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Ukraine’s 'Orange Princess' in Election Jeopardy

October 05, 2007 10:28 AM
by findingDulcinea Staff
Ukrainian President Yushchenko’s surprise decision to endorse a "broad" coalition, one presumably more sympathetic to the Kremlin, dismays premier-to-be Yulia Tymoshenko; did Russian threats to cut gas supplies change the president's mind?

30-Second Summary

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On Oct. 1, exit polls indicated that a coalition of pro-West politicians, from the so-called “Orange” parties, looked set to take power in Ukraine.

That bloc would have returned Yulia Tymoshenko to the position of prime minister.

She was a champion of privatization during her previous tenure as premier and is a harsh critic of the current Russian administration.

The next day, Russian energy giant Gazprom announced that Ukraine owed $1.3 billion in gas debt. The Ukrainian authorities were told to pay in October or Gazprom would cut the supply.

Ukrainian deputy prime minister and finance minister Mykola Azarov unequivocally rejected the existence of such a debt, according to Russian news agency RIA Novosti.

The dispute revisited a past disagreement over gas prices that saw the supply to Ukraine cut in Jan. 2006.

The Russian state owns 51 percent of Gazprom, which supplies 77 percent of the gas consumed in the Ukraine. The chairman of the board of directors at Gazprom is Russia’s deputy prime minister.

Some commentators have accused Russia of using fuel as a weapon to intimidate its former satellites, which became independent after the fall of the USSR in 1991.

Gazprom argues that it is only asking Ukraine to pay the market rate now that Russian gas subsidies have ended. 

On Oct. 4, Gazprom decided to moderate its position on the alleged debt.

According to independent Russian daily Kommersant, that announcement was followed 20 minutes later by President Yushchenko’s surprise proposal to form a “broad-ruling coalition”—a signal that more pro-Kremlin politicians should enter the new government.

Kommersant reported that Tymoshenko “was in a state of shock.” Only the evening before she had declared publicly that she would refuse the post of prime minister rather than ally herself with her pro-Kremlin political opponents.

Headline Links: The election results and the gas dispute

Background: '04 Orange Revolution; '06 Gazprom dispute

The Orange Revolution: election, corruption and poisoning

In November 2004, the Ukraine held its third presidential election since independence. The battle between pro-West and pro-Russian politicians soon boiled down to a contest between their respective presidential candidates: Viktor Yushchenko and Viktor Yanukovych.

In September, Yuschenko fell ill, and accused his opponents of poisoning him. He recovered in time for the election in November, but the formerly telegenic politician returned to campaigning with a face disfigured by toxins.

Yanukovych won the November election, but the results were annulled amid accusations of vote-rigging.

A rerun was held in December in which Yushchenko and his “Orange” party took power. Yulia Tymoshenko became prime minister.
Disputes over Russian energy: Ukraine and elsewhere

Russia is a principal source of oil and gas for its former Soviet satellites, countries which it has provided with subsidized energy since the break-up of the USSR. As those nations have developed stronger ties with the West, Russia has raised energy prices. Critics see this as an overtly political move to regain control over its old sphere of influence. The Kremlin protests that it is merely good business to charge a competitive rate in line with European prices.
Ukraine and Russia

On January 1, 2006 Russia cut off gas supplies to Ukraine, closing a pipeline that indirectly feeds gas to other countries in eastern Europe. Some commentators concluded that Russia was punishing Ukraine for the Orange Revolution of 2004, in which the Ukrainian people rejected the Kremlin-backed presidential candidate Viktor Yanukovich. However, Gazprom, the Russian energy giant behind the move, said that it was merely charging a fair market rate after years of subsidies.
Georgia and Russia

An independent former Soviet state, Georgia was deprived of Russian gas in January 2006, as was Ukraine. An unusually cold winter was made additionally harsh when near-simultaneous explosions destroyed two important Georgian gas pipelines. Georgian President Saakashvili accused Russia of sabotage, claiming that his country was being attacked in retaliation for his its refusal to sell pipelines to Russia. Russia’s foreign ministry dismissed such remarks as “hysteria.”
Chechnya

Russia suggested Chechen rebels might be responsible for the destruction of the pipelines supplying Georgia. On January 27, 2006, an explosion ruptured a Russian pipeline taking much needed gas into Chechnya during an extremely cold winter.
Belarus

On January 8 2007, Russia suspended oil supplies to Belarus and, in doing so, cut off Poland, Germany and Ukraine, as well.

Key Players: Yulia Tymoschenko

Update: Tymoshenko offers concessions

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