early August.

However, shortly after his appointment, Yanukovych quickly changed his mind and backtracked on some policy initiatives, such as quick accession to NATO, which has angering Our Ukraine and undermined the coalition talks.

The standoff may lead to a situation when Yushchenko may veto some of the government??™s policy initiatives and legislation, and this may slow down the country??™s economic growth.

Yushchenko already warned he will not sign the 2007 budget draft, which increases budget deficit and lacks economic reforms, while on the other hand apparently benefits businesses sponsoring the Yanukovych-led party.

???Relations between Yushchenko and Yanukovych appear to be going from bad to worse,??? Timothy Ash, an analyst at Bear Stearns International in London, said. ???This does not bode well for an effective legislative/executive process with key issues such as WTO accession looming.??? (tl/ez)