On May 24, 2012, the leader of the Prosperous Armenia party (PA, ”Bargavach Hayastan” in Armenian) Gagik Tsarukian declared that his party, the second largest in the parliament according to the results of the vote of May 6, would not enter the governmental coalition with the Republican Party (RP) of President Serzh Sargsyan. The president later entered a coalition agreement with a smaller party, Country of Law (“Orinats Yerkir”). Thus, PA interrupted the cooperation which started in 2007, to the great surprise for Armenian politicians.

As a result, PA is becoming an independent player after years of largely following the lead of the RP. As a result of the recent parliamentary elections, six years after the creation of PA, Armenia has two large parties capable of forming a government, the RP and PA. This also implies that the implementation of the agreement signed on February 17, 2011, is endangered. According to that agreement the three parties then forming the ruling coalition, including the PA, would support President Sargsyan in the presidential elections of 2013.

In light of the May 24 statement, it is not excluded that the PA may have its own candidate during the presidential race of 2013. Among likely candidates, the names of Tsarukian himself and Robert Kocharian, Armenia’s second President, are mentioned. Thus, although the RP has a majority in Parliament, the new government will face opposition composed not only of previously known smaller parties or the new Armenian National Congress (ANC) opposition faction, but also of the more populous PA faction.

The PA was created in 2006 when its founding Congress took place and Tsarukian, one of Armenia’s richest men, was declared its chairman. The party was composed of intellectuals and statesmen who for different reasons did not join the ruling RP. PA has gained much of its popularity through charity actions by its leader. Recently, Vardan Oskanian, who served as Kocharian’s Foreign Minister in 1998 -2008, joined the PA and entered the National Assembly as one of its leaders. This provided additional fuel to rumors about Kocharian’s return to power.

In 2007, PA gained 26 seats in the 131-seat National Assembly. Although RP gained a majority and was able to form a government alone, it invited PA and one smaller party, Dashnaktsutiun, into the coalition. In 2008, the CL entered the coalition as a fourth party. During the elections of May 6, 2012, both of the large parties improved their positions, with the RP winning 69 and Prosperous Armenia 37 seats. According to Tsarukian’s statement on May 24, PA will seek to implement its own program which would be impossible within the coalition. The RP had no difficulty in re-appointing Tigran Sargsyan as Prime Minister, as PA had four members in Sargsyan’s outgoing government.

On June 16, RP made appointments to replace the PA ministers along with two PA- appointed governors, the second replacement pending. Moreover, the program of PM Sargsyan’s new government was adopted on June 21 by the National Assembly (voting results were 75-47-1), and the PA faction voted against it. Hence, PA seems to become an opposition party in 2012. One possibility is that PA will become a moderate opposition party, as opposed to the more radical ANC or Dashnaktsutiun. An example of such an approach was seen at the first session of the newly elected National Assembly on May 31 when several PA members voted for Hovik Abrahamian, the Parliament  Chairman proposed by RP. However, the possibility of Kocharian’s return to politics – he is currently the Board member of a large Russian company – remains.

There is a belief in Armenia that PA was created by Kocharian who was Armenia’s President in 2006, and that Kocharian has a strong influence over Tsarukian. According to some analysts in Armenia, PA competes with Sargsyan’s RP for its contacts with Russia as PA is unhappy with Armenia’s ties with the West. Such beliefs seem unfounded given Sargsyan’s close relations with both Dmitry Medvedev and Vladimir Putin.